While business provides unlimited possibilities of profiting, risks are also likely. Trading through online platforms such as Forex market is no odd to this rule as poor business strategy and lacking knowledge may send you into deep financial troubles. However, as a new Forex trader, there is a perfect way of familiarizing yourself with various trading aspects in Forex without losing your money.
Forex demo account is an online trading practice account that not only provides a simulated risk-free trading environment but also gives the new investor trading experience.
With Forex demo account you will be able to access exclusive trading tools for free. Whether you want to test your trading strategy, place an order, manage existing trade positions or even networking with different brokers, then the free demo account will give you all this services freely.
Benefits of Forex Demo Account
As a new trader or beginner in Forex trading platform, it is highly advisable to test you trading skills through a Forex demo account before investing real cash in live accounts.
There are various benefits of having a forex demo account and we have discussed them in details below. Sit back, take you coffee and as we begin our count.
1. Tests your trading strategy
Demo account helps a trader to develop, improve or optimize trading skills. How is this achieved? It is pretty simple. Let us take an experienced Forex trader with a reputation of profits gains. Such traders do have some secret which has enabled him or her stay strong in the market. This secret is what we refer to as a strategy.
While you think you have some good business strategy, it is highly recommended you first put your practice in a risk free trading environment preferably the Demo account . Traders can do all the tweaking, variation or testing of strategies without losing money.
2. Risk management
Business is a no child play and risks are real. The forex trade risks are the financial loses that do happen due to various market factors. While some of these risks may be due to natural factors, others may be due to common mistakes done by traders and thus may be avoided.
Not that all traders who venture into Forex will meet there expectations, in fact a very small percentage of investors will make or surpass their expectations.
With the Demo account, the likelihood of facing such risks is minimized. For instance, you will learn through the demo account that assets, money streams and liabilities are greatly influenced by the exchange rates and thus when you put live cash into the platform you can be keen on such matters.
Some traders will be emotional when they are dragged into a loss and they may fail to try to learn where they went wrong and instead they take all remaining amount and put into the investment. With Demo account you will be able to learn how to control emotions in real account.
3. Free trading
Opening a demo account is absolutely free. As if that is not enough, operating this account is also absolutely free. You can do virtual trading and test your trading practices while monitoring your performance. The cash you use in the Demo account are virtual dollars.
Some Forex traders will feed data from their live accounts into virtual accounts hence you will be given that feeling of real trading environment. You will also familiarize with different aspects of trading.
4. Offers a variety of news feeds
Fundamental factors do change every time in the forex market and thus a good trader should always have the latest news on the market performance. Amazingly, Forex demo account provides a range of news feed from professional sites that include Reuters, Associated Press and Bloomberg.Access to such sites improves your trading techniques before venturing into the live accounts.
5. Networking with different Brokers
Demo account gives you an opportunity to interact and meet different brokers. You can test as many top rated forex brokers as you wish.
It is advisable that while in Demo account, try to find a broker whom you will be with in the live accounts so that Despite the new factors such as spreads/swaps and order levels in the live account, the trading condition will remain the same as you will be familiar with your broker.
In summary, the free Demo accounts in the Forex offer a good chance for the new traders to test their skills. You can make mistakes but your money will not be lost.
Traders who begin from the Demo Account will always perform execellently once in the market.