It’s a great feeling not having to worry about losing your funds while trading digital assets. Most platforms do not offer demo trading for cryptocurrencies, forcing traders to test new trading systems with real money and increasing the risk of losing capital.
Only a few platforms, such as Bitop, have implemented the functionality of a trading simulation, which will allow you to test a trading system or idea without risking real money and improve trading practices using real-time data of connected crypto exchanges. This means that a trader can exchange cryptocurrencies without having a trading account with a particular broker or a crypto exchange.
The real purpose of a trading simulator is to not only serve you as a learning point on how trades can be carried out but also to understand how the crypto market behaves, price fluctuations, test selected company tools and strategies or techniques that you can use when trading money.
Best Strategies for Demo Accounts
Eventually, you will find a winning strategy from your simulations that you will be able to translate to your live account and make real money. One of the main things you should take into account when using the demo feature is to make the experience as real as possible no matter if you are using artificial money. The key point is to improve your practice and not develop bad habits.
Moreover, you should always practice with the same monetary value of what your real account will have. If you have $5,000 saved for day trading, your demo account should also start out with the same amount.
Last but not least, your demo software/platform should be the same software/platform you intend to use in live trading. Part of demo trading is becoming comfortable with your trading platform and broker. Never start live trading with an untested/unknown platform.
Demo vs Live Trading
When practicing with a demo account you should take into consideration a few differences that you will encounter when going out to the real world. Some of them include differences in execution and psychological components.
- Differences in execution: Data available in both accounts, demo and live, types may vary slightly. Why? In a demo environment, the market is normally able to fill any size of your position. Nonetheless, when you act in a live trading environment, a slippage in order execution may occur. The size of the position is related to what is accessible in the market. A demo account reflects the market conditions in a live environment.
- Psychological components: whether you are using a demo or live account, you will experience plenty of emotions when trading. It comes in handy to practice having control over one’s feelings to avoid burnout when trading in real time. While using the demo account you are aware that you are not risking real money which can translate into allowing yourself for more, taking bigger risks and developing bad trading habits which can lead you to a disaster.
Best Demo Account, Bitop Exchange.
A demo account is recommended especially for the people who just started their journey in the crypto world, however, it can also be beneficial for experienced traders to test new systems and strategies.
Bitop features a first-class copy trading system that allows new users to copy trades and strategies from experienced traders, allowing them to acquire experience, getting familiar with trading operations and reducing errors when trading with real money.
The possibility to practice in a risk-free environment is a wonderful thing, use it wisely and treat it the same way you would with a real account. Experiment with different approaches and learn the trading craft in a safe place like a demo account. It can help you improve trading performance.
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