Not sure about forex trading yet? No need to rush. There is a lot that needs to be learnt to be a guru in this trade. Good news is that there are platforms where you can learn and develop your skills and strategies as you get ready to make a real investment. As you already know, forex trading is the buying and selling of different currencies online. The forex market is the leading market in the world in terms of capital investment.
Forex Trading Demo Accounts
There are many forex brokers available on the internet today. You have probably seen a number of pop-ups here and there. Forex brokers are firms or companies that provide online forex traders with a platform where they can trade. In order to trade, one is required to create or register an account with the platform of choice.
Forex trading can seem complex especially to beginners. There are a number of terms that may even confuse you. One needs to be cautious before making any decisions on the trade. But how and when does one gain the skills on how to trade without exposing the hard earned capital? Luckily, you can learn most of the techniques and skills from a forex trading demo account.
What Is A Forex Trading Demo Account?
This can be described as a pretend account. Basically, it has many of the capabilities that you will find in a real account; the only difference is that in this case, all these provisions are ‘fake’ but help you develop your skills.
Why Demo Accounts Are Free
Forex trading is rewarding, probably the most rewarding investment if one can learn how to correctly predict the market trends. The forex broker wants you to reap this benefits and that’s why he provides you with a platform where you can learn your way in, out and around the forex trading platform. He wants you to develop skills that will make you love forex and make a real investment without exposing your capital to great risks. With a demo account, you can safely assess your skills as many times as possible.
It is prudent to stay away from real trades until you are consistently making virtual money from the demo account.
Different Forex Brokers Have Different Platforms
The forex trading platforms do not have a specific layout of the demo accounts. However, though the platforms may appear to be a bit different, many have the same features. For instance, you will find charts, news, forex prices or quotes, drawing tools, buying and selling provisions among others. Some platforms have many features while some have just the main ones. Some platforms have the same features but in different arrangements.
When do I know it’s time to make a real trade?
Forex experts recommend that one should place no less than 50 trades on a demo account before going real. Ideally, this will help equip you with the skills and specifics of placing an order on the platform. That said, if you can confidently complete the following tasks, you are well on your way to live trade success
- Set the limit and stop time at the time of entry
- Place a limit order
- Ask and bid
- Differentiate between a variable and a fixed spread
- Stop an order
- Tell a typical spread from one that is not
- Identify the lot size that you can trade in
- Know when or not to mix lot sizes
As already mentioned, different platforms have different designs. In order to buy a currency pair, some will require you to click on the prices as displayed on the chart while others require the use of a pop-up window. When buying or selling a currency pair, you will find two terms; ask or bid. Asking means you want to buy currency pair while bidding means you want to sell.
Learning Never Stops
Demo trading equips you with the skills of live trades, with real money. Even after you feel that you have acquired the skills, do not trash your demo account. It is always a great platform for testing new strategies before making them real.