Forex Demo Trading is Really a Worthable

Forex demo account gives you a real account experience; the only difference is that you do not use real money in the demo account. You do not trade with real money and it allows you to learn about the mechanics of forex trading and test your trading skills, so it is completely risk-free.

You can open a demo account for FREE with most forex brokers. These “pretend” accounts have most of the capabilities of a “real” account. Most of the broker wants you to learn the ins and outs of their trading platform, and have a good time of trading without taking risk of your investment. You should do the demo trade until you develop a good profitable and risk management system.

In this chapter we will talk about the uses of demo account and how to use it in a better way.

What is Forex Demo account?

A forex demo account is the safest way to learn forex trading. It is an account that can be opened on almost every type of trading platform and helps traders get a feel of the real market without having to invest their hard-earned money. The best demo accounts will offer an app, as well as an online account. They will also match the live platform and offer maximum functionality to ensure the experience is better. Other than the functionality and tools included in demo accounts provide a viable and effective way for beginners to learn how to trade without the risk of losing their own money or the money of others.

Why it is important to use a Demo account?

Trading is not a child’s play. While it does provide unlimited possibilities for profiting, it also involves a large amount of risk and most brokers typically warn almost everywhere when it comes to leveraged products, losses may exceed your deposited money. That is why traders who are new to forex can take advantage of using their platforms and practice through demo accounts.

The trading platform is what the user sees and experiences during his everyday trading sessions. Given the great variety of brokers and the even greater number of platforms there are, it is strongly recommended to learn the features and quality of each platform by trading with play money before committing real funds.

First and foremost, each trader must make himself familiar with how an order is placed within the new platform. In most cases, users enter a long position on a currency by clicking on the “ask” quote, or buy button, on a pop-up window, while placing a short order is done by hitting the “bid” quote, or sell button.

Some platforms, however, also allow you to place orders directly by clicking on the chart. Meanwhile, some offer you the possibility to choose whether you want to place a limit or a market order after the quote ticket pops up, while others require you to do that in advance.

Other key points, one should consider becoming familiar with, are the spreads, the lot size you can trade and how to set a stop. Spreads can be fixed or variable. So, these are the things you should know before start with live account.

Use of Forex Demo Account

A forex demo account is actually a ‘must have’ regardless of one’s trading experience. Even the elite hedge funds and prop trading institutions always have a paper trading or a demo trading account handy for traders to keep practicing and honing their trading skills.

The benefits of maintaining a forex demo account is therefore not just to assist beginners but is a good practice in the long run. Here are some key advantages of having a forex demo account.

Practice trading: The most obvious of all, a forex demo account is primarily used to practice trading and to get familiar with the trading conditions. Most forex brokers offer a similar data feed in a demo account to a live account, meaning that even though you are trading in a demo environment, the market conditions mirror the live markets. This ensures that practicing traders get to test their prowess in a safe and risk-free environment

Test your trading strategies: A forex demo account is the first place to start when you come across or develop a trading strategy. It is recommended to test your trading strategy on a demo account in order to see how well your strategy is likely to perform. A forex demo account with its risk free trading environment therefore allows traders to test and tweak their trading strategies without the risk of having to put up real trading funds

Risk management: A forex demo account is also helpful for traders to manage their risk. Factors such as how many positions to open, or how many units or lot sizes to trade can be cumbersome initially. But when practiced on a demo trading account, traders can get to a point where risk management in terms of position sizing can become second nature and thus makes moving to a live trading environment a lot easier.

How to get practiced in demo account

Instead of randomly creating a trading account, follow these tips below to derive the most out of your demo trading account.

Demo Funds: Make sure that the demo funds you use closely mirrors what your actual trading equity will be. For example, if you are planning to starting trade with $500 in real money, then it makes no sense to open a demo account with $5000 in virtual funds. It is always best to keep your demo trading account as close to the real account as possible

Leverage: Select the leverage, which should be the same leverage that you are likely to use with your real trading account. It goes without saying that always open a demo account with the same broker that you plan to trade with real funds. This ensures that the trading conditions such as spreads/swaps and order levels will be the same across demo and live trading accounts

Stick to a trading strategy: A trading strategy is only as good as how familiar you are with it. Add in money management and some experience on how you expect the strategy to work and you could be looking at making consistent profits. Once you select a trading strategy, make sure to trade with it for at least 60 days, regardless of how good or bad your demo equity rises or falls to. Discarding a trading strategy merely because you hit a string of losses will only land you back at square one. So keep going at it and then review your trading strategy’s performance on the demo account after 60 days.

Reliable Support : Another feature of significant importance of a newcomer should test is how responsive and helpful the support is. Some brokers offering you the possibility to start a chat and ask questions within the client login to ask the queries of forex start ups and Technical support. From this you can get the knowledge of how the support is. In future it will be helpful for your live account with the broker like lost passwords, technical issues, problems with depositing or withdrawing money.

Treat your demo account as if it were real: Emotions play a big role in the financial markets and there is an element of risk involved when it comes to trading with a real trading account. With a demo account, traders end up taking more risks. With some practice, you can quickly learn to treat your forex trading demo account as if it were real which will help you build the same mindset as if you were trading on a real account.

Conclusion

As a complete beginner to the world of Forex trading, what should you know? The most important thing to understand before you begin trading with real money is what exactly you want out of a platform. Finding the best platform for you means doing your research, understanding what you need and working towards it. We Winstone Prime providing you a best MT4 and MT5 platform for trading and here is our Winstone Prime demo account details you can check here. 

For those entirely new for Forex trading, demo trading provide a great space to learn, grow and develop away from costly mistakes and expensive accidents. Feel free to create as many demo accounts as you want to find the best fit for you.

All in all, a demo account can help you in many ways which is why so many novice traders start out this way. It means that you dramatically reduce the risk of financial losses and you can look forward to feeling far more confident when you start trading for real. Even after you decide to trade live, demo trading can be very valuable. Many successful traders will test strategies in a practice account before they try them out with real money.

Happy Trading