What Is Forex Demo Account? Best Forex Demo Account For Beginners
Forex demo account helps traders to trade with virtual money without investing real money.
Moreover, trading with a demo account is free of risk, because you don’t need to put your real money in the demo account.
A demo account is free for traders because most of the traders want to know everything about the Forex trading before trade in real. So, a forex demo account will help traders to know about ins and out of Forex trading.
Suppose, you are a trader and you want to know about the Forex trading deeply.
There are so many educational blogs and articles, which will give you a clear concept of Forex trading.
However, there is a huge difference between practical learning and theoretical learning.
So, a demo account will help you to understand currency trading in a practical way. It is possible to practice trading strategies and analyze market conditions.
In this article, we will cover some topics related to the Forex demo account.
We will also mention some tips for demo traders and put enough information about opening an account.
“Trading has never been so easy”
A demo account will give you a risk-free trading experience. You should continue demo trade until you make yourself perfect in this field.
Let’s start our word journey.
What Is A Demo Account
A demo account is an account offers by almost all trading brokers to practice trading. Apart from the risk, there are no other differences available in a demo account.
As we mentioned before that the trading account is full of virtual money. So, traders can execute trades without monetary risk.
The forex demo account has no time limit. However, it is not applicable to all brokers platform.
Eventually, a demo account is the best tool among all other forex tools for novice traders. But as an expert trader, you can use a practice account to work on the trading strategies.
Demo trading was started in the s when people used to trade on paper. American traders were the first, who started to use this by using high-speed internet connection.
Suppose, you wanted to analyze a strategy, which you will apply in the future to check the market condition. Here, a demo account is the only solution.
Now, let’s move to the point where you will see the process to open a demo account.
How To Open A Demo Account In Forex
Opening a demo account will give you access to trade via virtual amount.
You can explore the platform to know the broker features. In the first place, it will give you a live market experience. The different platform has different instruction for opening an account.
Some broker has their proprietary trading platform and some broker except MT4, MT5 along with WebTrader to trade assets.
Nevertheless, most of the platform will ask you for basic information of yours. Eventually, it is wise to open more than one account to compare the broker platform.
Besides, you can switch to the real account by depositing a minimum amount whenever you want. Traders do not need to verify their trading account by sending legal documents like a real account.
On the other hand, opening a Forex demo account Meta-trader4 is different. However, it will depend on a particular broker.
When To Use Demo Trading Account
Traders frequently ask this question; when to use a demo account?
There is no particular time for using a demo account.
If you are a novice, then it is mandatory to use a demo account before trading with real money.
The key feature of the account is to understand the trading platform. As a novice trader, it is really impossible to know when to trade and where to trade.
If you trade with real money without knowing when to open a trade and when to close a trade, then it will lead you a huge loss.
Real money gives you more pressure and stress. You must know how to set your take profit and stop loss.
In addition, traders can practice different trading strategies via practice account. Especially, traders who are expert in this field, consider a demo account as their loose-leaf notebook.
Once you are familiar with Forex trading, then you can trade with a live account.
But, trading with a practice account for too long is dangerous for traders.
Advantages Of A Demo Account
There is nothing called the best Forex demo account.
After executing trades through the practice account, you can invest money to a real account.
However, we recommend traders not to invest more than $10. Never stop trading with Forex demo. It will develop your trading skills as well as trading knowledge.
Here are the 17 advantages of Forex demo account which are listed below:
- A demo account will help you to understand the platform.
- Traders will learn how to place stop order and where to place a stop order.
- Learn how to use different Forex indicators
- You can develop your trading ideas
- Understand the Bid and Ask price
- Learn how to use moving averages
- Practice different trading strategies
- Risk-free trading platform
- Real-time market data
- You can access the different news feed to know the market news
- An idea of different trading time frames
- You will understand how price moves.
- Learn how to earn a trading profit.
- Learn how to suffer a trading loss.
- Are you OK with an overnight position or not.
- Forex trading price behavior.
- How do Forex market news impact in price movement?
Apart from these, there are so many advantages of a demo account. Demo accounts are aimed to help people for trading more smoothly with Forex.
Why Free Demo Trading Account Is Harmful
The biggest problem to trade with demo account too long is that traders develop some undisciplined behavior in their trading method.
You will not look after your mistakes. On the other hand, you will fully dependent on a demo Forex account.
Remember, you are dealing with virtual money which has no tangible value. It is hard to change bad trading pattern once you get used to with it.
On the other hand, usage of margin is not applicable for demo traders. Although this may be true, demo trading is not a complete waste.
Except for the risk level, you will get all functions similar to the live account. We have mentioned the advantages of a demo account.
So far it is noticeable that the only difference between a real account and a demo account is money.
However, there are so many differences between a real and a practice account. We have listed those differences below.
Difference Between Forex Demo And Real Account
A demo account is not representing reality. There are two major differences between a demo and a real account.
First one is execution-related and another is trading related.
Here are some other differences which we listed below:
- Emotions are different between the two accounts.
- There is no re-quoted price for demo traders.
- Traders will not able to access the full trading platform
- Sometimes traders unable to trade with all assets.
- Trading risk is not the same
- Unable to follow their trading plan in a demo account. As a result, traders develop a bad disciplined trading practice.
- The liquidity level is different in a live account.
- In the case of a live account, demo account has static spread.
- The risk-free trading environment will give you zero trading pressure.
The minimum amount of funded money varies from broker to broker.
