Demo Forex Trading Account - Currency Trading Practice Account
Before beginners can start trading the real forex currency trading market, a forex beginner trader should look for a Forex trading practice account which is commonly known as a Forex demo account. This forex trading demo account practice account is provided for free by forex brokers and therefore also referred to as free Forex demo account.
This free forex demo account for beginners is provided to beginner Forex traders for the purpose of practicing their forex trading strategies and forex trading techniques as they learn how to trade the online foreign exchange market. This free forex demo account for beginners also allows the beginner traders to practice on the forex trading platform software that they will be using for online trading that is known as MetaTrader 4 software until they become familiar with its operation, the execution of forex trades using this MetaTrader 4 forex trading software and how to navigate the MetaTrader 4 platform and the forex currency trading charts that are within the MetaTrader 4 forex trading platform.
To start learning forex using forex trading demo online practice accounts, beginner traders s need to start with a demo Forex account, these forex trading demo accounts are similar to the real Forex accounts in terms of the actual Forex trading software as well as execution conditions of forex trading orders, the only difference is that for a forex trading demo a trader does not need to deposit any money when it comes to the FX demo account. The money used in the forex trading for beginners demo account is virtual currency, and it is not real money; forex trading for beginners demo practice trading account is used to simulate real money trading without risking money.
Online Demo Trading Practice Account - Learn Forex Trading Software with a Free Forex 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 forex demo trader can choose the amount of capital they want to practice trade with. The forex trading demo account example shown above the virtual balance of $100, 000 as shown above on the MetaTrader 4 Transaction Window and a beginner forex trade can use this $100,000 dollars virtual balance for forex currency practice trading.
Remember the Forex trading demo account is a free account and because learning Forex may take some time, currency trading brokers provide this as a way for beginner forex traders to study Forex trading and start without depositing real money.
Beginner forex traders should also look for an unlimited time practice trading 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 forex demo trading account is to allow to forex beginner traders access the real foreign exchange market as other forex traders participating in the online Forex market with real money, only that the difference is that the funds used in a forex trading demo account are virtual funds that are risk free, but everything else, from the platform software, forex trade order execution, forex spreads and forex currency price movement are the same as of those forex traders transacting the live forex trading market.
As Forex popularity grows and more financial instruments are introduced to be traded alongside forex currency pairs, these demo Forex accounts can also be used to practice online trading on these newly 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 trading 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 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 forex trends found in currency pair charts. Among the most popular financial instruments is Gold and Oil.
This type of forex trading demo account is meant to serve the following purposes in forex trading:
Learn Forex Trading Platform
The first thing that a Forex demo trading account is supposed to do or is supposed to be used for is to study the ins and out of the Forex trading software that your forex broker uses, a good example of a forex trading platform is the MetaTrader 4 forex platform. Once you register for a demo trading practice account with a forex broker and download their forex trading software, you will need to train on how to trade forex currencies using the forex platform you have just downloaded. Learning to operate this forex trading software is especially crucial for forex beginner traderss with zero knowledge of the foreign exchange market. If a beginner forex trader were to start directly investing with real money without knowing the working of a forex trading platform they can easily make a mistake by pressing the wrong button or placing the wrong forex trade order by mistake without even knowing.
Learn Forex Order Execution and Setting Forex Trade Orders
Beginner forex traders will not know the difference between a limit order and a stop order, beginner forex traders 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 forex beginner trader, 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 sell.
Test Your Forex Trading System and Forex Trading Strategies
A forex demo trading practice account is a perfect ground for testing your Forex trading system and forex trading strategies, As a beginner forex trader the first thing you need to have before you start forex trading online is a forex trading system that is based on Forex trading strategies. After coming up with your forex trading system you will use this forex trading for beginners demo account to back test it or what was anciently known as paper trading, this forex trading demo account trading is similar to the paper trading method only that it does not use pen and paper but the method of back testing is what is similar to that of paper trading method.
Until the time you start winning more on your practice forex 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 up to 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 money you invest with the better, start with $5,000 dollars, that's better, $20,000, you are now getting there, $50,000, now you have aligned yourself with the best odds because you will have enough capital to start forex trading with.
