On this forum, I often come across advice for beginners that in trading you need to start with a demo account and then, after practicing, move on to real trading. My opinion is that novice traders generally need to stay away from demo trading, because this can turn out for them, at least, a waste of time, and at most, a loss of funds due to false perception and skills acquired on a demo account.

Now I will try to explain my position on this issue in a little detail.

By a novice trader, I mean a person who knows the theory, but has no practice in trading. If you are an absolute noob at all, then a demo account will help you understand the basics of trading and how the exchange works. Teaches you to navigate in graphic or technical analysis. Here I do not argue, a demo account as a way of acquiring basic knowledge is quite suitable for itself, and there you can try to take your very first steps in trading.

And by my skepticism about exchange demo accounts, I mean the case when a person is already starting to get acquainted with a specific exchange, or a specific type of trade, or creating his own trading strategy. Here, in my opinion, a demo account is extremely contraindicated for you.

But why? I will highlight the main points:

- As an acquaintance with the exchange and its trading terminal. A demo account and a real exchange are 2 different exchanges. For example, whoever tried to use the BitMEX demo account will understand me. The demo account imitates the exchange order books extremely poorly, and on the demo account you will not see any manipulations from the exchange and market makers. It is precisely those deceptive moves that are created in order to get out of the way of placed stop-losses or liquidations. Typically, before major market moves, such deceptive moves are used to take as much money from traders as possible. All this can be fully experienced only in the real market. A demo account will definitely not teach you this and will not prepare you. And the very first such fraudulent movement in the real market will lead to a loss of funds.

- As a construction of your money management and risk management. I often read posts on this forum with the following content: .... on a demo account, you can trade without fear, you still won't lose anything, because you can start over and train every time. But what will you train there? The ability to start over? Undoubtedly, exchanges love such traders. But that won't work for you. It is precisely that on a demo account with a similar approach, you will not develop anything, nor any risk or money management you will master there.

As is often the case. A person makes deals on a demo account, loses, starts over, wins something, and then loses, then wins again, and so on. And such a thought is born in his head that well, this is not real money, so here you can try everything. But when I put real money on the exchange, everything will be different. I will be more attentive and conscious of my dealings, everything will be different. No matter how it is. This is nothing more than self-deception. In the real market, there will be exactly the same thoughtless entering and exiting trades. Nothing will change. Because you teach yourself this approach to trading. There are no risks, no money on the exchange, everything is conditional, so nothing stops you just clicking on the BUY\SELL buttons.

-A demo account is also not suitable for creating or improving your trading strategy. Why? Yes, because the demo account is conditional, like the market that is generated there. There are no major obstacles that prevent you from making money in the real sector: namely, live traders, market makers, liquidation levels, fundraising timers (if we are talking about margin trading), stock bots that like to manipulate the price, a real order book. If you use graphical or technical analysis in trading, then you will need all these things.

And if a demo account is a waste of time for novice traders, then what? The best way is to start learning spot or margin trading using micro-deposits (literally 5-50 bucks). Some in margin trading generally start with $1 their trading path. If you use this approach, then it will be much more productive time that you will spend on training, improving your trading skills and your trading strategy, as well as fully being able to test the nature and behavior of a particular exchange in combat conditions, without any conventions. Trading even for the real $10 will give you more for your psychology and risk-money management than trading for the conditional $100 000. Because your money is your money. It is always unpleasant to lose them, and it is not a pity to lose conditional money. Therefore, you will learn to think and make informed decisions faster than it will be with the demo mode.

After all, it is not for nothing that many traders are disappointed after they spent months training on a demo account, showed successful results there, and then entered the real market and immediately lost everything. This is also due to your psychology, which you formed when working with a demo account. Again, this is one of the most common misconceptions when playing with candy wrappers in demo mode you think that when you get real money in management, everything will be different, more deliberate and balanced. It won't be that way. You will be losing money.

After reading this, you might get the feeling that I am deliberately encouraging newbies to lose their money on the exchanges. This is not true. At the beginning of your trading career, you will always lose. This is the law. Whatever results you show in theory, but in practice you will lose money, learn, then lose money again, then learn from mistakes again, and after a certain period of time (this period is different for everyone), you may learn to make money.

And it is better to learn and lose $1-10 bucks in the real market than to learn to trade on a demo account, and then go to the real market and lose a much larger amount there. I would choose the first option.Learn to trade only on the real market, because a demo account teaches you false skills or does not instill them at all.

If you have something to add or you have a different view on demo modes, write, will discuss.