Before the trading strategy, binary options traders need to think about what kind of demo account they will get from their brokers.

Before building trading strategy, binary options traders need to think about what kind of demo account they will get from their brokers. Some of them may not seem so appealing that traders will not pick a binary options broker which hosts that demo types.

Free demo accounts in binary options trading are quite rare. Only a few brokers have this feature. It's not so surprising that some of you will immediately prefer brokers with no deposit demo accounts after hearing this.

There are two types of binary options demo accounts that you need to know in order to choose the right one for you:

  • Free demo account: you don't need to prepare any funds to start demo trading.
  • Demo account with deposit: the brokers require you to deposit some funds to access their demo service.

To help you understand those types better, let's take a look at the explanation for both free demo and demo accounts with deposit.

 

Free Demo Account

Although it is almost non-existent, binary options brokers with free demo accounts are still there if you seriously search for them. The easiest example can be taken from Binary.com. This broker is a new face of BetOnMarkets, and offers a 100% free demo account for its new clients.

If you are already familiar with forex trading, then there are no further details that you need to know about free demo account. This kind of demo account provide you with unlimited trading experience without having to deposit a certain amount of money.

This will enable you to try out your trading skills without having to worry about risking your money since the broker will give you some virtual money to trade in the demo account.

Obviously, profits made in this account can't be withdrawn. Traders who only see profit will not understand how a free demo account has helped traders to expand their ability, and even serve as back test facility when needed.

If you are new to binary options, you will definitely need to try out risk-free trading for at least once, despite the fact that binary options are far easier than spot forex trading.

This is what a free demo account looks like:

Free

The example is taken from Binary.com's demo account, where traders will have access to almost all of the broker's platform features, such as price chart, portfolio, profit table, statement record, and trading platform with real-time market pricing. All of those features will probably make you want to trade in brokers with demo accounts.

Since finding a pure binary options broker with this type of demo account is hard, you can consider using forex brokers' service that provides binary options trading system. Some forex brokers like InstaForex and AvaTrade offer binary options as one of their trading features.

 

Demo Account With Deposit

It is normal to see brokers offering free forex demo accounts. Therefore, a requirement for a deposit prior to trying out demo accounts will be considered as the broker's disability to provide full support for new traders.

However, binary options traders have viewed it as a normal thing, as there are more brokers with paid demo accounts policy than those freeing their clients from deposit requirements.

If you happen to choose a binary options broker with this kind of demo account type, you don't need to worry about your deposit money. A good broker will clearly state that the deposit only serves as a provision that enables you to register for demo account.

Thus, it will be kept as a balance that will only be used for your trading in real account (if you have opened one). The broker will provide you virtual money as your trading capital that's not taken from any of your deposit money.

24OptionsAn example of a trading platform from a paid demo account

It is common knowledge that you need to be extra careful when processing something that involves some real money. In this case, you need to be able to differentiate each broker's purpose in offering a paid demo account. The possibility is that the broker wants to make it easier when you open a real account, or it just wants to use demo account as marketing ploy.

Marketing is actually fine as long as it does not risk your deposit money. Here are some points that you need to check before applying for a paid demo account:

  • Terms and Conditions: Make sure that the broker is committed to save your deposit money that will only be used as trading funds when you already open a real account. You need to be sure that the broker will allow you to check your real money safety to make sure that it is neither used in a demo account nor reduced by some unreasonable conditions.

  • Broker Regulation: The best way to ensure trading safety is by checking the regulation. Here, knowing that your broker has been listed by financial regulators is not enough. You still need to look for the regulator's name, where it comes from, and be certain that the broker's license is genuine.

  • Broker Promotions: If you receive promotional offers during your time in the demo account, make sure not to be involved in any of them. Promotion terms can bind you to continually trade with the broker. It can trouble you when you decide to move to another broker in the future.

  • Minimum Deposit: It is important for you to deposit with the minimum amount number set by the broker.

  • Withdrawal Process: Withdrawal should be processed in accordance with the brokers' policy. For some payment methods, there may be some different procedures. Therefore, you need to check the payment details and be sure that it will be processed in the same manner as explained before. Furthermore, there should be additional notice that the broker will not hold your deposit or complicate any withdrawal request when you haven't opened a real account. This can happen when you try the paid demo account for a certain period of time and decide not to open a real account with the same broker. A broker initially provides demo account as a learning material that doesn't force a trader to join in its real account. Any suspicious act related to withdrawal process in this stage can be considered a scam and will only prove that the aforementioned broker wants nothing but your money.

 

Think on The Bright Side

In spite of having to accept the fact that not all binary options brokers offer free demo accounts, you don't need to reconsider your binary options brokers' standard just for this reason.

Sorting out binary options brokers' regulations and terms can be a little tiresome, but it's just a small matter compared with what you have to face when your broker is proven to be a major fail.

The different models of demo accounts should not limit you from considering the best broker based on its other features. If you can make something good out of each demo account, then demo account differences will not be your biggest concern anymore. This way, you will have what it needs to benefit from demo accounts, no matter what type they will be.

 

Do you know forex brokers have expanded their markets into the binary options industry? Nowadays, there are so many global brokers that offer access to the binary market. What are they? See the list in this article.