Demo Trading In Cryptocurrency, What it Entails #003

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Hello crypto friends,

Guess who's here again today, it is me, @jueco and I feel happy to come before you all, this day to discuss on another issue of great importance in the cryptospace.

In one of our discussions, we learnt about demo trading and we also discussed about it's advantages and why traders should make use of demo trading before moving to a live account.

I then sat and wondered if there were dis-advantages of using a demo account because of course, there is a popular saying that goes " everything with an advantage has a dis-advantage", then I decide to carry-out my research about the dis-advantages of using a demo account, and here's what I found.

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DIS-ADVANTAGES OF USING A DEMO ACCOUNT

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Explained below are some dis-advantages of making use of a demo account.

• EMOTIONAL DISCONNECT

Trading the financial market, a trader needs to learn how to control his emotions so as not to make irrational decisions in the market.

However, the training of a user's psychology is greatly attached to the trading of a live account and by always trading a demo account, a trader will be emotionally disconnected from the market.

Being emotionally disconnected from the market makes your trading experience futile and you will make irrational decisions that will lead to great loss In the market.

• NO REAL MONEY AT STAKE:

Another dis-advantage of trading a demo account is that there is no real money at stake, and when there is no money at stake, a trader will lack commitment to the trading process.

Trading the financial market is a process and every stage of this process requires great seriousness.

However, when there is no live money at stake, a trader will loose the seriousness needed for his individual growth in the financial market.

• FALSE CONFIDENCE:

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Another dis-advantage of trading a demo account is that it gives traders false confidence of themselves in the market.

It deceives them into believing that they are masters of the chart, whereas in reality, a successful demo account doesn't not guarantee that you are a successful trader of the financial market.

Being a successful demo account trader thus makes traders ignore their trading rules and avoid observing the necessary risk management needed in trading the financial market.

Taking uncalculated risk when trading the financial market puts your account in great danger.

• UNREALISTIC EXPECTATIONS:

Another dis-advantage of trading a demo account is that it gives traders unrealistic expectations.

When a trader has successfully traded a demo account, he feels that is how trading a live account will be.

He feels he will make a very huge profit in a short period of time, and these expectations were gotten as a result of trading a demo account.

In reality, when he doesn't attain any of this expectations, he becomes very sad and eventually quit

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CONCLUSION

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It is very important that we also understand what negative effect trading a demo account can have on a trader.

When trading a demo account, we should guard against the above explained.