Ask yourself why most free demo trading accounts are set at account balances of $10,000, $50,000 or $100,000 because this is the amount of capital that will give the investor the best chance to succeed, because they will not be under capitalized.
Forex Trading Practice
This forex trading demo account - free practice trading account is a type of forex account offered by online forex brokers as a way to introduce beginner forex traders to their forex trading software platform and methods of trading orders execution. This where you Forex practice until you the time you can make profits on this forex trading demo account and then afterwards you can trade the live foreign exchange trading market.
The free forex 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 and at the same time get to know the execution methods of forex trading orders and test various forex trading strategies for free.
Using a forex trading for beginners demo practice Forex account is the best way to gain knowledge and to help in the understanding of the actual forex trading process. A good forex trading software platform to use for opening a forex trading demo account and trade with is the MT4 forex platform which is simple to learn, the learn forex MetaTrader 4 tutorial section which also includes the how to use MetaTrader 4 demo account tutorial is also provided here on this Learn Forex Trading Website, under the right menu you might want to read the how to use MetaTrader 4 tutorial before opening a forex trading platform.
By using forex trading demo accounts, a beginner forex trader has the opportunity to learn executing forex trade transactions without risking their own money. The forex broker will set up a demo 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 choosing a forex broker, No Re-quotes Execution Policy is the best execution method of forex trading orders, many forex 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 forex traders just hate being requoted. Imagine trying to place a forex trading order instead of the forex 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 forex order. A No-Requotes Policy for forex order execution is the best option to choose from.
There are many advantages of using an online forex trading demo account, the biggest advantage is having the time to figure out how each forex trading platform works, how to navigate the forex trading platform and know what each function does. On top of that you can use the online forex trading demo account to test your forex trading 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 website to work on a free Forex practice account, they get a clearer understanding of what to look for before, during and after each forex trade transaction. These learn forex trading topics are aimed to teach every aspect of Forex online trading, most forex beginner traders just learn about; a Forex trading system, how to generate trading forex signals and then start investing on the real forex market, well it takes them less than a month to lose their invested capital. After all these beginner forex traders did not study about forex money management topics under forex 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 trading account until you do.
Even the experienced investors and forex currency traders will also test the Forex demo accounts of other online forex trading brokers, especially if they want to change their forex broker. This is done so as to help them get to know more about the execution of the new Forex broker and also study the new software of the new forex trading broker. Nowadays most traders just learn one forex trading platform, the MT4 forex platform software, which is provided for download by all forex brokers for free so when a forex trader moves from one broker to another they will still use the same forex trading software without the need of learning a new Forex trading software all over again.
The purpose of the FX trading demo account is to familiarize the forex beginner trader with the various methods of analyzing forex chart price movements and forex trading orders execution - it provides beginner traders with examples of how the forex market works without the risk of losing cash. a beginner forex trader can also learn how to execute forex trading orders and how to analyze forex currency pairs and when and how to open a forex trade transaction, how to read a forex currency quote, how to navigate price trading charts so that they master the various forex platform transactions before progressing to trade the live forex trading market.
Looking at the forex trading chart below a beginner forex trader would not know how to trade or execute a trade transaction if they were to start investing immediately. A forex beginner trader would almost certainly lose their money because they will not know what they will be doing. This is why all beginner forex traders start with a Forex trading practice demo account provided for by their forex broker for free so as to practice on the forex platform software risk free using a practice online forex trading demo account before opening a live Forex account.
FX Practice Account - Learn Currency Charts using a Practice Forex Trading Demo
Learning the forex broker’s software
Because different types of online forex trading platforms are provided to investors like the ones listed on this page; all forex brokers will have demonstration accounts with which a beginner forex trader can use to learn the new forex trading software and about the various forex trading tools provided by the forex broker on the forex trading platform software.
Web Based forex Trading Platform - Forex traders can learn this software with a Practice Forex Free Demo Account
Looking at the above example - a forex trader would require to familiarize themselves this new forex trading software afresh before starting to use this new forex platform - an investor would then open a Forex demo trading account and use it to learn the new forex trading software.