When getting started trading in Forex trading, many traders struggle with learning how to use the online platform, what strategies to use, and how to take advantage of the tools at their disposal.
That’s why using a Forex demo account can be not only beneficial but crucial to achieving the success traders are looking for when choosing the currency exchange market to invest their money. What is more, the Forex market is not only the largest but also the most liquid one in the world. This means a lot more opportunities to make a considerable income, but also a higher risk.
Using a demo account to learn how to reduce the risk or keep it manageable, as well as learning what strategies are best suited for the trader’s investing style, is the best and wiser first move all Forex traders can make.
We are going to check out the different Forex brokers that offer the best demo accounts, as well as discuss the different ways in which traders can take advantage of the demo account to make sure they become successful Forex traders.
Brokers that offer a free demo account
There are many reasons why traders want a demo account. They may want to check the seriousness of the broker, learn to use the online platform or even experiment with Forex trading strategies or maybe test their own.
There is a huge value in using a demo account correctly. Wannabe traders can learn the basics, have a feeling for how the market works, learn how to use leverage, and put to test their investing plans.
Without a doubt, a demo account could be considered an important step in the education of anyone interested in achieving success as a Forex trader.
The following are the best Forex broker that offers a demo account, as well as some of their best features and offers.
Forex.com is one of the best Forex brokers in the market. They offer a demo account fully functional that allows prospective Forex traders to practice exchanging currency with more than 80 currency pairs.
Forex.com also offers its services to residents in the US which guarantees a higher level of security since they comply with the American regulations, which are among the strictest in the whole world.
The demo account allows traders to try out automatizing strategies and create investing plans.
Forex.com has an excellent and long reputation that proves their excellence as Forex brokers. It is considered one of the best brokers serving all kinds of trades, with fast execution and lower than average costs.
eToro has established itself as one of the most popular brokers overall. They offer access to the Forex market with a variety of currency pairs.
But what makes eToro particularly special is they are the number one social trading broker. This means that newer traders can learn from the experience and movements of more experienced traders.
This broker has worked into creating a strong reputation as the best choice for beginner traders thanks to their tools and features that turned them into a good choice for social trading and also for those interested in cryptocurrencies.
eToro offers a set of intuitive platforms to let traders-to-be practice different operations, as well as have access to apps that make Forex trading easy and accessible. They have also mobile apps, making trading an activity that can be done from anywhere.
It’s worth mentioning that eToro is available to US residents of most states. eToro offers more than 2300 assets to trade in.
AvaTrade has a very special feature for their demo account, which allows traders to use up to 100.000 dollars in fake money to practice Forex trading online.
This allows for a much longer and proficient trading experience before getting into real Forex trading experience.
This alone makes AvaTrade one of the most interesting options as a Forex broker. They also have available a variety of trading platforms, making it all more personalized, and allowing users to choose whatever option works better for them.
This is recognized as one of the best brokers for those looking for ease of access.
They offer a variety of platforms and apps, making it easy for users to choose whatever option suits them better.
For those traders looking for easy options and intuitive tools, easyMarkets is a good option.
This is another very well-respected broker with a long reputation as one of the best CFD providers.
They offer more than 1000 assets to trade in, including a diversity of currency pairs, cryptocurrency, and stocks.
Their demo count is very intuitive and very easy to use. This particular broker offers unlimited time for users to use the demo account. This potentially increases the chances Forex brokers have to make a profit in the long term.
On the downside, Plus500 is not available to US residents.
Table of contents
- How to use a Forex demo account?
- How to choose a Forex broker?
- Forex demo account and its importance to achieving success on Forex trading
- Forex trading strategies
How to use a Forex demo account?
Opening a demo account can be the right first step into choosing the right broker. Once all other considerations have been determined, like security, regulations, costs, initial deposits, withdrawals, and features and tools the broker offers, it’s time to narrow down the pool of possible Forex brokers you are interested in. Testing out their demo account may be the last detail that makes you decide.
A demo account is also a great opportunity to see how intuitive and user-friendly the online platform is.
Choosing the perfect broker is the most important choice every trader must make. And a demo account is a great way to test out the broker and see if they are a good fit for your trading style and investing needs.
How to choose a Forex broker?
