In this guide:
A trade simulator is a priceless tool when you want to learn how to trade with a new type of asset. This is true regardless of whether you want to learn how to trade cryptocurrencies, binary options, CFDs or something else entirely. A market simulator allows you to become a skilled trader before you ever invest any money of your own. They allow you to make all expensive mistakes that you are going to do when you first start trading without losing any real money. The mistakes will cost you a lot of simulated money but no real money.
Not using a trading simulator when you first start trading is one of the most common mistakes that new traders do. Not using a simulator is the main reason that many traders fail to make money trading with binary options and other financial instruments. They end up losing their money before they learn the trade well enough to make money. Using a trading simulator eliminates this problem.
What is a trade simulator
A trade simulator is a name used for any system designed to allow you to simulate trades. The original trade simulator was pen and paper. You would write down when you bought an asset and at what price. You would then note when you sold and how much money you won or lost. Some traders still prefer to use this system, but I do not recommend it. Using pen and paper requires a lot of work, and it is easy to make a mistake.
Today we have access to software that can do all of this automatically. The software is more reliable and easier to use than pen and paper. I can, therefore, see no reason why you would choose to use a pen and paper instead of software designed to simulate trades. Trading simulation software also offers a lot of other features such as real-time graphs of your profits and losses and a lot more.
There are trading simulators that you can buy, but I recommend that you instead use a demo account as your trading simulator.
A demo account is a type of trading simulator. They allow you to trade with virtual money and keep track of your gains and losses. There are many benefits to using a demo account as your trading simulator. The most important of these is that the trading simulator uses the brokers trading software. This means that you become accustomed to using the trading software while you are learning how to trade using the demo account. You will know exactly how things work once you start buying and selling for real money.
Another benefit of using a demo account as a trading simulator is that you will have access to the same assets in the simulator as you will have access to when you start trading using real money. If you use a third party trading simulator, then you might trade with assets that you will not have access to trade with once you register with a broker. You might not be able to use the trading strategies you have developed, and you might not be able to benefit from the time spent in doing simulated trades because you can replicate what you have learnt to the real world.
Where to get a demo account?
A lot of brokers will provide you with a demo account. This is true for many popular brokers. Some brokers do not provide you with a demo account. We do not recommend that you trade with a broker that does not provide you with a demo account. Not unless you are an experienced trader.
Allow yourself time to learn
A trading simulator allows you to learn how to become a successful trader before you risk any of your own money, You should make sure that you use this to your benefit. You should not strive to start trading for real money as quickly as possible. It is better to take your time and make sure that you do not start trading with real money before you are ready to do. Your goal should be to keep making simulated trades for as long as necessary. You should not even consider starting making real money trades until you are able to consistently make money when you trade. I think you should wait until you have made money 4 of the last 5 weeks before you consider trading for real money. You total result over the 5 weeks should also be positive.
Wait until you see that you are able to produce consistent and stable profits. You will never be able to make money on every trade. But the overall trend should be a positive one.
Keep using the simulator
You should keep using the simulator after you have started trading for real money. The simulator will remain a great tool to try out new strategies and see if you can tweak your current strategy to produce better results. You should never be satisfied, and you should always use your demo account to try to improve your results, to try to become a more skilled trader.