What is the forex trading demo account?
Forex market is a decentralized market where each dealer distributes their own price using their trading platform. It is vital to learn the market before you enter. Use a forex trading demo account and open trades in the market without losing your real money. Demo accounts or practice accounts are easy to sign up and available for free. In this article, we will talk about the introduction of a demo account and its benefits.
A number of brokers provide different platforms for trading; MetaTrader 4 and 5 are the most popular. Every platform looks dissimilar in functionality; many brokers facilitate their customers with the same functionality. These functionalities include different type of charts, tools used for technical analysis, news feed, trade history, forex quotes/prices, tools for drawing and the feature of exchange currencies. Some brokers provide some additional features like tools for economic analysis and some fundamentals. Long term traders use these tools because of its importance.
On top of the software/platform, there are various tools, settings, and shortcuts. Below the menu bars, there is a charting window in which the price history of a currency pair is displayed. Right below the charting window, there is a terminal consists of multiple tabs in the terminal, providing access to Mailbox, markets, signals, account history, current tabs, news, and other information. Most of the brokers provide the same features with different arrangements. Learn how to use the platform, charts, and indicators. A better understanding of a trading platform is essential if you really want to become a trader.
Perform some demo trades on each platform before trading the actual amount. Demo accounts are useful for both beginners and the experienced traders; experienced trader experience their strategies, beginners to boost up their trading education and skills.
Spend some times with demo account; you realize that you can get benefits in short-term or long-term trade. The great benefit of a demo account is to understand either you can become a trader or not. Start with mini or micro demo accounts, these accounts are ideal for initial stages. Write down possible reasons behind every trade, it will help you to find out your weaknesses and mistakes.
Some benefits of using a demo account:
- You are trading with the virtual amount; you lose your virtual money, trade risk-free.
- Practice your trading under real-time market situations.
- Test different strategies and perform experiments.
- Completely understand your trading platform.
- Beginner traders can enter freely in the forex market.
- Experience the risk management.
- Check the impact of fundamental and technical analysis.
- Create a plan, define strategies and test in a demo environment.
Is a demo account differ from a live account?
There are some key differences between the forex Trading demo account and live account, you should consider these when you are going to use a demo account.
- There are no charges for chart packages when you are using a Forex Trading Demo Account.
- If you have an inadequate amount in your demo account, your trades may be rejected. But keep in mind, this scenario is not for live accounts.
- Some features are not applied on demo accounts; slippage, dividend adjustments, price movements with out-of-hours and interests.
- In case of your insufficient funds, trades will not be closed to cover your margin and losses in runtime. In real or live accounts it can happen.