A forex demo account is a fantastic way to practice trading in the market without the stress of losing any money. You can get a free forex demo account from most any online broker. A forex demo account is usually given by brokerage firms free of charge to prospective traders as a marketing strategy. The main aim of the demo account is to encourage the prospective trader to open a live trading account with the firm.
Reading books and taking online training can teach you the basics, but the best way to learn to trade currency is hands-on experience. Forex practice accounts make it easier to experience a forex trade under real market conditions. A practice account will use live prices, charts, and financial news. The trading platform should also be identical to one used for live accounts.
A demo account should be free. If you find a broker trying to charge you to open a demo account or asking for a deposit, look for another broker. There are plenty of legitimate forex brokers that would be happy to provide you a free account.
Spreads also vary with the account types. A mini account for example, typically charges a wider spread than a standard account. Spread is usually in the range of 1-3 pips, depending on the broker and the currency pair, but it can vary at times of volatility. Using a demo account will allow you to see how much of a spread the broker is making on each trade.
Even after, you feel confident enough to open a live account and trade with real money, you can still use your demo account. Many experienced traders still test their strategies using a demo account.
The forex demo account should be a valuable tool to reduce the risk of losing your money. The forex market is extremely risky, and you should never trade until you have the experience to make educated orders.
Losses are a common part of investing because nobody is right 100% of the time. Losses are part of the learning process and all traders experience them. It can get even more painful if a trader enters the game with a false sense of confidence.
Choosing the best software for trading forex is essential. Find out based on your evaluation of demo accounts, which broker and trading platform are best suited for your trading system and profit goals.