Demo Trading In Cryptocurrency, What it Entails #001

Source

Hello crypto friends,

It is a great opportunity to come before you all today again to discuss on an issue of great importance in the cryptospace.

I believe you are all doing perfectly fine and are enjoying your activities in the community.

Today friends, we shall be learning on demo trading and why it is important for newbies, please tag along as we examine this interesting post.

---

---

WHAT IS DEMO TRADING

---

---

Source

Demo trading which can also be called virtual trading/paper trading is a unique type of trading that gives users the opportunity to practice investing in the financial market without making use of real money.

It helps to make available a risk-free environment where users can test trading strategies, gain useful trading experience, gain understanding on the operation of the market before putting in live money into the market.

In demo trading, users are often given a virtual account balance which can be used to sell and buy financial assets as related to trading the financial market.

Trades carried out on a demo account is done in a way that it mimic the actual market condition including the market movement and price flunctuation without being executed on a real exchange.

The main aim of a demo trading is to help investors/novice traders build their skills and confidence in trading the market without the risk of loosing money.

It is an awesome tool for learning especially for newbies in the trading world.

By making use of a virtual money, newbies can get themselves familiar with the various tools being used to trade and the various strategy used for trading.

---

---

EFFECTS OF DEMO-TRADING

---

---

There are so many effects of demo trading and we shall examine some of them now.

• RISK-FREE ENVIRONMENT:

One effect of demo trading is that it provides a risk-free trading environment.

Recall that only virtual account is being used and as such, users don't have to fear the risk of loosing money.

• REAL MARKET CONDITIONS:

When trading a demo account, you will be given a mirror of the real market conditions, thus giving users the opportunity to get familiarize with the main operation of the market.

• TEST TRADING STRATEGY:

Another effect of demo trading is that it gives users the opportunity to test various trading strategies and see which one works perfectly for him.

Instead of test-running strategies with your live money, you can make use of a demo account.

---

---

CONCLUSION

---

---

It is very important that newbies make use of a demo account so as to combat any risk of loosing money.

Then when he is familiar with the operation of the market, he can proceed to making use of a live account.