Forex practice or demo account is an account for simulating forex trading in a trading platform – specially designed software for executing trades. You trade under terms which are the closest to the real ones, but on virtual funds. Thus, you do not take any risks. Practice trading account is a great tool both for professionals and newbies. Most of the best forex brokers on the market offer potential investors the option of opening a demo account in order to try out their trading platform and features.
Because forex is a decentralized market in which dealers disseminate their own price feeds through proprietary trading platforms, it is crucial to learn the features and idiosyncrasies of each type of trading software before committing real funds to an account. Fortunately, forex traders can test out each platform using demo dollars. Every reputable dealer allows potential customers to download a free demo version of its software.
For novice traders, a demo trading account can supply a valuable insight into the world of forex trading. When used correctly, a demo account can be a useful training tool that will give them the necessary basic knowledge and skills that they need to get up and running. A demonstration account can be set up free of charge and only requires the potential investor to enter a few basic personal details. Access to this account enables the trader to get to grips with the trading platform without putting any of their finances at risk and allows the investor to see how to trade in real time.
Even if you feel comfortable with your knowledge of forex trading, you should first experiment with trading using a demo account that simulates trades using virtual money and allows you to test your own theories and trading strategies without actually risking any real money. By opening a risk free demo account, potential investors can build their knowledge to desired levels or test their current knowledge of trading strategies.
Transitioning from a demo account to a live trading account can be a steep learning curve, and a novice trader cannot expect to be incredibly successful immediately. It is not unusual for potential investors to have great success when using their demo account only to fail to make a profit as soon as they transition to a live account, and this is because the pressure has increased with real money on the line. One of the keys to transitioning successfully from a demonstration to a live account is to resist the urge to trade quickly and to take your time.