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>