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Is a Forex Demo Account Exactly the same as a Live Forex Account?

When you first start trading the Forex markets, you will most likely receive a number of recommendations from Forex brokers and FX courses to start with a Demo Account. Essentially, Demo accounts are those in which you can use fake money instead of fronting up with real money - so that you can get a sense of what Forex trading is all about.

There are two major benefits to using Demo accounts. They are:

Ability to use the brokers software and Forex platform without committing any money
Ability to try out strategies and systems without risking real money

Both of these benefits have huge implications for Forex traders in the long run. However, many people often ask whether or not trading on a Demo account is a genuine representation of what Live account trading is like. After all, Demo accounts are sometimes delayed by 20 minutes with their data, and trade times are significantly reduced because of the fact that real money is not being processed.

Let's take a look at whether or not Demo trading provides a fair representation of Live trading.

Demo Accounts Are Almost Identical

Aside from the fact that currency quotes are often delayed with Demo accounts, the reality is that trading on a Demo platform is almost an identical experience to trading in real life.

The only major difference, obviously, is that you are not using real money.

Many people still believe however that because the money you are using on a Demo Forex account is fake, the processing times for trades are significantly improved from before. This is simply not the case. The reality is that the amount of time it takes for a Demo trade to be executed is almost on par - if not exactly the same as that of a Live account.

Do not forget, just as a live trade needs to be routed to an exchange through the Forex broker - demo trades also need to be routed through the system and executed in the same fashion (albeit on the Demo database). Therefore, this should actually give you a very good idea of how long it will take for a real Forex trade to be place, sent, and executed on the system.

Switching to Live Platforms

After a few weeks of demo trading, most traders in the FX markets feel comfortable enough to switch to live account trading. Usually, you will simply have to alter the username and password that you log in to the system with - and everything else will remain exactly the same (except your account will obviously reflect the actual real account balance, not the demo balance).

Is a Forex Demo Account Exactly the same as a Live Forex Account?

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