Demo accounts: what they teach and where they lie
What you learn in 3 minutesA demo account costs nothing to open and nothing to trade, so it is the cheapest place to learn how the platform works and how the arithmetic of a position adds up before any naira leaves your bank account. It teaches the mechanics honestly, but it cannot teach you what happens to your order when the market moves fast, and it cannot teach you how losing real money feels. This lesson shows where the demo tells the truth and where it quietly stops being useful.
One pip on a standard lot, and what a fast market can add
| Step | Amount | Note |
|---|---|---|
| Instrument | EUR/USD | the pair used in this example |
| One standard lot | 100,000 units | the standard contract size |
| One pip on one standard lot | 10 units of the quote currency | 100,000 x 0.0001 = 10 |
| Naira cost of one pip | ₦15,400 | 10 units of the quote currency converted at ₦1,540 per unit; this rate varies between brokers and over time |
| Demo fill on a calm market | ₦15,400 per pip, filled at the price shown | the demo assumes the price you see is the price you get |
| Live fill on a fast market | ₦15,400 per pip plus slippage | the fill may be a few pips away from the price shown, so the cost per pip is the same but the entry is worse |
The broker may round the pip value, add a spread, charge a commission, or quote a different exchange rate. Requotes can also appear on a live account when the price moves before your order is accepted. These details vary between brokers.
The mistake people make here
The common mistake is to treat a demo account as proof that a strategy works, because the demo fills every order at the price on the screen and never slips. In a fast market, a live order may be filled several pips away from the price you saw, and a requote may ask you to accept a new price before the trade goes through. The demo also cannot show how it feels when the money at risk is your own, which often changes how long a person holds a losing position. Use the demo to learn the buttons and the pip arithmetic, then move to a live account with an amount you can afford to lose, and expect the fills to be less tidy than the demo.Check yourself
On a demo account, you buy 0.10 lots of EUR/USD at 1.0850 and close at 1.0860. How many pips did you gain, and what is that in naira if one pip on one standard lot is ₦15,400?
The price moved from 1.0850 to 1.0860, which is 10 pips. One pip on 0.10 lots is one tenth of the standard lot value: ₦15,400 ÷ 10 = ₦1,540. So 10 pips x ₦1,540 = ₦15,400. The demo would show this as a clean gain, but a live account might fill you a pip or two away from those prices.
If the same trade slipped by 2 pips on entry on a live account, how much more would the entry cost on 0.10 lots?
Two pips on 0.10 lots is 2 x ₦1,540 = ₦3,080. That is the extra cost added to the trade because the fill was worse than the price shown.