Want to get started with Forex trading without risking your own money? Not a problem. You can just open a free demo account to get a feel for how it works and develop some confidence that yes, Forex trading really is something you can do. Read on to find out how to get the most from your demo account.
What exactly is a free Forex demo account?
A free demo Forex account is just what you might think it is. You basically trade with “play” money. It works much like it would on online casino sites, where you can play in two modes, the free (or fun) mode, and the “real money” mode. Of course, the site owners are hoping that winning with your fun money will get you so excited and confident that you’ll want to start playing for real.
The same is true for free demo Forex accounts. That’s why brokers offer them. They hope that once you see how much money you can make, you’ll sign up for the real deal. And since you have learned trading on their platform, you’re very likely to stay with them since it can be a pain to have to learn a new platform.
For beginning Forex traders, those free demo accounts can be extremely valuable. They offer an opportunity to learn how to trade without risking their money. Of course, there’s also a dark side…
You need to make sure that you realize the difference between fake money and real money. You see, if you’re dealing with fake money, it’s not a problem to take big risks. You won’t lose a dime. However, if it’s your real money, you can lose your shirt.
But let’s focus on the positive and look at how you can get the most out of your free account, especially if you’re a beginner.
1) Practice what you’ve learned
If you’re serious about trading Forex, you should learn how it works and study up. But theory can differ quite a bit from practice. So what you’ve learned in the book may or may not work, or it may take some practice to make it work. Fortunately, you can do all the practicing you want in your demo account until you feel that you’ve got it down.
2) Develop your own trading system
You can also use your demo account to develop and refine your trading system. Without risking your own money, you can safely try out a new system, or one you want to refine, and see how it works. Since sticking with a winning system is so important, having a demo account can also help you practice being consistent.
3) Try out a new robot
Are you eyeing a new robot. It promises you stunning returns, but you’re skeptical. Not a problem. Just use it in a demo account first to see how it’s doing before you risk your own money.
Here’s something you may want to keep in mind though: be sure to “play” with same parameters and account size that you would plan to use in real trading.
4) Try out a new trading platform
Brokers don’t all use the same trading platform and with a demo account, you can try out a new one and learn how to use it without risking your own money.
As you can see, a demo account has indeed many benefits and can be a great tool for a beginning traders and more advanced traders alike. Just be sure to watch out once you switch over from your demo forex trading account to the real deal and remember that you’re now putting your own money at risk.