There is a plethora of different Forex trading platforms, each of them having their own advantages, disadvantages, and characteristics, but how is a novice trader supposed to know which system will work best for him and which platform will best serve his trading expectations? The answer is simple: try it out.
Indeed, you may get quite confused when you see beginner Forex traders having higher-than-the-normal trading balances in their account but by the time you get deeper into the trading world, you will be welcomed by these disheartening words (Demo Forex Account) that eventually snatch all hopes of being rich away. But before your skip over some terms, let’s first find out how this system works.
What Is a Demo Forex Account?
As you may have probably heard, a demo Forex account allows traders to simulate a live trading space- without having to put any real money at risk. It resembles a video game as it enables you to start online free trading relatively fast so that you can practice real trading without risking real capital.
Even experts advise novice traders to start with a Forex demo account as their first account so they can easily and safely get a feel of what trading in the currency market is like, as well as to get used to the trading platform and the broker they are using. In essence, a demo account will enable you to practice and nurture your trading skills, along with provide quite a few other attractive benefits.
Owning a demo Forex account is like having free Forex training, and that’s because you can play out your trading skills without risking money, by using virtual funds instead. After all, the most successful people in the field are those who have practiced and learned their craft considerably – the same goes for demo traders.
How to Open a Demo Account?
To get your Demo account in place, you’ll first need to open a genuine trading account with a registered Broker. A Forex Broker will be more than happy to give you admission to trade in their online trading system – where you can freely trade different currencies of all countries.
This account can teach any novice trader how to open and close trades, and where to place the stop losses and reach profitability. A Forex demo account is perhaps the best way to help starters learn trading without endangering their capital. Nearly every successful trader started trading using this system to avoid being hit so hard with actual trading.
Trading using a Forex demo account will help you more than you’d think – you’ll get enough experience that will help you better understand trading and get to know your strengths and weaknesses.
Choosing the Right Broker
A simple Google search for Forex demo accounts will offer you hundreds, even thousands, of possibilities for brokerage. Clicking on any of them will most likely transfer you to a page of their website that explains in-depth how to activate your demo account and how that demo account will work.
It’s necessary to understand what features each demo account allows you to use and what features are not available for you at the moment, as many brokers tend to restrict the services offered on their demo accounts. Some brokers can block certain plugins or trading strategies or just limit the number of trades you are allowed to make. On the other hand, some may even offer a limited selection of currency sets on their account. Additionally, when looking for the right broker, ensure the one you’re looking into doesn’t have any surprise costs hidden in their demo version.
Develop a Trading Strategy
When you map out your demo account, you should make sure you come up with a winning strategy. Any strategy that generates a high recurring income is a winning strategy and should be implemented in the real account.
Trading during the first couple of days might not be easy – and that’s because trading is a learning path, so even professional traders can take the wrong turn. The reason? Many predictable and unpredictable factors surround Forex trading, making it impossible to be successful in all of your trades, especially as a novice, so you should stick to 70% wins and 30% losses.
Create a Trading Journal to Track Your Practice Trading Results
In this case, “practice makes perfect” so, with sufficient practice on your demo account, you will soon trade with more confidence and understand the market much better. Also, having a journal of all your trading activity can be quite beneficial. This will allow you to see what consequences could have been if you were trading with real capital. Since the market is constantly fluctuating, these results will never be the same, but at least you’ll get an idea of whether your trading strategy is working or not.
Certainly, this journaling will only be effective if you’re honest about your trading results. If you are, it can bring loads of opportunities your way. Most renown traders across the globe have mindset coaches, so it could also help to write up your emotional progress in terms of how you feel after losing or winning trade as it’s a sure way to prove to yourself that you have the necessary mental strength to start risking your own capital in genuine trading conditions.