A Forex demo or practice account is a good way to test out the services of a brokers trading platform, pip spreads, price quotes, support, news and additional trading tools such as charts and indicators.
Finding the Best Demo Account
If you are looking for the best demo account, you can look at our list of top ten Forex brokers and choose one and try them out. A demo account should give you the same services you would enjoy if you were trading real money but of course in terms of a demo account, you are only trading virtual money so you won’t be losing any real money, if your trading signals are not accurate.
When you use a demo account, you will either be a trader who has an account with another company and looking to change or you will be a beginner, who wants to learn the basics of trading the markets. Practice accounts are a great way for novice traders to get used to all the terminology which goes with placing trading signals such as – market orders, pip spreads, lot size, price quotes etc.
Opening and Using your Practice Account
If you are opening up a demo account, you need to check that the trading platform, will give you access to the same platform, that is used for live accounts. There are normally two ways of using platform itself and they are – An online trading platform which you use through your Internet browser or a trading platform which is installed directly onto your personal computer.
Forex demo accounts for new traders will show them how to place orders etc. Also try out their own Forex trading strategy and learn the risks and rewards of trading on margin. In terms of traders who lose money, the vast majority are over leveraged and its best to find out the dangers of leverage in virtual trading using dummy trades rather than real trading signals which will lose you money.
In terms of virtual trading accounts, you are really trying out the trading platform of you are an experienced trader and if you are a novice, its part of your trading education to get comfortable with order placement, learning about the markets and of course trying to make money – Is there one company which has the best demo account which stands out from all the others? Not really and if you look at our top 10 currency brokers, you will get good demo accounts with all of them. Finally, there free so you have nothing to lose by trying them out.
Demo Trading vs. Real Trading – the Important Differences
A trading platform you can try out without risking money is good for learning the basics of currency trading or comparing different companies services but they don’t show, if you will make money in real time trading.
There are a huge number of traders who can easily make money in a demo account and think there going to make money in real time trading and then soon see their trading account wiped and the reason for this is obvious – there is no money on the line when practising with dummy trades and this means, you don’t trade with the pressure of possibly losing money.
When real money is being risked the pressure on any trader is increased and it’s a fact that most traders cannot handle the pressure. When real money is being risked, the emotions of – hope greed and fear come to the fore and this then sees traders – run losses, cut profits early and override their system rules which soon sees them lose their money.
Forex trading is an emotional experience – the pressure is on and most people cannot handle the pressure. Perhaps a good comparison is with competitive sport. In practice a kicker in football will hit more kicks for goals, than he will in a real time game – Why?
The reason is obvious – think of the pressure you would feel, if you were walking out in front of a 100,000 people in a major game, knowing your kick can win the match! Of course you are going to feel different and have to keep your cool and emotions under control- the top sportsmen can do it and so can the top[ traders but most can’t and that’s why, only a small minority of traders win.
Final Words ….
So in conclusion, trading with a demo account is useful in terms of learning the mechanics of trading and comparing different company accounts but don’t be fooled if you make money in one, when you come to trade with real money, you need to get ready to deal with the real key to Forex trading success which is – keeping your emotions under control and trading with discipline and courage – good luck!