How to Use a Demo Account
Every Forex company will give both a live and a demo account. The live account is the original account in which traders will deposit money, trade, and earn profits. A demo account is a kind of explanation of the company’s platform, services, and overall environment which enables traders to test it before committing to an investment. It is one of the most important tools a trader will ever use.
Demo accounts are the perfect place for newcomers to practice before investing any money, and it is a good place to test out a company’s services before trading with them. There are some things to watch out for along the way so you can learn more and be better prepared to go live.
Many companies will have a specific amount of virtual money deposited into the Demo account for traders to trade with, usually, a very big amount which makes trading very comfortable, ask if you can have a specific amount of money put into the account before you start trading. The reason for that is because it really helps to trade with the same amount you are considering investing once you open a real account. With the same amount you can test the positions you can open, the leverage you will apply, etc, and have a very similar experience to the one you will have with your real account. Other details can be requested too, like the type of account, and leverage to customize it to the way you will be trading live.
Now in order to really learn you can’t just look at what you’re doing at the moment. You need to keep track of all the trades you make. Even though you are not making any real profits or losses, you can see the virtual profits and losses on the platform. This way you can look back and learn from your mistakes as well as the right choices you made to gain profits.
Through a Demo account you are trading with real timing and prices, learn how to use charts, indicators and how to watch the market. Utilizing your time and understanding market movements is key to making the right trading decisions, basically take advantage of this free time to explore the platform, different aspects of trading, and so on, go crazy it is ok you won’t be spending any money.
An important thing to take into account when you are using your demo account is the emotional aspect of risking your money which you will go through when you go live. Treat every situation as if it was real, and prepare yourself for when you will really invest money. With an all-rounded demo account experience, you can learn a lot and increase your chances for successful trading once you go live.