First let’s look at what a Forex Demo Account is
Sep 20, 2017 at 4:53 pm #992
A Forex Demo Account is a virtual trading account, credited with virtue money, that a broker allows its traders to open.
It is good to not that not all brokers have the option of opening a Forex Demo Account. Therefore, you should be very careful to check at the specifications of a broker before choosing to register with them, to ensure that the one that you choose allows Demo account especially if you are Forex Beginner.
Also, the brokers who allow their traders to open Demo Accounts with them have different requirements for their traders to open a Demo Account. some have no requirements at all for their clients to open a demo account and thus the clients can open as many Demo Accounts as they like without having to even open a real account first. However, there are other brokers who require that a trader first opens a Real Trading Account and makes a minimum deposit (will depend on the amount set by the broker) before being allowed to open any Demo Account. This therefore calls for your attention again when choosing a broker; for a beginner, it is paramount that they chose a broker who can allow them to open a demo account before opening and funding a real trading account.
Since the money credited to the Demo Account is virtual, any profits or losses are not real. This therefore means that you cannot withdraw any money from the Demo Account.
Using the demo account
A demo account is a very helpful tool to both the trading professionals and Forex Beginners. The word “Demo” doesn’t make it an inferior trading tool only meant for the beginners.
Mainly, a demo account is used for three purposes; namely:
- Familiarizing yourself with the trading platform of the broker of your choice.
Different Forex brokers use different electronic trading platforms. Therefore, when you register with a Forex Broker, it is always important to make sure that you first familiarize yourself with the trading platform which the broker provides.
The best place to do this is in a demo account. Here, you are free to learn how to execute orders and also familiarize yourself with the different trading tools in the platform without the fear of losing your money. THE MONEY IN THE DEMO ACCOUNT IS VIRTUAL REMEMBER!
- Sharpening your trading skills.
This applies especially if you are a Forex Beginner.
It is paramount that as a Forex beginner, you first practice how to trade in a Demo Account before going ahead to trade in a real trading account where you will be dealing with your real hard earned money. In the Forex Demo Account, you will learn how to place trades, close trades, place stop losses and take profits as well as how to use any of the trading tools like indicators or lines without risking your money. In the Demo Account, the losses you make are just “theoretical”.
REMEMBER, FOREX TRADING IS RISKY!
- Testing any trading strategy.
Before applying any trading strategy in your real trading account, it is paramount to first test it in a Demo Account so as to prove that it works and that it shall give the anticipated returns.
Failure to test your trading strategy may result to losses.10Sep 20, 2017 at 5:04 pm #994
Very good post chalithuo, thanks for your interest 😀10Sep 20, 2017 at 5:19 pm #996
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