Binary options are the hottest new way to trade over the short term. They present an easy to understand type of trading and they present a different type of risk than many other types of trading. Although binary options are quite risky, you always know what you are standing to gain versus what you need to risk. With some brokers, you can even get a return on your losing trades.
The best way to become an expert at this type of trading and start to make money is to practice. If you’ve ever traded in the financial markets before, you know that there is often a steep learning curve for beginners, and binary options are no different. If you just jump into trading them, odds are you will end up losing money.
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What are Demo Accounts
Binary options are risky; this is why a binary options demo trading is so important. In short, a demo account is a free practice account. You can get one through many binary options brokers. Basically, you are given a certain sum of fake money and you can use it however you want to practice trading. You will have access to all of the same trades that you would have had in a real life setting. The only difference is that there is zero percent risk in a demo account and 100 percent risk in a real money account. When you start your binary options trading, you want to make sure that you have as much experience as possible.
How do Demo Accounts Work?
The best part of demo trading is that it is exactly like trading with real money. The platform is the same in the demo account as it is in a real money account, so you will be learning the software that you need to know. The trades happen in real time, so you will be learning how to effectively place your money on certain sides of a trade—just like in real life trading.
The only thing that you cannot duplicate with a demo account is the emotional side of things. With risking real money, we sometimes have feelings of guilt, sadness, or even regret, when we trade and lose our money. The best way to get over these things is to avoid real trading until you are an expert demo trader. The better your skills with fake money are, the better your skills and your confidence will be when it comes time to start making real money.
If you are an experienced Forex trader, a Forex binary options demo account will give you a new outlook on trading. Even though you are using similar assets, the style of trading is completely different. This goes for all types of trading; even if you are a pro day stock trader, you will still want to practice before you jump in headfirst with binary options trading.
How to Get a Binary Options Demo Account
Binary options brokers now make obtaining a practice account a lot easier.
Getting your very own demo account is not hard, although most of the reputable brokers out there require you to have a real life account too. For example, Banc de Binary (www.bbinary.com), requires that you have registered for a real life account and have made a minimum deposit within that account. This isn’t necessarily a bad thing—you don’t ever have to trade with that money if you don’t want to. IF you decide after a brief period of demo trading that binary options are not for you, you can simply withdraw your money back securely.
Brokers do this because it ensures that the people who try their brokerage services are serious about what they are doing. If you have deposited $500, say, with a broker, you are going to be much more serious about your practice trading then if you were just playing around on their site. Demo trading should be taken as seriously as possible in order for you to get the most out of it. Having a goal to work with will make you that much more serious and help you to learn the trading skills you need to be a success in a much more timely and effective manner.
A free binary options demo account can be just the thing you need to jumpstart your trading career, but again, the brokers do this to not only protect themselves, but to protect you as a trader, too. The more experienced you are going into a real life situation, the better your chances of success are. Opening and using a binary options demo account is going to be in your best interests, ultimately.
Where Can I Get a Demo Account?
When the industry first started picking up steam, demo accounts were hard to find. Now, they are much more popular as both brokers and their clients have learned how useful they are for protecting profits. Banc de Binary offers free practice accounts, as do TradeRush (www.traderush.com), and 24option (www.24option.com). All three of these brokers have a very good product, the main difference between these brokers is that they offer slightly different fringe assets and they have different minimum deposit requirements. If you are looking for some specific asset to trade, you will need to do a little research on your own before you select which broker to go with.
Once you have your binary options practice account, you might want to consider expanding. Perhaps you have several different assets in mind that you want to trade. You might want to open up an account with more than one broker in this case. If one broker is offering 80 percent returns on an asset you want to trade, while another is only offering 75 percent, obviously you want to trade with the broker that offers you the best return.
Therefore, being familiar with more than one broker’s trading platforms is a mandatory thing for you. You will want to definitely demo trade with each of your brokers before you start using real money just so you can learn the different nuances of trading on each site.
Demo trading is very important, and the more time you spend doing this, the more effective your real life trading is going to be over the long term. Don’t worry about losing time in the real world setting; the benefits that come with demo trading pay for themselves over time by increasing your profits. If you want to take binary options trading seriously, you need to demo trade until you are more than proficient with your specific assets.