Forex Demo Account
Why do you need a demo account to trade on the Forex market? This is one of the most common questions among traders. We will answer it in our article. The issue is that Forex is a very risky business, which means that your transaction at any time can bring you either a large income or devastating losses. In addition, the Forex market is more complicated compared to binary options: you need to be able to work with pending orders. You should be capable of setting take profits and stop losses. Additionally, you’re also expected to calculate your income and expenses. It is important to prepare for such a huge and scary uncertainty and obtain a lot of useful experience in the market. Sure, you wonder where you could get such valuable trading experience. The answer is to train using a demo account. It’s absolutely free, so you will lose nothing.
- 1. Why do you need a demo Forex account?
- 2. Registering your demo Forex account
- 3. Disadvantages of brokers with demo accounts
- 4. Advantages of a demo Forex account
- 5. Forex brokers with demo accounts
- 6. Demo trading and brokers
- 7. Your demo account
- 8. Forex demo account without registration
- 9. How to use a demo Forex account in the proper way
- 10. Forex and demo trading
- 11. A demo account vs. a real one
- 12. A virtual version of the market
- 13. How long should I use a demo Forex account?
- 14. When should I switch from a demo account to a real one?
- 15. The sum of a demo Forex account
- 16. Competitions on Forex demo accounts
- 17. Reviews
A demo Forex account is a test version of a real Forex trading account, a simulator that in practice will allow you to get acquainted with the trading process and test the terminal’s functions of a specific Forex broker without risking your personal funds. By trading with a virtual account without investing your money, you fully work in the real market, but in this case you carry out transactions using funds automatically credited to you once you register a demo account. Working with the training account, you will use absolutely all of the functions of the trading terminal that are provided to you in real trading (market analysis, various indicators, graphic elements, working with your personal cabinet, the history of applications, the movement of virtual funds, etc.).
A demo Forex account is an important option offered to users by leading Forex brokers. It is important for such companies to get an interested customer. Therefore, virtual trading on the simulator appears to be a unique opportunity to understand whether Forex trading is of interest to you or not. Additionally, when choosing a Forex broker, it’s worth considering that not every company working in this field has an opportunity to provide demo trading accounts.
We advise you, before you start trading on a demo account, to register on the Forex broker website. The procedure is fast. As a rule, one needs to specify an e-mail address. After you complete your registration, you will access the platform via email, and you can immediately make your first steps in Forex trading. A demo Forex account is a free, but very important, procedure, which is usually provided on an unlimited basis. Even having shifted to real trading, you can still continue using your demo account.
Why do you need a demo Forex account?
Many novice traders wonder why they need demo trading. Well, such a training account is very useful for anyone who is willing to become a true professional in this area. After reading all the necessary books on trading and passing training courses on the subject, you still will not feel well-prepared for real Forex trading. In addition to theory, you will definitely require practice, and this practice will be given to you via demo trading. Now, let’s enumerate the basic virtues of demo trading:
Your acquaintance with the market
If you are just a beginner in Forex trading, a demo account provides a unique opportunity to understand the very essence of Forex. It’s a good chance to get acquainted with real trading. In real practice you can learn how to place orders, take profits and stop losses, and see their effectiveness. In addition, you will make more than one deal and get the first, albeit virtual, profits and losses. Further, moving to real trading, you will feel much more confident, you will be able to better navigate through all of the intricacies and pitfalls of Forex trading. Moreover, it’s a good chance to avoid many mistakes in real trading, as you can emulate a wide range of scenarios using your demo account. Needless to say, it’s more than just valuable experience. If some folks keep telling you that you don’t need a demo Forex account, don’t listen to these advisers. Instead, focus on your demo trading.
Psychological preparation for the market
A demo account will enable you to prepare psychologically for real Forex trading, get used to the state of constant risk, and feel more confident. The transition from virtual to real trading is a serious step for every trader and absolute psychological readiness for it is ensured by successful demo trading.
Testing a Forex broker for trading
If you are looking for a reliable Forex broker, planning to change it to a company with more favorable terms of trade, a demo account will actually acquaint you with the opportunities of the new trading site. You will be able to assess how professional the broker team is and whether or not they’re honest with you. A demo account can be your first acquaintance with a broker. It will warn you against scammers who do not fulfill their obligations (issues with the trading terminal, your personal cabinet, lack of communication with technical support managers, etc.).
