#***Truths and lies of a trading demo account.***

At the beginning of our journey as traders, the questions that we began to ask, although there are many, the most important during the initial stage and before the huge gaps of ignorance product of the number of unanswered questions; We chose to solve the most basic doubts at that time, is there a platform that allows me to learn without investing my capital at the moment? Immediately, after a couple of searches by Google, the entire arsenal of marketing begins to work to show us in the following hours, information on services, tutorials, demonstration accounts and other tempting proposals that seem to come out of a world in which absolutely everyone wins with just one click As a result, we began to convince ourselves that trading is tailored to our shoes; apparently it could become the opportunity that we have been looking for so long and that finally presents itself as a superhero with the necessary powers to give the necessary turn to our lives once and for all.

The reality of a demo account

"If something works, there's no need to change it"; Apparently, it is a phrase that continues to sound with great force in brokers, trading houses and some White Label that offers outsourced services. These companies have been offering demonstration platforms for almost two decades that allow them to obtain basic knowledge about their investment platforms and to enter a world unknown to many. But in recent years, the investment world is beginning to turn its eyes towards a new kind of financial product that fuses technology and finance; the cryptocurrencies have been during the past year 2017, one of the products with greater revaluation, and the big trading houses have started to implement these products on their platforms. Currently, the main brokers already have a varied list of cryptocurrencies on their real and demonstration platforms.

A user who wants to take their first steps in the world of cryptocurrency trading, has the option of obtaining a demo account with a simple user registration; This opens the door to a list of products that you can manipulate without having used real capital or any type of income in FIAT or cryptocurrency.

Up to this point, everything seems to be a strategy that brings the necessary knowledge to new users, eager to learn and get soaked in this ecosystem until now little known to the user. However, behind a demo account, there is a whole machinery anxious to convince you in the shortest possible time, that your vocation is "to be a trader", and that all you need is to change your demo account for an account with real funds, the larger the funds, the benefits will be even better, resonate the voices of the broker who wants to offer you a new change of life.

The great lie

Reading the fine print, should be required reading before accepting a registration in any of the houses that offers a demo account. Unfortunately, the broker does nothing but offer you what you have previously accepted, with its advantages and disadvantages in sight. What it offers you is a graphic with the same characteristics as a real one; with the one that you are supposed to use in a real account. So far there is no problem to distrust the dark intentions of a demo account.

We can not leave aside, something as important as the psychological weight of sitting in front of a demo trading platform, without the fear and worry of losing some kind of capital; definitely greatly influences the performance of each operation performed. But what they never tell you, or they have written to you in small letters with the intent of avoiding their reading, is that the demo trading platforms, to begin with, do not come from the same server that provides the data to the real accounts; This may seem unimportant as long as the price is always the same in both types of account, and in fact, they are the same 95% of the time the system is working.

The differential gap existing in the remaining 5% is what makes the differences between a real and a demonstration account so pronounced. It does not take anything other than those small differences at key moments in the market, to mark that great advantage between a trade made in a demo account and another executed in a real account.

Variable spread

You have noticed that the differential in the most volatile moments of the market can go almost unnoticed in a demo account; While in a real account, this differential between the purchase / sale price may mean reaching your stop loss much earlier than expected or buy at prices much higher than at any other time in the market. Spread is a fundamental tool, especially for those used to perform Scalping operations; This can mean the difference between a winning profit or loss account or not having a real account.

Non-existent slippage

We can get a coarser definition of Slippage in our word dictionary; but in a real account, in occasions where the market is exposed to high volatility, the Slippage can be cause of considerable losses, even being the person in charge of NOT respecting the stop loss previously marked by the trader; unfortunately, it is common practice in many markets, where executions with Slippage are not considered as error or market problems. Let's imagine that you have a purchase in 9000 $ and a stop loss marked in 8900 $; If the market starts to have a high volatility and volume, it is possible that the movements begin by not respecting the point of exit (stop loss) marked in your operation; in this way, the market when touching your stop loss will not liquidate your position; being exposed to a point that causes you to generate greater losses in that operation; let's say that the market closes your operation at $ 8850 instead of the $ 8900 initially marked.

Capital not according to what your real account would be

It is almost impossible to obtain a demo account with the real capital that we intend to invest in a real account in the near future. Unfortunately, we have to practice with accounts that the broker considers optimal for him, without thinking about the bad habits that we can acquire by not managing a demo account with the same patience and prudence that we would do in a real account with smaller amounts.

There is a whole structure that can assure the broker, that your experience in a demo account will be very beneficial in the face of an immediate opening of a real account. Although these may be the most relevant points that can differentiate a demonstration account from a real account, there are many others that have the same purpose as the points mentioned above. The objective of a broker will always be that you convert your demo account into a real account, in the shortest possible time; and does not intend to save or save any tool at your disposal to achieve that goal.

The benefits

To think that we are against the use and practice in demonstrative accounts, is very far from reality; we are aware that it is a good start to enter the world of trading without having to invest FIAT or cryptocurrency money, as long as you do not have all the necessary knowledge.

The platforms offer us the opportunity to know the typical model of executions in these markets, it shows us the variety of tools that we can have for the technical analysis; even some platforms have access to other data of interest to the trader.

Remember that while you are operating in a demonstration platform, the operations you perform may not have a total correlation with the operations performed in the same way as in a real account. That is why, you should use a demonstration account, only and exclusively to get inside and take your first steps in the knowledge of this whole ecosystem; but do not let yourself be wrapped up in the profits you get from it.

conclusion

What has worked for the broker for decades is still his best tool to change the mind of new entrants to these markets; impacting almost directly on the final decision of the person who aspires to be a trader. However, it is a subject that we should take very carefully so as not to let us decorate ourselves so easily by trading houses that see us as their best source of generating value for their companies. Do not forget that it is a very small percentage of traders, which are consistent over time; all the rest are just talk to the broker.