Online Forex demo accounts are available to anyone with access to the internet. Simply put, these accounts serve as a broker for individuals who want to enter the world of foreign exchange trading, albeit the same is only available for a limited time. After the expiration of the demo account the individual can either avail of the paid service or move on to another demo account. This article will discuss basic concepts relevant to Forex demo accounts. – (Check out all different real forex trading account types from FXCC)
What is the Difference Between a Forex Demo Account and a Forex Simulator?
The former describes a tool that can be used to actually trade in the foreign exchange market or used as a practice account to simulate live trading as a means to further enhance the education, training, and experience of a fledgling trader. The later simply refers to an account used to simulate trades using selected data or as close to real time data as possible. Simply the former may include the latter but the latter only forms part of the former.
How can I use a Demo Account as a Training Tool?
Simple, you use the same as a simulator. For example, one important aspect of trading is reading the indicators correctly to determine the movement of the market. What you do is select a particular historical data and then read the same. Determine what type of indicators you need and the movement of the market based on the same. Then you formulate a strategy to take advantage of the data. Now you read thru the events that transpired based on that data. You can establish how good you are as a trader by determining if:
- Your reading of the market was correct;
- You made use of the right indicators;
- Your strategy is relevant to and conducive for profit.
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Can I Just Jump from One Forex Demo Account to the Next?
Yes you can. This is actually done by beginners or those who merely moonlight as a Forex trader. However for more serious traders signing up for one or even a couple of online Forex accounts is the norm. This is because different providers do not have the same data and interface. This means jumping form one account to the next can be viewed as a waste of time. This may save a few hundred dollars but it will cost you in terms of opportunity loss.
How Do I Know if I am Not Yet Ready for a Demo Account?
Simple. If you sign up for a demo account and find yourself confused as to what a trading platform is, what is a yield, what is a spread, what is MT4 or MT5 then you have no business with a trading account. What you need is basic Forex education.
What is the Best Brand of Forex Demo Account?
There are several leaders in this field but there is no one in particular provider that can be said to be the best. This is because different traders have different requirements and preferences. As long as you sign up for a legitimate provider then there really is no problem regarding the same.
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