Testing of trading strategies
Trading on a demo Forex account will be a truly invaluable help to those traders who would like to test the effectiveness of various strategies, indicators, and oscillators. Working out the strategy, you can change something in it and add new tools, and all of this can be done without risk of losing your personal funds.
Creating a profitable trading strategy
Professional market players highly appreciate the possibility of demo trading through Forex brokers. Being in search of a profitable trading system, they also need constant testing of their ideas and strategies. Free demo accounts are ideally suited for this.
A free demo Forex account is a valuable tool of any trader, which should always be at hand in order to make trading very productive. To do this, utilize all the possibilities of your demo account and study the available indicators and trading strategies.
Registering your demo Forex account
To get down to demo trading, you require going through the procedure of a quick registration with the broker. First, you should choose a suitable Forex broker, go to their website, and fill out a special form of registration for the test account.
Having dealt with the form fields, you need to click on the «Register» button of the registration interface. After this, a letter with confirmation of the information should come to your email. Congratulations, you have opened a demo account; you can start exploring your trading terminal.
Disadvantages of brokers with demo accounts
To be clear, we mean the typical shortcomings of using a demo account. Let’s illustrate all the negative aspects of trading with a demo Forex account:
As a rule, demo Forex trading suggests dealing with capital of $10,000. Accordingly, on such a training account you work with other amounts to make transactions, so money management, profits, and losses will be different. When moving to a real account and transferring their funds to it, traders forget that they are already working with other volumes and they are unable to immediately achieve a significant flow of funds, which causes a feeling of disappointment in Forex.
Lack of responsibility
Getting down to demo trading, it’s worth keeping in mind that your virtual capital is not at all what to trade in your personal funds. Most often, traders are not serious about their demo accounts; they don’t care about the permanent losses of the virtual deposit («it’s not my money»). The feeling of responsibility becomes poor, and you become inattentive when trading. This leads to the fact that on a real account you will keep losing money simply because with demo trading you couldn’t work out another approach to Forex (for example, a responsible attitude to money).
Orders are executed faster than in real trading
During demo trading, the execution of orders is faster than in real trading, and the risks of delays are reduced. In the conditions of real trading, orders are not always executed immediately; it is often possible to observe the difference between the prices at the moment of placing the order and at the moment of its execution. So, you should be ready for possible losses due to such an unpleasant feature.
Emotions are one of the main components of Forex trading. The transition from demo trading to a real Forex account is usually accompanied by fears, uncertainties, and anxiety. It is necessary to be able to control your emotions and build a positive working mood.
Ongoing demo trading is harmful
Long demo trading, no matter how high your profits are, can’t avert the problem of moving to the real market. Demo trading doesn’t bring real money and you still want to go to the next stage. Don’t postpone your real trading, otherwise your adaptation to the real market will be more difficult. It will be harder to realize that mistakes here are more expensive.
Keep in mind these obvious downsides of demo trading. There are not so many of them, and you can easily cope with them, having built a conscious work ethic. Virtual trading can’t release your potential. You need to go to the real market to understand who you are.
Advantages of a demo Forex account
The advantages of demo trading are much greater than the negative aspects. That’s quite natural, considering the great potential it has for traders. Let’s cycle through the advantages of demo trading:
- A demo account can be opened very quickly – you need just a couple of clicks. Having come to the broker’s website and filled in the demo account registration form, you will immediately get the opportunity to trade and a virtual balance on the deposit. It will enable you not only to explore the capabilities of the system, but also to try it out in reality.
- Demo trading provides an opportunity to understand whether you are suitable enough for work on Forex or not. The matter is that Forex is a serious activity that requires a lot of preparation and constant training, and if you are reading this material, you are probably exploring the possibilities of this type of investment and you are interested in the theory of the market. This work doesn’t suit every person, so it’s worth remembering this.
- You can get acquainted with Forex trading for free, without losing your funds. With a virtual account, you can learn how to trade, earn income, lose money. In the form of a video game, you will receive invaluable practical knowledge, and you won’t lose a penny of your personal funds.
