Forex trading evokes strong feelings among the enthusiasts of leveraged financial instruments and the market itself is often referred to as “difficult to tame”.
On the one hand, it creates an opportunity to achieve financial independence, and on the other, it entails the risk of losing savings held in an investment account. Currently, dozens of brokers offer forex trading and advertise their services on hundreds of websites. A forex broker should be properly supervised, have a transparent business model and meet a number of other individual criteria set by the trader. As the future investor needs to verify the reliability of a given company, opening a real account with a forex broker takes more time than you would initially expect. A free demo account, which can be set up by virtually any forex broker, allows you to quickly test the functionality of the platform.
A demo account uses virtual funds in real market conditions which allows a currency speculator to test a whole range of trading strategies. Every forex strategy has its own key principles, for example regarding the instrument it is applied to, methodology for entering and exiting a transaction and its term. Some of them are designed to make trades at short intervals, such as scalping, while others involve holding positions for months. A novice trader who takes their first steps in the stock market speculation treats online trading as a way to earn a lot of money in a short period of time. At first, the trader does not attach importance, for example, to the issue of matching the trading system with their temper and character. This is a clear mistake, as it allows the trader to avoid a number of future mistakes made by the speculator which stem from an inadequately selected strategy. It is important that at the very beginning of their investment adventure the trader knows how they want to develop their craft of speculation. A demo account allows you to trade in real conditions without the risk of losing your capital. It is an excellent environment for testing different approaches to currency trading and it takes a few seconds to set up (https://www.xtb.com/ar/demo-account).
The demo platform allows you to practice trading in real trading conditions
Every forex speculator adopts an individual approach to trading currency pairs. Each of them also decides when it is time for them to open a real account and prove themselves in the world of online investment. Some of the participants of the most liquid market in the world claim that trading through a demo account is a waste of time as you learn the most from the real account and true emotions it entails. These emotions arise when you put the results of your hard work at stake and are often a key element of a trader’s success or failure due to their intensity. Demo account allows you to get acquainted with the market, see how it works and which strategies and systems prove the best. Leverage, which makes forex trading extremely exciting, when used carelessly, can ruin your real account. Therefore, virtual funds made available in a demo account allow you to develop good habits of capital management. Money management combined with the psychology of trading and appropriate strategy is the core of trading success.
Another reason to test the demo account first is to be able to examine the quality and functionality of the forex broker’s trading platform. The trading platform is very often the most frequently used program of an active currency speculator, therefore the currency trader needs to understand it well in order to be able to navigate freely its environment. The trading platform of a forex broker must be fully transparent, otherwise it will prevent the speculator from succeeding. If the forex trading platform has many technical errors, it is worth detecting them in a demo account before you decide to deposit your real money.
A demo account provided by a broker allows you to get acquainted with the functionality of the forex market, the mechanisms governing it and, above all, allows you to test strategies without the risk of bankruptcy. A demo account is an excellent foretaste of trading through a real account, so it is important not only that it is fully utilised by a speculator, but also that it is solely an episode for a young trader before his success through a real account.