Entering forex trading without enough preparation is one of the easiest ways to lose capital, but that is what many beginners do after they are enticed by the lure of quick profits.

 A demo account provides a no-risk environment where traders can simulate actual-market conditions using virtual cash. This gives traders the benefits of using a live account and does not carry the risk of losing money. This is an invaluable experience because traders can learn about the platform, learn about order execution, and gain some remote knowledge of market behavior, while developing confidence in the process. Platforms like MetaTrader have tools, charts, indicators, etc., that are identical to those used in live trading, so the demo account is realistic in that regard. A demo account not only allows a trader to become technically familiar with the platform , but it provides traders the opportunity to test strategies and money management techniques in real time. 

It is important to be practicing discipline, proper methods of stop-losses and take-profits, and the evaluation of various approaches; sometimes the only way to evaluate a method is to go through a process of trial and error before actually risking real money in the real market with your hard earned cash. Most importantly, demo trading helps in the management of the psychological aspects of trading. A loss coming from fear, greed, and impulsivity often impact live-trading practices and lead to losses but demo trading helps us develop better emotional control, complacency, and patience. 

No one will claim that demo trading can replicate the actual stress of losing real money in a live account, but the demo act serves as a launch pad for building knowledge before real losses occur.