Forex Demo Accounts are essential and here’s why.
If you seriously want to make money trading Forex and you have no prior experience, it is pretty much essential that you begin by practicing your trading on Forex Demo accounts.
Using Forex Demo Accounts in conjunction with training materials such as our own Easy Forex Trading Lessons , will ensure that you can afford to learn from any mistakes you may make, without risking one penny of your own hard earned cash.
I can tell you from personal experience, you will make mistakes when you begin – even simple mistakes can cost you money if you are on a live account.
There are 3 basic areas with which you need to get to grips with in order to see any chance of real success.
- Your trading platform (Mt4/5)
- Fundamental analysis – Learn how to interpret the world economic news and how it can effect the rise and fall of interest rates and currencies.
- Technical analysis – Forex technical analysis involves looking at patterns in price history to determine the higher probability time and place to enter and exit a trade. As a result, forex technical analysis is one of the most widely used types of analysis.
Once you understand these three areas, you will have a better idea of when and where to enter into or close off a trade – this can be the difference between making a profit or a loss.
Familiarizing yourself with the Metatrader MT4/5 platforms and for example, understanding Lot sizes when you open a trade, can be the difference between just losing a small amount to wiping your account out on a losing trade.
How and where to place stop losses is just another example. You need to know your trading platform and what all the bells and whistles do and learn how they can help you.
Opening A Forex Demo Account
When you open a Forex Demo Account, it is automatically pre-funded with however many $000’s your broker has offered – it is your “play” money to practice with.
Forex Demo Accounts do not normally use live data to trade with (although some do), but historical data and this is what makes it the perfect platform to use as a training account. It gives you the tools required to apply your knowledge or the knowledge gained in our “Easy Forex Trading Lessons” and other training material such as that provided by your Free Demo Account broker.
A demo account gives you the opportunity to begin to understand the principles of Forex trading and helps you to choose the most suitable strategy for you without any risk of losing real money.
Even experienced traders will use Demo accounts to test (back-test) any new systems or strategies in order to ensure they are viable and will not lose money.
You can open a Demo account with any reliable broker for free.
It is worth noting however, that most demo accounts are offered for a limited time frame before the broker in question wants you to open a “Live Account” and you may find that the time needed to hone your skills has run out (not everyone has the same learning curve). If this happens to you, simply open another demo account with a different broker.
Because demo accounts are free, this shouldn’t present a problem and in fact, as most brokers offer their own training platforms, this can sometimes be very beneficial.
Don’t be rushed into trading live with real money until you are ready. Practice makes perfect – but remember, you will not win every trade – you will have some losses. Even veteran traders lose a % of trades.
This Easy Forex Trading Lessons website features a number of trusted brokers who in addition to offering Free Demo Accounts, offer a good amount of Free Training Materials which compliment our own Easy Forex Trading Lessons. Choosing any one of them will help see you on your road to being a successful Forex Trader.
The foreign exchange market has opened up huge opportunities for everyone, regardless of your financial situation. It can be a full time or part-time trading and a great source of additional income.
There are Forex Brokers who offer micro accounts for those with only a small disposable fund and some even offer Free no deposit bonuses such as XM. If you already have some experience then great, by all means take advantage of such offers.
Whilst such accounts may also appeal to some as a means to start trading with minimal risk before any training (usually the impatient type with a cash surplus willing to take a gamble). There is no real reason to risk throwing your money away when you have at your disposal a multitude of Forex Brokers willing to give you totally Free access to a Forex Demo Account and free training materials.
The decision as to how you start is yours, as long as you are aware of the risks associated.
Remember, a little knowledge can be a dangerous thing, but practice makes perfect.
Wishing you great success.