Do brokers try to bait us with their demo accounts?

<p id="isPasted">Some brokers will try to lure you into investing real money on their platform by rigging the demos account in your favor. You can assess this by comparing asset prices and spreads with real market data. If the differences between the demo account's spreads or prices and the real market data are too noticeable, it's a big red flag.</p><p><br></p>

<p id="isPasted">While the goal of a demo account is to help traders practice without financial risk, some aspects may unintentionally create an unrealistic perception of trading that "baits" users into thinking live trading is easier than it is.&nbsp;</p><p><strong>How Demo Accounts Can Be Misleading</strong></p><ul><li>Absence of Emotion: The most significant difference is the lack of emotional pressure, such as fear and greed, which are major factors in real trading success or failure. Traders often act more impulsively or take larger risks in a demo environment because the money isn't real.</li><li>Idealized Execution: Orders in demo accounts are often executed at the exact requested price without delays, slippage, or partial fills, even during volatile market conditions. In live trading, these execution issues are common and can affect profitability.</li><li>Different Spreads and Costs: Demo accounts often have consistently tight spreads and may not fully account for all real trading costs, such as commissions, swaps (overnight fees), deposit/withdrawal fees, and taxes. This can make profits appear larger than they would be in a live account.</li><li>Unrealistic Capital: Brokers may provide a large amount of virtual capital (e.g., $10,000 or more), encouraging traders to use excess leverage or take positions larger than they realistically could with their own, smaller, starting capital. </li></ul>