Archive for June, 2008



How is a forex demo account different from a real forex account

Monday 9 June 2008 @ 10:06 am

A demo forex account is very different from a real account in two ways. First, demo forex accounts are always brokered by a computer.  A real account will have a real human dealer executing your orders if any substantial money is involved and/or there is turbulence in the market and/or your account is flagged for some type of activity that your broker despises.  This means that at times execution of your order can take several minutes, while it always takes a second or so in a demo account.  Inconveniently, the faster the market is moving, the longer is the delay.   

Second, the computer that executes your order on the demo account, doesn’t check it with the market.  It simply takes the price feed, usually from Reuters, and “executes” your order on the basis of the last available price.  In a real market, when the price is moving fast, you will most likely get a message from the dealer stating that there is no price available, or an offer that is significantly different from your order.    




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