Forex Brokers Demo Accounts

Posted by admin 17/02/2014 Comments are off 1019 views

Forex Brokers Demo Accounts

This article looks at using forex brokers’ demo accounts until you have the confidence to enter the live trading market.

A demo account is offered by most forex brokers.  It is an ideal opportunity for you to learn how the forex broker’s trading platform works and if you like using it.  You will learn how to enter orders, stop stops and implement your trading plan and strategy before you commence trading in the live trading environment.

Trading Platform

You will find trading platforms that are extremely basic and you will find others that offer you everything you need from relevant news to different chart types.  Your view of the trading platform will be based on what you require and the ease of use of the software.  You may not need all the built-in features of a detailed trading account for fear of becoming confused during a period when you have limited experience in the market.  You do not need to opt for a complicated system.  Your one criterion should be that the system gives you the tools to trade profitably.

Forex Brokers Order Placing

It is vital that you make use of a demo account for at least six weeks before you start trading live.  This will ensure that you have become familiar with all the features offered by the platform.  When you start placing orders, some of the platforms offered by forex brokers simply make use of a pop-up ticket, whilst others indicate your order by a mark on a chart.  The simpler to use trading platforms offer you a button where you can click on the offer part of the quote and in the event that you wish to sell, you simply click on the bid part.  Some of these platforms give you the facility to limit your orders after the appearance of the quote window, whilst others may force you into making the selection before the quote window.

The differences in method are extremely important.  If you are uncomfortable using the methods required for placement of an order, you may make mistakes which could cost you money in the long run.  Before you move on to live trading, you should try placing at least 20 demo trades on the different platforms.  This will provide you with adequate practice on the platforms for you to master the process of order entry.  Before you commence live trading, you should have answers to the following:

  • How do you place an order?
  • How do you set a stop?
  • You should know if you are allowed to place a stop and limit order at the point of entry of your order
  • Are the spreads fixed or variable?
  • Which lot sizes are available for trade?
  • Are the different lot sizes interchangeable?
  • Can you contact the dealing room by telephone if you lose internet connection?

Once you know how the trading platform functions, you should continue with the use of the demo account to try out different trades.  You should try differing sizes and styles as this will help you determine your trading personality and style.  You will have the opportunity to determine if you are a short-term trader or not.

You should always bear in mind that although demo account trading will give you the confidence you need in the market, you are not working with real money.

 

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