Is paper trading or demo trading accurate?

Posted By Robert On Thursday, January 16th, 2014 With 0 Comments

You can usually open a demo account and trade instantly with most providers. Using this service, you can simulate placing real trades in real time without risking your own funds. This is a great way to practise using the platform features and to get familiar with the product.

But is paper trading or demo trading accurate?

Paper trading does not involve emotion. This single factor is by far the most important element of trading. When real money is on the line, people’s decision making process, is clouded by fear and greed. These are the two of your worst enemies in commodity trading. Paper trading is great for learning terminology, gaining understand of the markets and great for building confidence in a specific trading methodology. However, how someone does on paper, has nothing to do with how they will trade with real money. If anyone tells you otherwise, they are lying

Is it recommended to use a CFD trading platform if you just started trading?

I would suggest you to open a shares or CFD dealing account starting to trade for small amounts of money.  The best way to get trading experience is by winning or losing $20 or $50 for each trade you make.   That is not possible trading futures. You can learn a lot about the emotions of winning and losing and the incredible mental fortitude necessary to keep trading well under pressure.

But stay away from unregulated and/or unreputable providers who might play games with spreads and stop running.  The overwhelming majority of traders blow up completely their first account or two (I did it more than one), so put in an amount of money, call it “tuition fees” and expect to never see it again.

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