A lot of people don’t want to invest a lot of money or any money when they are starting out. And seriously, I can’t blame you. The economy isn’t doing that well and it can be scary dumping your money into something that you’re really not sure is going to return you any money. Profiting in forex is great because it is dependent on leveraging currencies, which can be done in good economic times and bad ones. Demo accounts can be your best friend or your worst enemy.

Let me explain how…

Demo accounts are nothing more that simulations of the market. It’s your way to play, without actually having to invest real money. I know there is a lot of people here saying “well that’s genius. I can practice until I learn everything, than use real money.” The problem with demo accounts is that they’re based on past market performance or typical past behavior, which can often be too reliable in a way.

Like if we were talking about stocks and you “pretend” to buy it at a specific price and it goes up each day, that would be a real good simulation because you get to see the real time market, you’re just pretending though.

So when you test some strategy out in a demo account you have to make sure that you aren’t literally getting hustled. You’ll find that behavior in the demos are more normal and typical, which doesn’t exist in the real markets. In today’s market, moving from a demo to real market can be very dangerous. Currencies are moving in rapid speeds, sometimes breaking fundamentals. It’s hardly a “normal” situation and that means you can easily be burnt out of all your money.

I think the only true way you can know if you’re getting somewhere is by testing in the real market as well. I’m not talking about putting your money out there but at least “pretend” to buy. Just pretend to buy at a specific point and see what happens.