80.2% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78.8% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Its strong points include:
No minimum first-time deposit No commissions Several payment methods for deposits and withdrawals Tight spreads from 0.5 pips
It offers one of the best execution speeds in the industry with low latency below 0.004s. It utilizes the most advanced technology to improve users’ trading efficiency – users can automate trades, build integrations and create trading apps using ActivTrades’ market-leading CFD and spread betting technology. Exceptional trading infrastructure is available on ActivTrader and MetaTrader 4 and 5. ActivTrades invests deeply in specially developed educational materials for its clients – including webinars, regular outlooks, manuals, etc. Type of offers: ActivTrades focuses on well-developed products in its trading portfolio. Customers can choose from over 1,000 CFD or spread betting instruments across forex, indices, shares, commodities, financials and ETFs. It also offers investing solutions for its institutional partners. Spread betting allows UK residents ONLY to trade the prices of financial instruments, including forex, indices, commodities and LSE shares. Spread betting and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread betting and CFDs work and whether you can afford to take the high risk of losing your money
Reading about the process will give a certain amount of knowledge, but some things need to be learned first-hand to be properly understood. This is why some platforms introduced the concept of demo trading platforms. Essentially, they are exactly as the name would suggest: a platform that demonstrates how trading is done. A demo platform offers the opportunity for you to familiarize yourself with the way a specific platform looks and operates without the need to invest large sums of money. They are designed as a training tool to learn how to trade on the stock markets while ensuring that no real capital is at risk. Demo accounts are also a good way for you to test out different trading strategies and find a style that suits you. You can test out different trading methods and levels of risk to find a method that suits your needs and personal preferences. Alternatively, you will be able to create a trading style that is unique to you.
Advantages of Using a Demo Account
No risk attached – Unlike when you trade on the real stock markets, there is no risk attached to using a demo account An opportunity to learn how a platform works – Each platform is slightly different, so it can be useful to use trading platforms to discover what the functions of each platform are before committing to using it. Test out trading theories – There are many different trading methods, and you will need to find the right one for you. Demo accounts can help you to decide which strategies you prefer. Decide on your individual risk preferences – Trading always holds an element of risk. You will need to learn how much risk you can manage and how to avoid taking unnecessary or dangerous risks.
How Does a Demo Account Work?
A demo account works by allowing individuals to practice using a trading platform without taking risks with their own money. It will have all of the features of a live trading platform without the risks. This enables you to learn how platforms work and develop strategies without the risk of losing money. The fact that a demo account isn’t live means that you won’t lose money, although it does also mean that you can’t gain money, either. The objective is to learn discipline and develop strategies that minimize risk when it comes to trading for real.
Why Set Up a Demo Account?
If you are considering investing in the stock market, then there are many reasons why you might consider setting up a demo account first.
Familiarizing Yourself With a Platform
Different platforms will work in slightly different ways. So, whether you are brand new to the world of online trading or simply moving from one platform to another, it can be a good idea to set up a demo account. This will enable you to get to grips with the intricacies and features of a platform without the risk of losing any money.
Learning Rules and Functions
Different platforms will work in different ways. Demo platforms are an ideal way to learn the rules and functions of each platform and the general rules associated with trading. This will help you to avoid making mistakes when it comes to trading with your own money.
Developing and Improving Your Trading Strategy
By practicing with a demo account, you will be able to develop a strategy that works for you. You will also be able to find ways to improve this. This means that you will be able to personalize your strategy to suit your needs.
Experimenting With Risk
Trading never comes without some level of risk that is involved in every transaction that you will make. Accepting this is important, as it will help you know the risks you are comfortable with and the ones that make you anxious or uncomfortable. Demo accounts can help you to discover where your personal limits are.
Developing Discipline
One of the most important things that you can have when it comes to running a trading account is self-discipline. You will need to know when to act and when to wait, and there will be times when it is tempting to act on impulse. This means that discipline is vital to make the most of your account.
Are There Disadvantages to Trading With a Demo Platform?
When done properly, trading can be hugely beneficial and using a demo platform will enable you to make better choices when it comes to using a real platform and real money. This doesn’t mean, however, that there are no disadvantages. It is important to consider the potential disadvantages and be aware of them to avoid the pitfalls that can occur.
Complacency
Because you aren’t really risking real money with a demo platform, it can make you become complacent, as you don’t see the money that you gain or lose as being real. This can mean that you are less careful with the strategies you choose and pay less attention to market changes.
Bad Habits
When you are trading with money that isn’t real, it’s easy to develop bad habits. You will need to be aware of this when using your demo account to ensure that you are aware of any bad habits before they become an issue.
Increased Risk-taking
You won’t be losing or gaining anything in real life. A demo account is entirely there for practice and developing skills. This can mean that you are more likely to take dangerous risks that you wouldn’t take if you were using real money. It can also mean that dangerous habits are more likely to be used when it comes to trading for real.
How to Use a Demo Account For Trading
Anyone can use a demo account, and most will include some sort of tutorial process to help you get started. Alongside these tutorials, there are several additional suggestions to consider. If you let yourself think of it as fake money, then you will be more inclined to take dangerous risks. After all, you wouldn’t be gaining or losing anything in real life. By making sure that you keep thinking of the money as real, it can help you to develop more accurate strategies and risk-taking limits. You will find that everyone you speak to offers a different option, meaning that there are books, YouTube videos, blogs and many other alternatives to consider. You can use all of the information gathered through these resources, alongside practice on the demo platform, to discover the strategies that work for you and adjust them to suit you. This will help you to see patterns as they appear and will enable you to look back and see which strategies worked best. It will also make it easier for you to develop your own strategy. To be sure that it is your strategy and not impulse that is guiding your processes, you should let your strategy guide every trading decision that you make. As with many things in life, slow and steady wins the race. It will enable you to keep a calm head when things become tense or when changes in the stock market might tempt you to take a risk. This will help you to spot patterns or trends and enable you to identify when to buy and when to sell. Things within the stock markets are constantly changing, which means that you will need to continue adjusting and adapting your methods. To do this properly, you will need to make sure that you are studying the markets and continuing to learn. Once you feel that you have practiced enough with the demo account, familiarized yourself with the available features and have established a strategy that helps you avoid unnecessary risks, you will be ready to trade for real.
Choose a Broker – Most brokers will allow you to set up a demo trading platform to familiarize yourself with the functions and develop strategies. The first step is to decide which broker you want to use. Input the relevant details – You will need to register for an account. This will involve inputting details such as name, address and banking information. It is likely that you will also have to submit identification that will need to be verified. Install a trading program such as MetaTrader4 – Once you have chosen your broker, you will need to install a platform that allows you to trade. In many cases, this will be MetaTrader 4 or MetaTrader 5. Receive login details – Once you have registered with a trading program, you will be able to login and open an account. From here, you will be able to select a ‘demo account’ and choose your preferred trading server. Start trading – Once you are set up, you will be ready to go.
Each one will have its own limits and amounts. This will enable you to decide whether it is the right platform for you. If you can’t get on with a platform, then consider an alternative. This also means that you aren’t able to withdraw any of the profits that you could potentially make. A live account uses real funds. You will be required to deposit money into your live trading account before any investments can be made. This means that you are able to withdraw any profits that you make but will also lose real money in the event of market and share price losses. Setting up a demo account can make this process a lot easier and will potentially mean that you are able to make more profitable decisions when you start trading on the live markets. By using a demo account, you will be able to find a platform that suits your needs, develop trading strategies and familiarize yourself with the risks involved without needing to initially invest your own money. All of this can help to build confidence, discipline and knowledge before trading for real.
