A demo account is a trading simulator on the market with viral funds, which allows traders to test various functions on the trading terminal. At the same time, all technical analysis tools and analyst support are available.
Such Forex accounts are used by newbie traders, for example, to learn how to work with the terminal and get an idea of trading without risking real capital. For experienced ones, this is a great opportunity to try out a new strategy.
By creating a demo account, the user can choose the amount he needs to trade, the leverage and type of account. If necessary, you can create several demo accounts and at each test the performance of strategies individually. Such a separation will help to more fully identify the advantages and disadvantages of each of them.
Benefits of a Demo Account
- Market research and analysis
Working on demo accounts in markets such as cryptocurrency, stocks, binary options or Forex, you can find out which assets are more interesting for you to trade with and which market suits you best. You need to understand that trading on the platforms with shares of companies is different from trading on the Forex market.
- Gain experience
Practice in opening and closing deals, placing StopLoss and TakeProfit is necessary for every newbie trader.
- Graphic display of the market
In the movement of prices there is a pattern. The ability to read charts will help determine the direction of the trend and qualitatively predict the further behavior of the price.
- Technical analysis
Be sure to try the maximum possible of them and choose the most convenient for yourself. It is necessary to clearly understand and use all the features provided by the terminal.
- No risk
The deposit is virtual on a demo account, so you won’t have real financial losses.
- Testing the broker and its terminal
This is a very good opportunity to check the operation of the terminal and evaluate the broker itself, its level of reliability and trading conditions.
- Work on your mistakes
The history of your transactions is available on the demo account, you can always look at performed orders and find out where the mistakes were made or where everything was done correctly. This will help you avoid unnecessary losses and get the highest possible profit when working with a real deposit.
- Work with new strategies
On a demo account, not only beginners try their strategies, but also experienced traders. Mistakes that were identified during such testing won’t affect the amount on your deposit.
Opening a demo account
Almost every broker offers traders the opportunity to create demo accounts. Their number can be any. After registering on the site, the user selects a live account or demo. It indicates how much he needs to have, type of account and leverage. After registration, a username and password will come to your mail and you can start trading.
A demo account is a good tool for every trader and the opportunity to plunge into the world of trading without risking your money. After working on demo accounts, a novice trader already understands how you can make money in the Forex market, and what decisions you need to refuse. Also, he will learn to apply the trading strategy in practice, use indicators and other tools.
A demo account does not carry any risks, so when switching to real trading, do not forget about money management and do not get carried away by randomly opening transactions in pursuit of profit.