Skip to main content

Reasons Why Cents Account is Better than Demo

It is widely known that in order for us to trade safely, we should have large capital to sustain the volatility in the market, Forex brokers are offering $50,000 virtual money on demo account, this is due to the fact that they know small account will easily blown by newbie traders who doesn't have idea on forex trading. Whereas if a trader use a bigger capital that will allow to trade 1 lot ($100,000) with a value of $1 per pip movement ( smallest decimal place on currency value), it will take many consecutive mistakes before he will blown the account.


 Until when we should trade with demo account?
For many brokers we can use demo account unlimited. It is best use in testing strategy and until we are confident that our strategy was profitable.

 When we should start trading on cents account?
We should trade on cents account as soon as we are ready to try the real forex trading.
Cents account represents big amount, if we made profit on cents account, we can also do that in bigger accounts. 

 Advantages & Disadvantages of Cents Account
  1. It will help us eliminate our fear and build confidence on trading
  2. Small losses if we have mistake on our judgement 
  3. Can open a small amount that will show dollar denomination
  4. Small profit will grow big in due time
  5. Slow profit
Advantages & Disadvantages of Demo Account
  1. Good for testing strategy
  2. We can evaluate the market execution of a broker
  3. Unlimited trial
  4. No risk
  5. Profit in demo cannot be withdrawn.
All the common mistakes of a trader were realized and given a value when they encounter it on a real trading, Cents account will help us learn how to act and decide properly on currency trading.

Happy Trading!
Labels:

Comments

Post a Comment

Popular posts from this blog

How to Trade Forex with $1 (One US Dollar) Account

Forex Trading Strategy for $1 Today, Forex brokers are allowing the forex traders to deposit and open a real trading account for only One US Dollar. Sounds real crazy but it is really possible to trade forex with $1 (One US dollar) account, not only technically but it is also psychologically possible. The only requirement to trade $1 is Patience. Since the amount was very low, we cannot expect for high profit.  Forex Trading Strategy Plan for $1 US Dollar Account Open a real cents account - This will turn your $1 to $100 dollar equivalent value Trade 0.1 lot size one at a time - Do not open another position as long as the previous was not yet close. Opening 1 position at a time will allow for 1000pips movement.  Target realistic goal - Take profit can be set at 10pips a day, but if you enter a trade on an extremely over sold or over bought area, you can target for 50 to 100 pips a day. Plan the use of stoploss - If you ope...
3 comments
Read more

How to trade forex using Hedging Strategy

Forex Hedging Strategy Before I knew that it was hedging, I was already using it. I use it to protect my account from further loss, but aside from protecting your account from additional loss, you can maximize your profits by using hedging strategy. What is Hedging? It is opening a buy and sell position at the same time with same lot volume. Sounds fantastic and great trading idea because wherever the market goes, up or down, you have a trading position that will be on profit, and when the position goes on the opposite you will profit again to the other position. But to many who uses hedging position at the first time, This result them to too much floating loss position, and when get out of control, they face margin call. When to use Hedging Strategy? Most of the traders doesn't know when to use the hedging properly, though they have a good idea because the currency pair are moving in harmonic waves and the price keep on coming back to a certain price, they would rea...
2 comments
Read more

Top 3 Best Things To Do Everyday Before Trading Forex

Trading in forex is not gambling, Before we enter a trade we must have a reason why we enter buy or sell for our trade. Don't trade without a reason if you don't want to think of a reason why the market always goes against you. Here is the list for the most important things that we should check daily before deciding to trade forex. Daily Chart - Looking on a daily chart will give us a hint what was happening on the currency pair we choose. Check if the pair was near support and resistance so we can trade accordingly, Buy at support and sell on resistance. Check also on the daily chart if there is a big chance of breakout or reversal of current trend so we will not be trapped and we will avoid big sudden loss.  Economic News Release - Everyday for 24 hours a day, News only vary on its impact from low, medium to high. Being updated to the news release schedule, we can avoid or take the chance to ride the waves and volatility of market. It is very important to know what kin...
1 comment
Read more