Even if you use demo trading account and you make money from it, do not deceive yourself because it is not still about trading with your own money. Trading is about trading with your own money. You can start with demo but use the amount of money that you can afford to lose when you start trading with money.
Yes it is essential but you need to go into a process. You need first to know your trading system, pattern, and narrative better than anybody else. Not only how the market book or trade but specifically how can you trade in different market conditions. In this phase, you are going to lose a lot because you are learning. Accept that. In order for you to not lose any money, it is beneficial for you to use demo trading instead.
After this phase and then you feel like you're ready, then put small amount of money that you can focus now about your trading psychology.
Exactly, therefore for those who are new they will need a demo account to learn how to trade properly and correctly. It is not easy to have that kind of experience. Trading has very high risks and as you have said, the assets we have on the exchange have the potential to be lost if we make the wrong decision.