When and How to Use a Forex Demo Account

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When and How to Use a Forex Demo Account

Though being a useful helper, forex demo accounts can also cause harm. Today, I’ll show you what is the prime purpose of the demo account, how to use it and when to migrate from a demo account to a live account. Let’s get started.

What is a demo account

These days, a demo account is being offered by almost every forex broker. Demo accounts are virtual accounts with virtual money which is connected to a real trading platform, receiving real data on the market.

That means you can open and close trades and it won’t cost you a single dollar. Even though, your trading commands are not really sent to the market, you will not recognize any difference.

Demo accounts realistically simulate real trading. At first sight, the only difference is money – real vs. virtual. However, if you look at the issue in more detail, you will find out some more.

When to use demo account

Using a demo account comes handy in two situations. First, when you are a beginner. If you are not familiar with forex trading you should start with a demo account. You can test the trading platform and learn the basics of trading. The most popular trading platform is Meta Trader 4.

The key is to be able to control the trading platform. It should never happen that you trade with real money without knowing when and how to open or close a trade etc. Because real money generates more stress and pressure, you must always exactly know how to open and close a trade, how to set your take profit and stop loss. With a live account, all the steps must be done quickly and without a mistake. There’s no time to hesitate and look where to click and what to do…

Once you become familiar with the trading platform and have at least the basic grasp of trading (trading volumes, tick/pip, e forex trading strategy etc.) stop using your demo account and progress to real trading.

It should be emphasized that forex is affordable to everyone. Real micro forex account is something even students can afford. Anyway, all traders should take their first steps with small amounts of money.

Because demo accounts can’t teach you the psychological aspects of the business and because trading with a demo account for too long makes no sense. After about a week or two of using a demo account, you should migrate to a live or real trading account. If you suffer a loss, it will not be any disaster, perhaps a few dozens of dollars. The experience and lessons learned will give you more than a year of trading with a demo account.

Above we mentioned two situations in which demo accounts can be beneficial: One was the beginner stage. The second one is the testing of new trading strategies and new markets i.e. currencies, commodities etc. As an experienced forex trader, you will surely have at least one demo account as a backup.

Differences between demo and real accounts

So far, it has seemed that the only difference between a demo account and a real account is money. Ideally – with a good forex broker – it is. Sometimes the demo account is optimized which in many cases is justifiable. During volatility peaks, typically following various meetings or press releases made by central banks prices tend to fluctuate. During such periods it is difficult for a broker to process a trading order, which might be delayed or rejected by a real market.

With a demo account, you will not experience this problem. The fact that in some cases your real account is slower than the demo account might be caused by some unfair practices such as a set delay on your account. With a solid licensed and regulated broker, such problems don’t exist. Therefore, it is crucial to find yourself a reliable forex broker.

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Demo accounts can help enormously and we recommend that you all use them. Nevertheless, be aware that the demo account is not a tool to be used in the long run. Even a small real account with a few dollars and the experience when using it will give you much more.

Verified brokers offering demo account

As mentioned above, demo accounts are offered by all reliable brokers. After opening the website, simply press “Open demo account“. Our list of tested brokers offering demo account includes the following:

Broker Bonus Min Deposit Payout Review Open Account
Great broker for german clients $100 * Review Trade Now!
Great social trading platform 200 USD * Review Trade Now!
FREE DEMO ACCOUNT $ 10 Up to 100 % !* Review Trade Now!
*in case of correct prediction
RISK WARNING: YOUR CAPITAL MIGHT BE AT RISK

Author

More about the author J. Pro

Unlike Stephen (the other author) I have been thinking mainly about online business lately. I wasn’t very successfull with dropshipping on Amazon and other ways of making money online, and I’d only earn a few hundreds of dollars in years. But then binary options caught my attention with it’s simplicity. Now I’m glad it did because it really is worth it. More posts by this author

One Response to “When and How to Use a Forex Demo Account”

Post a detailed video of how to use demo forex account. There is no single video on the net showing clearly about demo.

How to Use a Demo Account?

It’s not enough that you trade a demo account, you test the broker, and his capabilities, but more importantly, you need to test yourself in the process. The best attitude in trading is to seek the faults always within yourself instead of blaming anyone or anything for adverse consequences. In a similar vein, it is better use demo trading to test your compatibility and your competence with a broker’s software before making speculations about others, and what they offer.

Remember that we can never decide what the market is going to do. It will go its own way, that’s certain, and for sure. But we have complete control over what we decide with respect to the future. In that demo trading must first focus on how realistic your plans about trading and your general performance are. Can you really do as well as you always hope to do in this market? Many come to forex with unrealistic assumptions about themselves and the market, and become disappointed when those conjectures do not fit with reality. The good news is that with demo trading we can try and test all these aspects of trading, and in time gain a fair and even unbiased view of what is right or wrong about our conceptions.

In practical terms, we must make sure that we do not see demo trading as a kind of game where anything is fair game just because there’s no risk in our trading decisions. In fact, there’s a great risk in that by behaving illogically in demo-trading you will acquire meaningless expectations about real trading, which can only lead to severe distress in your account in time. Trade exactly like how you’d trade in real market conditions. Of course, it’s altogether a different matter to simulate emotions, but if you can master the technical aspect in demo trading, the odds are good that mini-account trading will take care of the emotional side of the issue as well.

Keep notes, acquire a routine, and do not use the whole capital allotted to your account in imaginary cash. You should only trade with as much money as you’d like to commit in a real market environment. Otherwise, time is wasted, and no real understanding of trading is acquired.

You can test your forex analysis and strategies while demo trading. You can check out the claims of the broker. How much of what he’s telling you is reliable? You can also define and limit your expectations, and dreams by actually testing your plans and seeing how well they fit with reality. There are so many things to do while demo trading, only your imagination, and time constrain your ability to try and test your vision of a forex career.

More on the first step: using a forex demo account for technical analysis.

About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay’s Google Profile

Demo Account

What is the difference between a demo account and a live trading account?

The primary difference between a demo account and a live trading account is that there is no capital at risk when trading in a FOREX.com demo account.

FOREX.com’s demo/practice account is a core element of our educational effort. A practice account is intended to familiarize you with the tools and features of FOREX.com’s trading platforms and to facilitate the testing of forex trading strategies in a risk-free environment using virtual funds.

Results achieved on the FOREX.com practice account are hypothetical and no representation is made that any account will or is likely to achieve actual profits or losses similar to those achieved in the practice account. Conditions in the practice account cannot always reasonably reflect all of the market conditions that may affect pricing, execution and margin requirements in a live trading environment. Margin and leverage settings by product and account may vary from time to time between your practice account and a live account due to live account settings changes imposed by FOREX.com resulting from market volatility and other factors. Rollover/financing charges are not simulated in the demo environments. The pricing available in the demo environment is the same pricing available to FOREX.com account holders. Pricing for managed accounts and accounts referred by an Introducing Broker may differ.

How long does a demo account last?

Demo accounts last for 30 days after sign up. Afterward, you will not be able to log in using the demo account credentials.

Can I renew my demo account?

Demo accounts last for 30 days after sign up. Afterward, you will not be able to log in using the demo account credentials. Demo renewals are not available at this time. If you have further questions, please contact us.

Can I open multiple demos?

You can only open one demo account of each type (i.e. FOREX.com platforms or MetaTrader) per email address.

I forgot my demo username or password. How do I retrieve them?

If you forgot your username, please contact us for assistance. If you forgot your password, please click here to reset your password.

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    Good Broker. Only For Experienced Traders!

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