By Master James 
Have you already picked the best online broker that offers MetaTrader 4 platform? Now, it’s time to create a trading account! But first, which one should you choose, demo or live?
Sure, if you love the thrill of having to fight for your money, then go ahead and start making a live account. On the other hand, if you want to keep it safe and simple, it’s suggested that you try the demo account first.
As we move forward and learn the importance of having a trading account, you’ll also know the difference between having a demo and a live account.
Demo and live trading accounts
When you create a trading account (whether it’s demo or live) in your chosen broker, you’ll be able to access the same features they have.
For instance, if you’re using the MetaTrader 4 platform in trading forex, you can still see the tools used in the platform. The type of trading account doesn’t matter when it comes to this.
As for the differences between the two trading accounts, here’s the list you should check out!
1. Trade execution
Of course, whether you’re trading using a demo or live account, you still have money. However, the demo account uses virtual money, while the live account uses real money (which can be liquidated). Think of the demo account as a simulation of trading in real life.
But even if you don’t use real money, your trades on your demo account will still be executed, as well as in the live account.
Furthermore, even though both accounts execute trades, there are no minimum trades required for a demo account, unlike the live one. There are also some differences in terms of how trades are executed depending on the broker.
2. Slippage
Trading using a demo account enable traders to open and close a trade at the price they want. However, in a live account, there are times when you don’t get to enter or exit at the price indicated, which is called slippage.
Slippage usually happens when the account lags or the broker re-quotes the order price. When re-quoting happens, the broker will ask if you’ll still want to continue the trade even if it’s not the one you initially set.
For instance, if you’re using MetaTrader 4 platform, your order will go to them first, then the liquidity market, and will finally get executed.
It’s possible to experience slippage when trading live, but if it’s too often, maybe it’s time to change your broker.
3. Training
Both having a demo and a live account can give you enough training. When you use a demo account, your basic trading skills will improve, and you’ll get to know how trading works. In addition, some educational tools and benefits come with the demo account, so it’s a great training ground for beginners.
Meanwhile, when you use a live account, you’ll be able to hone your strategies and mindset when trading. Since you’re trading using real money, you’ll be twice as careful as when trading using a demo account.
So it depends on what kind of training you like. If you need a more advanced experience, it’s time to open a live account. But if you’re still not ready to gamble your money, you can stick with the demo one.
4. Psychological effects
As mentioned, there are different psychological effects when trading via demo and live account. Since you’re not using real money when trading with a demo account, you’re not that invested, and your mindset is that you’re still learning to trade.
On the other hand, if you’re going to trade using the live account, you may experience revenge trading and the fear of losing more money. When that happens, you can either spend too much and lose, or quit trading at all.
Of course, you can still be as serious when trading using a demo account, but the trauma can’t be as heavy as when you trade for real. So if you want to gradually prepare for the emotional impact of trading, you can start by using a demo account.
5. Prices and fees
As mentioned, opening demo accounts don’t require any fees. However, the real-time price of an underlying asset doesn’t always reflect. Instead, it may be delayed for a couple of minutes. However, some brokers still show real-time prices in the markets.
Meanwhile, in live trading accounts, the real-time prices are reflected, while there are hidden fees than may occur.
So if you find it easy to open a demo account, you shouldn’t expect the same as when opening a live account. It requires more personal information and documents because it involves investing real money.
After some time, you’ll still need to open a live account
As a beginner, it’s fine if you enjoy using your demo account. However, after some time, you should also start creating a live account, especially when you’re becoming more relaxed when using the demo account.
Besides, you’re using a demo account to learn and move on to actual trading. So once you think you’re ready to trade for real, it’s time to change your account.
We hope this article helps you distinguish the difference between a demo and a live trading account, and their importance. Don’t forget to share your experience with trading using these accounts by leaving a comment below!