Cryptocurrency long-term investing as well as day trading is very risky and if you are not careful enough you can find yourself with empty hands, sobbing over the funds you have lost. To make sure that this does not happen to you, you can practise on a free cryptocurrency trading demo account. If you are unsure which trading demo account to use, the eToro Demokonto comes highly recommended. A demo account will help you to master crypto trading first without putting your real money at stake. Almost all CFD crypto brokers include in their offer a free crypto trading demo account and because no need for ID verification or deposit is required, literally anyone can try cryptocurrency trading. To understand how important a practice account is, we created today’s post, so here are the 5 reasons why to use a cryptocurrency trading demo account not only as a beginner.
Get the feeling how cryptocurrency market works
For a trader who never traded cryptocurrencies, this is probably one of the most important reasons why to first open a demo account. With your virtual money, you can get the grasp of cryptocurrency trading and understand how the market behaves and reacts e.g. to certain news. The good thing about practise account is that you can use it for as long as you need and if you run out of imaginary chips, you can just simply ask for a refill of your balance or you can open a new account.
Test the trading platform of your crypto broker
The environment in which you will be trading one day with your real funds can determine how successful you will be. Each cryptocurrency broker has its own trading platform and it differs in fees, trading tools, customer support, number of cryptocurrencies, so on so forth. You can review the most popular cryptocurrency brokers even before opening a demo account, so you would be already testing a company you favour. Remember to check whether the crypto broker of your choosing is regulated in your country and if it operates legally. You would be surprised how many scam companies are out there.
Understand your weaknesses and strengths
On a demo account, it is very easy to spot at what you are good and at what you are bad. Everyone makes mistakes, even in trading, but it is important to realise them and learn from them, that applies even to your life outside trading. To expose all your weak points, it is important to simulate the same trading style as you plan to apply when you trade with real funds. That means opening the same positions with the same investments, closing at the same time et cetera. By using this approach, you will be able to reveal mistakes you would do on a real account which would cost you real money.
Build your own strategy
I think this is exactly what would have said, Rocky Balboa, if he was into crypto
The crypto market is a very mean and volatile place and I don’t care how tough you are it will beat you to your knees and keep you there permanently if you let it.
Even though Rocky interest does not probably lie in cryptocurrencies but rather in kicking ass*s, we know that without a solid plan we have no chance to survive in the crypto market. For that very reason, that is why you need to develop a trading strategy. What is a better place to do so than on an account where you don’t risk anything? Exactly, there isn’t.
It’s completely free
The last, fifth, reason for opening a demo account is that it is completely free. A demo account can be opened by basically anyone in a matter of a few seconds.
Conclusion – why to use cryptocurrency trading demo account
Unfortunately, trading on a demo account cannot mimic the emotions of fear, hope and greed which you have when trading with your own hard made money. That said, practise account has so many benefits that it would be a terrible mistake to neglect the opportunity to trade cryptocurrencies risk-free. Once you develop the confidence to trade with real money, you can just simply switch the accounts and implement the strategies and techniques you have been successfully using when trading on a demo.
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