There are a few aspects that all brokers must keep in mind in order to choose the brokers that best adjust to their trading experience and level of expertise.
The first step is checking out the regulations the brokers abide by. In each country, this may be different meaning, especially when it comes to Forex. A regulatory agency overseeing the brokers’ activities means more security for the personal information of traders, as well as safety for their money.
Another important aspect to consider when choosing a broker is the costs. In Forex, we talk mostly about spreads. The widest the spreads, the highest the cost that a transaction will be.
That is why many traders prefer going to the brokers with the lowest spreads. And there is a bit of competition, so there are quite a few favorable options in the market for those looking to engage the services of a new broker.
Another aspect to look into, though there are surely more based on the priorities of each trader, is the online platform. And here is where the demo account plays a fundamental role in helping traders learn how to use it, as well as testing out new strategies in real life but without having to risk your own money.
Finally, there is their customer service. For some traders, the quality of the support they receive and their availability is a top priority when choosing a broker.
Make sure the broker of your choice offers a variety of means to contact them, like email, chat, and phone number, but also that their working hours are suitable for your trading style and the hours you will dedicate to trading.
Forex demo account and its importance to achieving success on Forex trading
We have already given you a peek into why a demo account can have a huge value to anyone getting started in the world of Forex trading.
First of all, there is the fact that newer traders need to learn how a platform works, and even if they are intuitive and easy to manage, there is always a period necessary to get used to them. The more prepared traders are when starting to invest their own money, the better.
Another good reason that makes demo account valuable is the fact that allows traders to practice their investment strategies in real-life market conditions, turning into a very useful educational tool.
Demo accounts offer a specific amount of fake money for traders to use as if they were making real trades in the Forex market.
Traders should always use this time to become familiar with how the market works and reacts. Knowledge and experience will make for higher chances of success in the future.
Most demo accounts are good for a month, but some may be for longer or shorter periods. This limitation may sound random, but the truth is that brokers want you to eventually get started investing your real money and while a practice period is useful and valuable, traders should give that first step into the Forex market sooner rather than later.
Forex trading strategies
A trading strategy is a system used by a trader to determine when to buy or sell a currency pair to make the best possible profit.
Forex trading strategies are based on market reactions, international events, and financial news. While there are many strategies that traders can pick up and experiment with. However, ideally in order to be successful and make Forex trading into a profitable activity.
These are some of the most common strategies we find in Forex trading. While they are popular, they may not be the best choice for you. Traders should experiment with them while using the demo account. When investing your real money, make sure you understand the ins and out of the strategy to perfection.
- Forex Scalping Strategy
- Trend Trading Strategy
- Range Trading Strategy
- Carry Trade Strategy
- Position Trading
- Day Trading Strategy
- Swing Trading
All these strategies have different pros and cons, and they may not be suited for all kinds of traders. However, they represent an interesting starting point and may help beginner traders to learn about the Forex market and what their own investing style is.
Strategies can be adapted to different trading needs. In some cases, they can be automatized, but when traders have some more time, they may try out manual strategies that allow for more control.
The best thing traders can do is start with simple strategies, test them out in the demo account, and what is even more important is sticking to them.
Eventually, traders will be able to develop their personalized Forex trading strategy. To do this they should follow the next steps.
- Research the market. The more familiar you are with a market, and with the particular currency pair you are looking into trading, the more chances to make it work in your favor.
- Entry and exit points. Traders should be aware of the signs that indicate possible entry and exit points. This will help develop a strategy where they take advantage of the market changes.
- Making a plan. Traders should not only develop a strategy but must also stick to it if they want to achieve their investing goals. Using losses as a learning tool to adjust their strategies is a must too.
Traders should be prepared to change strategies. There are several reasons to do so.
First of all, traders may want to keep risk under control and their strategy is not working to do so. In Forex the risk is quite high, and traders should use tools like leverage with care if they don’t want to lose it all. Other tools, like stop losses, can help make sure the risk is manageable.
Another good reason to change strategies is significant changes in the market conditions. While some strategies may work under certain market conditions if the bases change they may not be as effective.
Finally, it just may not be the right strategy for a particular trader. There is no one solution for all, and while the best time to experiment is using the demo account, traders may become aware of a strategy not being suited for them on the go.