- Enjoy the possibility of constantly polishing your skills. It will be useful for a trader with any experience. You can test strategies and other tools with your training account, which will make you feel more confident.
Forex brokers with demo accounts
Do you want to know how Forex works? You just need to register with one of our Forex brokers.
In the article, we have described the features of Forex trading accounts, but now it’s time to consider them in more detail.
As you’ve already learned, training trades are carried out with the help of virtual money. This is a unique opportunity to gain impressive trading experience without the risk of losing your own funds, to get acquainted with the market and understand if Forex is really suitable for you. We advise you to start your acquaintance with the broker from a demo account. If you are forced to think that this is unnecessary, you should ignore such advisers. If demo trading has some limitations, if the broker prevents you from using the whole potential of demo trading, it’s an evident signal to change brokers.
Demo trading and brokers
Training accounts are offered by most Forex brokers, but there are moments that you need to take into account. As usual, the offered demo accounts might have restrictions (on available options, the number of assets, shares, the amount of the transaction). In other regards, they don’t differ from real accounts. Besides this, in some cases, virtual accounts become available for trading only after the transfer of the trader’s personal funds to the deposit.
Your demo account
By opening a demo account for you, the broker hopes to get a new client, as it’s profitable for the company. However, you should care about your advantages. As mentioned above, some brokers might urge you to first transfer your money to the deposit. Keep in mind, you need a demo account to explore the possibilities of their trading terminal, the quality of the broker’s work, and the professionalism of the support service. If you aren’t satisfied with the terminal and the quality of the broker’s work, you don’t owe anything to anyone and you can freely leave the platform and choose the most convenient option for demo trading anywhere else without restrictions and mandatory conditions.
Forex demo account without registration
Such an account is one of the most convenient options for virtual trading. To use it, you do not need to register with the broker. Such demo accounts are offered, for example, by such Forex brokers as Alpari (the official website), Grand Capital (the official website), SaxoBank (the official website). On their official websites you can learn the possibilities of a demo account online without any registrations.
Having studied a virtual account, you need to move on to the real market. Of course, you want to know how these accounts differ. The most important difference is in the psychology of your attitude to such work. If a virtual account allows you to work comfortably without any fears and risk of losing your funds, the real account requires serious, thoughtful actions, as you have transferred your funds to the deposit and expect an inflow of real money.
Real Forex trading is more dynamic and less comfortable in many regards; it involves different risks, fears, and loss of confidence. Despite the fact that it can bring you real income, you need to properly prepare for it. To do this, first of all, you should take seriously your virtual trading. You should seriously approach testing tools, rules of management, terminal capabilities. In this case just trading isn’t enough – you need to set a goal to earn some profit.
How to use a demo Forex account in the proper way
You certainly would like to know how to make virtual trading help you to properly prepare for the real market. You shouldn’t perceive a demo account as a sort of online game. Such a light-hearted attitude is typical to newcomers. They often make deals without considering anything. They don’t care whether they win or lose. Of course, at random, you can make a big profit or lose some money. Inspired by such an «easy» income, such folks move to the real market and here everything happens as it should be: they start losing money. Being totally disappointed, they keep posting negative feedback about Forex trading.
We advise you to use the full potential of demo trading. You’re expected to look at the whole functionality of the platform, test the available strategies, learn the indicators, work with orders, try to make decisions depending on the dynamics of the market, get the first income – all of this is an interesting and extremely useful experience. Remember, the virtual account is provided to you for informational purposes and here you don’t risk your personal capital. Then, having learned how to trade, develop and start implementing your trading strategy, which you should implement on a real account. Pretend this particular virtual capital is your personal money and try to increase these funds. Do not treat this work thoughtlessly – it’s a valuable experience that will pay off anyway.
Forex and demo trading
A demo account is the best option for starting to trade in the foreign exchange market (the whole truth about Forex is here). Getting acquainted with the opportunities of this market, you’re welcome to start with a virtual account. Of course, if you feel confident and have trading experience, you can immediately deposit money into a real account and start trading. However, if you’re just a beginner, if you are more serious about approaching a terminal search, a demo account is just what you need. The real value of a demo account is that you can use it to check any trading strategy. As you know, these days a lot of strategies are offered on the web under the title of «super profitable». On a demo account, you can have them tested and see that they’re nothing but a catchy ad. With the help of demo trading, you will be able to test different tools. It will make you less prone to psychological problems (fears, uncertainties, fear of the next step). Therefore, it is important not just to trade, but also to work consciously with a demo account.
