Demo Account - Practice Account - Demo Forex MT4 Account
Before beginner traders can begin trading the real forex trading market, a beginner should look for a Forex trading practice account which is oftenly known as a Forex demo account. This demo account or practice account is provided for free by brokers and therefore also referred to as free Forex demo account.
This free demo account for beginners is provided to beginner traders for the purpose of practicing their forex strategies & forex trading techniques as they learn how to trade the online FX market.
This free demo account for beginners also allows the beginner traders to practice on the trading platform software that they will be using for online forex trading that is known as MT4 software until they become familiar with its operation, as well as the execution of forex trades using this MetaTrader 4 software and alos learn how to navigate the MT4 platform and the trading charts that are within the MetaTrader 4 platform.
Demo Forex MT4 Practice Account - To start learning forex using demo online practice accounts, beginners need to start with a demo forex trading account, these demo accounts are similar to the real accounts in terms of the actual Forex trading software as well as execution conditions of trader orders, the only difference is that for a demo account - a trader does not need to deposit any money when it comes to the forex practice account. The money used in the forex trading for novice traders demo account is virtual currency, and it is not real money: forex beginner traders practice demo account is used to simulate real money trading without risking money.
Online Demo Practice Account - Learn Forex Software with a Free Demo Account
The trading demo account will have a virtual balance of $5,000 or $10,000 or $50,000 or $100,000 and a demo trader can choose the amount of capital they want to practice trade with. The forex demo account example shown above the virtual balance of $100, 000 as shown above on the MT4 Transaction Window and a beginner can use this $100,000 dollars virtual balance for forex currency practice trading.
Remember the demo account is a free account and because learning Forex may take some time, forex brokers provide this demo as a way for beginner traders to study Forex trading and start without depositing real money.
Beginner traders should also look for an unlimited time practice account to ensure that they get enough practice time until they are ready to invest in the live forex trading market.
The main purpose of this demo account is to allow to beginners access the real forex market as other traders participating in the forex market with real money, only that the difference is that the funds used in a forex demo account are virtual funds that are risk free, but everything else, from the platform software, forex trade order execution, forex spreads and currency price movement are the same as those of traders transacting the live forex market.
As Forex popularity grows and more financial instruments are introduced to be traded alongside currency pairs, these demo forex accounts can also be used to practice online trading on these new added financial instruments.
Commodities: GOLD and SILVER
Futures: CORN, WHEAT, SBEAN
Energies: NGAS, OIL
Stock Indices: DOW, NSDQ, SP, NK, DAX, FTSE, SMI, ESX50 and CAC
These financial instruments that are also gaining popularity in the online spot trading market, can now also be traded on the online trading demo account practice account. These financial instruments are popular because they are used to hedge currencies trades as well as provide additional financial instruments that can be traded online so as to diversify the portfolio of investors and online traders. These financial instruments are traded like this; when there is not enough liquidity or volatility in the forex market then investors and online traders look for this liquidity and volatility in these alternative financial instruments. The popularity of these financial instruments also means that these financial instruments have also developed trends that can be analyzed just like the trends found in currency pair charts.
This type of forex trading demo account is meant to serve the following purposes in forex trading:
Learn Forex Software - Forex Demo Platform Training
The first thing that a Forex demo account is supposed to do or is supposed to be used for is to study the ins and out of the trading software that your broker uses, a good example of a trading software is MT4 platform. Once you register for a demo trading practice account with a broker & download their forex trading software, you will need to train on how to trade currencies using the trading platform you have downloaded. Learning to operate this forex trading software is especially crucial for beginners with zero knowledge of the FX trading market. If a beginner were to start directly investing with real money without knowing the working of a platform they can easily make a mistake by pressing the wrong button or placing the wrong forex order by mistake without even knowing.
Learn Forex Order Execution and Setting Forex Trade Orders
Beginner traders will not know the difference between a limit order & a stop order, beginners will also not know when to buy or sell or which currency to buy and which currency to sell especially considering the fact that forex currencies are transacted in pairs and buying of one currency is also the simultaneous selling of another, a concept that can confuse a beginner, therefore, the need to start with a demo trading forex practice account until the time that they get to know which currency to buy and which to sell and when to buy and when to sell.
Test Your Forex System & Trading Strategies
A forex demo trading practice account is a perfect ground for testing your Forex system & trading strategies, As a beginner the first thing you need to have before you start trading online is a forex trading system that is based on Forex trading strategies. After coming up with your trading system you will use this forex trading for novice traders demo account to back test your trading system or what was anciently known as paper trading, this forex trading demo account trading is similar to the paper method only that it doesn't use pen & paper but the technique of back testing is what is similar to that of paper trading method.
