Real foreign exchange training usually involves signing up for a $100,000 forex demo account. Do not fret – it will not cost you that much in order to open such an account because the $100,000 it contains is virtual cash or play money that you will only use for simulated transactions. All you have to do is to open a simulation account among the wide array of brokers who are serving the foreign exchange industry. Commonly, the practice accounts are designed by brokers with the aim of giving their trading software or platform a test run.
For beginner, using a $100,000 forex demo account is a practical way of learning the basics of foreign exchange trading without fully succumbing to the risks like losing money due to faulty strategies, among other things. It is good that a forex demo account uses fake money; thus, you will not lose money from faulty deals. However, you are not going to earn anything either, no matter how well you play your cards. With a demo account, you can practice your trading skill in real time without risking any real money. Any forex trading training is rendered incomplete without opening a demo account.
Usually, a $100,000 forex demo account expires within a definite period of time. Many versions of practice or demonstration accounts usually close within thirty days. If you do not find an entire month as enough time to practice your skills and hone your capabilities as a forex trader, here’s the tip: find another broker account who offers training via a demo account. With this, you will have continued training and at the same time, a chance to see and experience another trading platform.
Any foreign exchange expert will tell you that there are three phases before becoming a full-fledged foreign exchange trader. Specifically, these are:
- The theoretical part. In this phase, you should do everything you can to gather knowledge about the foreign exchange trading. You can learn the principles from books, the internet, tutorials, or by watching the news on the television. In the theoretical part, it is difficult to make sense out of the data that you are receiving.
- Opening a $100,000 forex demo account. In this phase, every single aspect – the market conditions, the time factor and even the trading platform – is real except the money that you are using. This is considered as you personal training process where in you can learn the ropes of foreign exchange trading. You can apply what you have learned in the theoretical part, refine your techniques and strategies and fail without losing money.
- Open a live foreign exchange trading account. You can open this only when you are ready, when you have gained enough confidence, and when you have finally found a trader’s platform that you are comfortable with. Do not open one unless you are 100 percent sure that you can handle the pressures that the real trading can bring.
There are brokers who hasten the process of transition by offering a low-risk trading account. This is their way of ushering their trainee traders out of the $100,000 forex demo account and in leading them to a live account that offers low risk (limited damage) trading account. In a sense, even the low risk account is actually a demo account because the real dangers are limited up to a certain degree.