A demo account vs. a real one
Probably on numerous forums you have already seen reviews of traders about how easily they have achieved a high yield on a demo Forex account. All of this is usually confirmed by screenshots where you actually watch huge sums. How should one react to this? As usual, these traders, having easily earned such fabulous amounts, go to the real market where they’re unable to earn anything to their great regret. It’s because the virtual account creates a feeling of easy earning: your money is safe, you don’t lose it, you can risk any amount. Having lost their minds, with a growing gambling attitude they opt for big deals, not caring about the outcome of their actions. As a result, they end up losing their funds.
A virtual version of the market
A demo account is just a virtual version of the real market, and you want to know whether it could be beneficial in terms of getting real trading experience or you should jump with both feet into the real market. Well, virtual trading prepares you for the real market, as you can practice its rules, try to make transactions, and correct your results using various strategies. We don’t recommend focusing only on demo trading. You can always get back to your demo account just to check some trading methods and indicators, but real trading will give you more: valuable trading experience, working out a psychological mood. What’s more – you will receive real money that you can withdraw in any convenient way and spend on your own needs.
How long should I use a demo Forex account?
It’s believed that the transition from a demo to a real account is best to do in a month. This gives you time to study all of the possibilities of the trading platform, learn to make various deals, test a wide array of strategies, and adapt to rules of management. Many traders spend too much time testing their virtual accounts, not realizing that they are simply wasting time, which is completely inefficient. Often this situation takes place due to the fact that the trader is uncertain about knowledge and he or she is afraid of losses. It makes no sense to be afraid of real trade, as fear will still remain, no matter how solid your strategy is. Sooner or later, you will have to shift to real trading, so don’t delay it.
When should I switch from a demo account to a real one?
This is one of the main questions in Forex trading. How should one determine the willingness to work in an uncertain and extremely dynamic market? For this purpose you should closely watch the following signs, corresponding to which, you can confidently shift to real trading:
- You’re good at working in a trading terminal, you’re familiar with its functionality, and you make the most of all its capabilities.
- The percentage of your positive deals is greater than your losses (approximately 60%/40%, 60% – positive deals, 40% – negative deals).
- You skillfully use the rules of management.
- You were able to test trading strategies and now you’re ready to work with them in the real market.
- You are able to control your emotional state and feel confident in trading, and you’re ready to cope with uncertainty and fear of suspense.
The sum of a demo Forex account
Offering you a training account, the broker will be happy to allocate virtual money; as a rule, it’s a fairly large amount. Do not be misled by this trick. From the options provided, you can choose the size of the training deposit. It would be more reasonable to work with such an amount you could potentially transfer to the deposit of a real account.
It will allow you to work on the demo account in the terms most approximate to real trading. You will get used to managing this amount. By opening a deposit for too much, for example $100,000, you will have to work with large flows of money, different incomes, and expenses. It will undoubtedly prevent you from starting real trading with a different size deposit, such as $100, for example.
Competitions on Forex demo accounts
Forex competitions in demo accounts are quite common on the market. That’s a unique opportunity not only to test your readiness for trading, but also to receive decent prizes, courses, and materials on trading, not to mention real money (sometimes these are significant amounts), which, in turn can be withdrawn in a convenient way and spent on your own needs. That’s why so many folks highly value these contests. In addition, the very fact of the possibility of making money without anything is a serious advantage of such events.
Participating in various Forex contests in demo accounts is a great opportunity to become more confident. You can experience the taste of victory. Brokers constantly roll out high-profile promotions and contests to support users working on demo accounts. As a rule, these competitions are free for users. Moreover, both newcomers and professional traders can take part in these contests. It’s worth carefully reading the terms of participation. Usually, such information is written on the official website of the broker, which also publishes information about the winners and their prizes. If you want to participate in such contests, choose a suitable Forex broker, go to their site, and see the nearest contests.