Our recommendation, please deposit the same amount of money which you are planning to deposit in your real account.
There are also psychological differences between a Demo account and Live trading account.
Understanding the trading psychology is important to avoid the risk.
Psychological Differences In A Demo Account
Every trader has the same feeling to lose money while they start trading with real money.
Furthermore, traders will capable to trade with a real account when they are ready to take a risk.
It is not easy for traders to see his hard earned money is going in vain. Surely, you will find a difference if you compare your first time trading experience with a demo account.
During the trading time, you will find butterflies in your tummy.
Never mind, I am just joking.
Continuously trading with a live account, you will find it easy. It will also build up your trading skills.
Remember, the virtual money will be back after losing trade in a demo account.
There is no risk involved in trading on a demo. Proper risk management while trading currencies is only acceptable for a live account.
Moreover, it is not possible to ignore losses and start over without damage.
Over-trading is the biggest mistake for Forex traders. Lack of psychological preparation will lead you to do over trade.
Traders invested amount based on emotion and come up with a huge loss.
You might see yourself committing sins while trading with real money like moving your stop losses, early cutting off winning the trade, and also revenge trading.
Continuously winning through a demo account will make you overconfident. Overconfident traders forget about trading discipline and proper trade execution.
Avoid trading with over-leverage. A trading plan can also help you to control your trading psychology.
Success from demo trading does not mean that you will get profitable after trading with a live account.
It is challenging for you to hold your emotion and stay focused while trading currencies. Remember that a solid mindset will help you to trade well. So, make your Forex concept strong as much as you can.
How To Deal With These Differences
If you want to earn profit from trading then you have to deal with these differences.
At the beginning of your trading, do not focus on profit only. Experts always focus on the trading process.
Make a plan for your daily trade. It is better to have a weekly trading plan.
“A trading plan is just words until you act on it.”
So, review your plan at least one time before trading either this is right or wrong.
Proper risk management will help you from losing a trade. It will also help you to concentrate on your trading, and remove your trading pressure.
Another good way to be a better trader is to repeat the previous trading history.
So, maintaining a proper trading journal will help you to see where to improve and where to not.
You can keep a track of your all winning trade and its plan. In currency trading, keeping success history is a good habit.
How To Trade With A Live Account
You need to forget about emotion while trading with a real account. However, it is a little bit difficult to make a side of our trading emotions.
There are some tricks which will help you to trade with actual money.
- Accept your losses. As a novice trader, better not to fight for profits. There are so many traders who are still losing their trade. To be an expert you have to know proper money management.
- Take your trade as a game. Plan and apply your strategies. You might have earned a huge profit in a demo account as there weren’t any emotions involved.
- Trade exactly that amount which you can bear losses.
- Ask yourself before opening your trading order “Are you OK to bear losses or not?” If the answer is Yes, then continue your trading.
- Know actually what are you going to do before wasting your hard-earned money. Pre-planned your trade before opening a position.
- Trade like a sniper. You have to research the marketplace before trading.
- Maintain your professional trading mindset.
Demo Account Trading Time
As we mentioned before, a Forex demo account is designed for novice traders who are actually not familiar with Forex trading.
If you want to know more details on currency trading, then you can read our article What is forex trading.
It is a complete guide for forex traders, who are new and want to learn more about currency trading.
But, experts are also using a demo account when they want to apply a new trading strategy.
There is no time limit in a demo account. You can practice trading anytime from anywhere. But, some broker’s demo account expires within days. On the other hand, some broker will keep your account active until you are ready to trade with real one.
The major advantage of a demo account is its risk-free feature.
Moreover, a demo account gives the trader an opportunity to apply strategies. You can develop your trading skills without any time limit.
Remember, each day will count before hitting in the real trading world.
You can also open multiple positions at the same time by choosing different currency pairs. Better to practice your trading with those accounts, which will not expire.
Demo Trading App
You will find a demo trading app to practice trading in a different trading platform. As I have noted, it is possible to get a free demo account from your broker.
Moreover, you will find trading application depending on your mobile device like Android and iOS.
All major brokers have mobile trading apps. Simply, you have to download it from the Google play store or Apple store.
Via mobile demo trading app, you can practice your trade with your favorite currency pairs at any time and anywhere. Eventually, you can discover the world in the palm of your hand.
The trading platform is as same as the desktop device. The major advantage is that you can execute a trade via online platform instantly from anywhere.
You can open a free forex demo account in the meta trader 4 mobile application.
Tips For Forex Traders
It is difficult to find out the best trading tips from many. Below, we have shared 11 trading tips with you.
As I have noted, Forex trading tips will work as per your trading knowledge. Depending on your trading pattern, your trading tricks will work.
- Know your vision for trading.
- Build your trading strategies.
- Become a great loser.
- Find your right trading methodology.
- Accept the right trading style, which goes with you perfectly.
- Spend enough time to analyze market strategies.
- Waiting for the right trade.
- Keeps a record of your best trading.
- Choose a reputed broker.
- Be a great student in the trading market.
- Know when to stop trading.
Finally, we have to drag a beautiful ending today. We almost tried to cover all points which are related to the demo account.
It is not too much complicated. To be a successful trader you have to improve your trading process and create a good habit.
Experiencing different trading environment is also helpful for novice traders.
Follow these tips to make your trading success and till then be with us to know more details about Forex Trading.
“Having a trading discipline is the beginning, keeping discipline is the processing, and staying discipline is the success.”