Why do demo accounts differ from real/live accounts?

<p id="isPasted">There are several key differences between demo and real/live accounts in forex trading:</p><p><strong>Market Conditions:</strong></p><ul><li><p>Demo accounts:&nbsp;Often use&nbsp;delayed quotes or simulated prices,&nbsp;which may not perfectly reflect the real-time volatility and fluctuations of the live market.</p></li><li><p>Real accounts:&nbsp;Operate with&nbsp;live market data,&nbsp;exposing you to the actual price movements and potential slippage (difference between expected and actual execution price) that can occur in fast-moving markets.</p></li></ul><p><strong>Execution:</strong></p><ul><li><p>Demo accounts:&nbsp;Orders are typically filled without&nbsp;requotes&nbsp;or&nbsp;slippage,&nbsp;as they exist in a simulated environment.</p></li><li><p>Real accounts: You May experience&nbsp;requotes&nbsp;(broker requests confirmation when market prices change significantly) and&nbsp;slippage,&nbsp;especially during volatile periods,&nbsp;affecting your entry and exit prices.</p></li></ul><p><strong>Fees and Costs:</strong></p><ul><li><p>Demo accounts:&nbsp;Usually&nbsp;don't incur fees or commissions,&nbsp;as they involve virtual funds.</p></li><li><p>Real accounts:&nbsp;Typically involve&nbsp;spreads&nbsp;(difference between buy and sell prices) and may have&nbsp;commissions, overnight fees, and other charges,&nbsp;impacting your trading costs and profitability.</p></li></ul><p><strong>Psychological Factors:</strong></p><ul><li><p>Demo accounts:&nbsp;Lack of the&nbsp;emotional element&nbsp;of trading with real money,&nbsp;potentially leading to riskier decisions without the fear of losing actual capital.</p></li><li><p>Real accounts:&nbsp;Introduce the&nbsp;pressure and emotions&nbsp;associated with risking real money,&nbsp;which can influence your trading behavior and decision-making.</p></li></ul><p><strong>Account Limitations:</strong></p><ul><li><p>Demo accounts: These may have&nbsp;limitations on leverage or order types,&nbsp;not fully replicating the features and functionality of real accounts.</p></li><li><p>Real accounts:&nbsp;Offer the full range of&nbsp;trading options and leverage,&nbsp;allowing you to implement your chosen strategies more accurately.</p></li></ul><p>Overall, demo accounts provide a valuable learning environment, but it's crucial to remember that they differ from real-world trading in several key ways. Transitioning to a real account requires careful preparation, managing emotions effectively, and understanding the potential differences in execution, fees, and market conditions.</p>

<p>Demo and real accounts differ primarily because demo accounts use virtual money, offering a risk-free practice environment, while real accounts use your own money, which involves financial consequences and emotional factors like fear and greed. Demo accounts lack the psychological pressure, while real accounts have real risk, and some technical differences may exist.&nbsp;</p>