Forex Trading Demo Account, Practice Risk Free
A forex trading demo account can take any rank beginner forex trader and greatly assist them in moving forward to an intermediate level trader. As a forex trader your job is to progress from beginner level to intermediate level and then advanced, in steps. An advanced trader is profitable and can claim currency trading as a full time career or a long term source of income. A forex demo trading account is one of the steps in the process, follow the steps outlined here to progress to trading a live account.
List Of Reasons To Open A Forex Trading Demo Account
There are many reasons to open a forex trading demo account, here is a list of reasons:
Traders can practice using the trading platform for free, so they can get used to the user interface and display. Forex trading demo accounts are also called forex practice accounts.
Traders can learn to read quotes, observe spreads, and enter market orders, limit orders, and stop orders. Entering demo trades will become automatic after some practice, so get all of your mistakes out of the way in a demo account. Practicing the mechanics of entering trades is a great benefit in the process of going to real money trades.
Also, after forex demo account demo trades are placed traders can learn to watch the open orders and floating balances like equity, used margin, and free margin, to make sure they are not over leveraging their accounts. Working with 50:1 leverage or higher will require some getting used to. With some experience watching the floating balances, traders can then adjust the number of lots traded based, to help them determine how large of an initial deposit to make when they go to fund a live trading account.
See the example below, this account has an initial deposit of 10,000 EUR. If you sell two regular lots of the USD/CHF, here is the immediate impact on the margin balances. If you sell 2 regular lots of the USD/CHF you can immediately see that 37% of your available margin has been used up, and about 62% remains, then you can watch the equity fluctuate if you have a profit or loss on the trade. This is why demo accounts can teach you so much about trading on margin.
Traders can trade money like it is real with no risk, demo trading simulates live trading, gaining trading experience with no financial risk. In these accounts you can make risk free trades with a simulated account that contains fake money or paper money. We strongly recommend beginner traders open a demo trading account.
Demo Account Features To Look For
When looking for a forex trading demo account, make sure you have some of these features: Make sure you can adjust the size of the demo account initial deposit, like $10,000, $50,000, etc. In real life most traders will make a small deposit into a live account so try to simulate this when demo trading. Look for a demo account platform that allows you to set up trend indicators across at least 9 time frames, so you can trade with the trends of the market. Also, you can look for a forex demo account with no time limit, some brokers offer demo accounts that expire in 30 days, then you must open a new one repeatedly. So choose a demo account with no time limit. Also evaluate platform types, most brokers offer a forex demo account with metatrader platform, and traders can evaluate this versus an online system where you trade directly off of a web page, so no downloads are required. These accounts are sometime referred to as web trader accounts. Since most or all forex brokers offer demo accounts, the competition is good and you should be able to get what you want.
Test Your Strategies With Forex Trading Demo Account
New traders can practice trade their strategies without risking any money at all in a forex trading demo account. You can also use a demo account to see if the trade strategies, methods, or trading system you are using is working to make successful and profitable trades. If all of your practice account trades are all losers you need to look for another trading method and delay any real money trading.
Forexearlywarning offers all forex traders a profitable trading system. The strategies we use at Forexearlywarning work quite well but you must still demo trade to get used to our unique system. You must set up our trend indicators in a demo account, learn to set price alerts in your demo account, and learn to set trades and stop orders on 28 pairs. Learning to work with the forex economic calendar and The Forex Heatmap® also requires demo trading. Demo trading the Forexearlywarning system is strongly recommended for beginners. Our profitable trading system is fully detailed on our website and in our free forex lessons package.
Other Forex Trading Demo Account Topics
After you are successful at demo trading and testing your selected trading system, you will likely be ready to move on to trading small amounts of real money. A huge advantage of demo trading is that you can make a deposit into a live account, then seamlessly continue trading inside the same platform. Since you are used to all of the controls and user interface it makes it much easier to convert to real money live trading.
You can start trading live with as little as one micro lot which is 1/10th of a mini lot. We recommend starting with 2 micro lots then moving up from there to 4 micro lots, then 6 micro lots, etc. Trading with micro lots will also help you to understand your emotions and how you feel in a live trade, including reactions to profits or stop outs, but the experience you gain demo trading will be a buffer to your emotional response. Demo trading is very valuable in this regard. Trading micro lots is the next springboard to trading mini lots, then full scale trading. We have a more detailed article about trading micro lots on our blog.
A forex trading demo account is the beginning of creating a trading journal. Creating a journal of your trading history is easy. Your broker does most of the work for you. You should journal your demo trades and micro lot trades to monitor your progress. All you have to do is write down or take screenshot snapshots of the market condition when you enter a trade. If you do this and combine it with your account history in a demo account, you can measure your progress before trading live funds. If you open up a $10,000 demo account today and one month from now it has a balance of $12,000, you 20% profit is totally quantifiable and measurable.
Get started with demo trading and take one of the first steps in making the forex into a great source of regular income.