Until the time you start winning more on your practice trades only then - you can then consider to invest in your real forex trading account. Starting with $1,000 dollars or more is recommended, it is best to save your money upto at least $1,000 dollars that way you have a fair chance of succeeding as you will not make the number 1 mistake in Forex trading: under capitalization. In fact the more well capitalized your account is the better, you can begin with $5,000 dollars, $20,000 or $50,000 - just make sure you've enough capital to start trading with.
Ask yourself why most free practice accounts are set at account balances of $10,000 or $50,000 because the more well capitalized a account is the better the chances to succeed, because these accounts will not be undercapitalized.
Forex Trading Practice
This trading demo account - free practice account is a type of account offered by online brokers as a way to introduce beginner traders to their forex trading software platform and methods of trade orders execution. This where you forex practice until the time you can make profits on this forex practice account and then afterwards you can trade the live forex trading market.
The free demo account for beginners is a great way to get started and learn the specifics of online forex trading with no risk of losing money & at the same time get to know the execution methods of orders & test various trading strategies for free.
Using a forex trading for beginner traders demo practice account is the best way to gain knowledge on how the market works & to help you in the understanding of the actual forex trading process. A good forex trading software platform to use for opening a practice account and trade with is the MetaTrader 4 platform which is simple to learn - the learn forex MT4 tutorial section which also includes the how to use MT4 demo account tutorial is also provided here on this Learn Forex Website, under the right navigation menu you might want to read the how to use MetaTrader 4 tutorial before opening a trading software.
By using forex trading demo accounts, a beginner has the opportunity to learn executing trade transactions without risking their own money. The broker will set up a practice Forex trading account for you for free so that you can test their Forex trading software, their execution - execution is considered by most investors and traders as an important aspect when it comes to choosing a broker, No Re-quotes Execution Policy is the best execution method of orders, many order requotes will mean sometimes investors not getting their orders executed, or if the orders are filled/executed they will be executed at a price that is not better than the one previously quoted plus the fact most online traders just hate being requoted. Imagine trying to place a order instead of the order getting executed instantly you get requoted, then you have to place another confirmation order, if you get requoted 5 times you will have to place 5 other confirmation orders, plus the original order. A No-Requotes Policy for order execution is the best option to select from.
There are many advantages of using an online forex practice account, the biggest advantage is having the time to figure out how each forex platform works, how to navigate the forex software and know what each function does. On top of that you can use the online forex demo account to test your strategies to see if they work before switching to the real forex trading market.
Many beginner Forex traders find that by putting the knowledge on this learn forex trading site to work on a free Forex practice account, they get a clearer understanding of what to look for before, during and after each trade transaction. These learn forex trading topics are aimed to teach every aspect of Forex online trading, most beginners just learn about; a Forex trading system, how to generate trading signals and then begin investing on the real forex market, well it takes them less than a month to lose their invested capital. After all, these beginner traders did not study about forex money management topics under key concepts tutorials, neither did they read about forex draw-down and maximum draw-down, and the best of them all LEVERAGE. If you have no idea what forex leverage is don't open a live forex account until you do.
Even the experienced investors and traders will also test the demo accounts of other online forex trading brokers, especially if they want to change their broker. This is done so as to help them get to know more about the execution of the new broker and also study the new trading software of the new forex broker. Nowadays most traders just learn one forex trading platform, the MT4 platform software, which is provided for download by all brokers for free so when a trader moves from one broker to another they will still use the same trading software without the need of learning a new forex trading software all over again.
The purpose of the forex demo account is to familiarize the beginner trader with the various methods of analyzing chart price movements and trade orders execution - it provides beginner traders with examples of how the forex market works without the risk of losing cash. A beginner can also learn how to execute orders and how to analyze currency pairs and when and how to open a forex trade transaction, how to read a currency quote, how to navigate forex price trading charts so that they master the various platform transactions before progressing to trade the live forex market.
Looking at the chart below a beginner would not know how to trade or execute a trade transaction if they were to start forex trading immediately. A beginner would almost certainly lose their money because they will not know what they will be doing or which button to press. This is why all beginner traders start with a Forex demo account provided for by their broker for free so as to practice on the platform software risk free using a practice online forex trading demo account before opening a live account.
Demo FX Practice Account - Learn Charts using a Practice Demo Account
Learning the broker's software
Because different types of online forex trading platforms are provided to investors like the ones listed on this page; all brokers will have demonstration accounts with which a beginner can use to learn the new forex trading platform & about the various forex tools provided by the broker on the trading platform software.
Web Based Software - Traders can Learn this Software with a Practice Forex Free Demo Account
Looking at the above examples - a trader would require to familiarize themselves this new forex trading software afresh before beginning to use this new platform - a trader would then open a demo trading account & then use it to learn the new trading platform.
