In order to start trading on the cryptocurrency exchange, in addition to theoretical knowledge, practical experience will also be useful for a beginner. But how can you buy it and not lose your money at the same time? A demo account will come to the rescue here. It is provided by many cryptocurrency exchanges, so that newcomers can get to know trading better. In this article we will talk about what a demo account is, how to use it and what it is for.
What is a demo account and what advantages does it give?
A demo account is a simulation of real trading. Trading with its help takes place in real time and on the real market. The main difference from real trading is that you will be trading with virtual funds provided by the exchange. Deposit and withdrawal of funds is not possible. The demo account is split with the real one, so you won’t get confused in them. What are the advantages:
- There is no need to use your own funds. Anyone can try himself in stock trading, the only thing that will have to be done is to register on the stock exchange.
- Real trading conditions. With the exception of one nuance – conditional funds in the account. However, this is both a minus and a plus. The fact is that the emotional factor with such a trade will be minimized, since the trader will not worry about losing funds.
Thanks to the demo account, you will be able to learn all the stages of trading. The trader has the opportunity to follow the charts, you can buy and sell the asset you like. Demo mode will teach the trader to keep his emotional state calm and keep a cool mind in moments when everything is not going according to plan. You will also be able to try out technical analysis on real market movements.
It is worth remembering the basic rule when trading in demo mode – virtual money should be treated like real money. The main mistake of beginners, and those people who use a demo account, is that they do not take trading seriously. They start putting large sums up for auction and naturally drain the entire deposit. Indeed, why worry if there are no risks? This is a gross misconception.The demo account was created in order for users to study on it, make a profit from each transaction, even if the income is virtual. If you just “play around” in demo mode, and then proceed to trading with real funds, then there is a high probability that only losses will occur here. It is important to extract maximum profit from the demo mode before you start trading with real funds.
Demo modes exist not only on exchange platforms, as it may initially seem. They are also embedded in trading bots. If you didn’t know that you can trade using bots, however, just like on exchanges, many may be afraid to use real funds in trading. Here the bot simulation mode from RevenueBot can come to the rescue. In order to reduce the risks of trading and get more profit, it is worth choosing the right bot settings. To select the optimal settings, RevenueBot has created a bot simulation mode so that you can see how the bot would have traded over the past 60 days, for any of the trading pairs. You can try different settings and see how the bot would trade on real charts of price changes in the past, with a virtual deposit. In order to enable the simulation mode of the bot, you need to activate the “simulate bot behavior” checkbox when creating or editing it, otherwise creating with the simulation mode does not differ from creating a regular bot. For convenience, a bot with simulation mode enabled is marked in the output table of all bots with a separate background. Thus, you will be able to evaluate the quality of the trading bot and find the optimal settings that are right for you. But when the simulation is completed, you can start creating trading bots on the largest and top cryptocurrency exchanges such as: Binance, Bittrex, Bitfinex, Exmo and others. Creating a bot is free of charge, the service will not take commissions until the client begins to make a profit from trading the bot. With the help of deep settings of the bot, the service’s clients implement trading strategies that are problematic to experience in normal trading. We will immediately indicate: the bot does not have access to customer funds on the exchange, but trades using API keys, that is, the account will remain out of access. RevenueBot has over 28 thousand customers who earn money thanks to trading bots.
Why should I choose this service?
- Pay the commission only after making a profit.
- The bot settings open up a variety of ways to make a profit.
- Inside RevenueBot, a marketplace is implemented where customers can buy a ready-made bot so as not to bother creating their own, or sell their own if the configuration has shown efficiency. Also, the services of a mentor (an experienced customer of the service) are purchased on the marketplace, who is ready to answer the questions of newcomers. Over time, you can become a mentor yourself, getting additional profit for this.
- Regular updates of the service’s features that optimize the trading process.
- The presence of the RevenueBot referral program allows you to earn money on trading, even without resorting to trading. Attract new customers for the service and get up to 30% of the profit they receive every month (but not more than 15 USD).
This is a small list of the advantages of the service. You can continue to list the positive qualities of RevenueBot, but why do this if you can go to the official website of the service and see for yourself everything? It is highly recommended to make decisions faster, because the crypto market does not stand still, but grows at exorbitant steps. Who knows how much profit is missed by someone who does not dare to come and start trading with RevenueBot.
Leverage in demo mode
Demo mode, just like real trading, provides the trader with the opportunity to trade for short and long positions, namely using leverage. Leverage is leverage. Here you can draw an analogy with a bank loan. For example, you decide to buy an expensive phone on credit, it is pledged to the bank until the debt is repaid. A trader can use leverage to trade short and long positions. What is it for? Using leverage, you will be able to open a larger position and if the forecast turns out to be correct, you will earn more money. However, there is a downside to the coin. With a losing trade, you will also incur a greater loss than without leverage. Therefore, the demo mode provides an opportunity to familiarize yourself with this function of the market, so that when you start trading with real money, you have an idea what kind of leverage you need to put up for a particular transaction.
Trading Strategy
There are a large number of different trading strategies on the stock market. Each of them works with different efficiency for assets. Choosing the right, and most importantly, a working trading strategy when investing in cryptocurrency is an important part of trading. Thanks to the right strategy, you will be able to make a profit. Experienced traders recommend opening a deal for no more than 5-10% of the deposit. Long-term investments in digital assets are also a profitable option for investors. The main thing is to always study the asset in which you are going to deposit funds or trade.
Conclusion
Getting theoretical knowledge by studying the market and assets is certainly a useful activity. However, in order to start trading on the cryptocurrency market, it will not be superfluous to practice without risking your own funds. Therefore, the demo mode can be perfectly suitable for such purposes.