Aside from all the perks and advantages that you can derive from opening a Forex practice account, you should give it a try because it is free. Now, you do not have to spend much just to get a feel of the experience and to test you strategies. Years back, you have to spend real money just to gain experience from the forex trading market. Now, you can have first-hand experience at the real trading terminal without using real money. The following are just some of the basic perks that you can enjoy upon opening a free practice account:
- You will have a complete access to several tools for analysis that is useful in predicting forex market trends.
- You can have a hands-on experience to test the strategies and techniques that you have learned from theory in the real market.
- You will have the capability to close all of the open positions, even those that are locked.
- You can familiarize yourself of the basic interface of the trading terminal. You will also acquire knowledge of the basics.
There are no real risks involved should you decide to open a free Forex practice account. You might be thinking that you have limited capabilities as a practice trader – but the truth is that your practice account has the same degree of functionality – just like any normal account.
The transition from being a beginner is up to the trader. There are no particular requirements; you can readily jump to the professional trader status as soon as you feel that you are ready. But of course, you have to do some deal of preparations so that you will understand one of the most important concepts that can actually save your life in the long run – forex trading risk management.
Perhaps, risk management is the most important concepts that you will learn while trying out your Forex practice account. The wise management of risk sets professionals apart from beginners. The practice account is not only about getting the feel of the actual situation; it also gives you an established venue to watch out for your personal emotions. If you get too affected by it, then you should learn how to control. This way, you will make real profits and veer away from losses in the long run. In order to develop your capability to manage risks, the following steps are recommended:
- Request your forex brokerage to reduce the account balance of your Forex practice account. Usually, they give a default amount of USD 50,000 worth of play money. In order to get a more realistic feel, ask them to give you a more reasonable amount to play with – USD 5,000 will be perfect.
- The level of leverage should be reduced. Make 20:1 your maximum leverage. This way, you will be force to be more realistic in terms of sizing up your trade and in defining your stops and go’s.
- Lastly, do not take your play money for granted. Treat it like real money. It will be difficult for you to adjust if you see your Forex practice account as a mere gaming venue.
As they all say, if you want to be close to being the best forex trader, you will need some practice. Opening your own practice account will be one of the best ways of gaining the much-needed experience that is necessary to survive the harsh tides of forex trading market.