For every experienced and successful forex trader, there is a plethora of new and/or inexperienced would-be traders out there. We strongly recommend, especially for the novice trader, that you start by using a demo account.
Simply because it eases you into the world of real forex trading without financial risk to yourself, because you are, in effect, using an entirely virtual money account.
With a demo account it does not matter to you nor anyone else if you happen to lose a fortune on your first trade. You can always open another demo account or ask your broker to top up the accounnt.
Moreover, it gives you time (over how ever long-a-period you feel you need) time to play with all the brokers facilities and become orientated as to how online forex trading really works and can, in fact, work for you – to your advantage.
A demo also gives you time to realise what type of a trader you are and allows you to develop your own trading strategy. In a nutshell, it gives you the time to develop your wings.
Finally, whether or not one is seasoned trader, when using a new Forex site, for the first time, it is our strong recommendation that one should always become acquainted with how each and every Forex site works, by using the site’s demo trading platform – in order to understand exactly how the site’s software works.
What’s the difference?
Simply put, apart from (as mentioned above) you are using virtual money the difference is virtually unnoticeable – all the features are exactly the same, as in the real account.
The only difference being is that your PC is your dealer, which will always open or close your positions automatically – in accordance with the current market rates. In real trading, it is done manually, by one of our traders.
- In demo trading, with the benefit of no risk, should you use up your initial credit, you can easily top this up. Simply go to our user zone with the help of your account and password (Section “Demo Account”).
- There are almost no delays, between your inquiry and offer of the exchange to open or close a position. However, in real trading there could be delays of 30-40 seconds.
- Rubbish quotes (these are single bounces for more than 30 or more pips from current quotes) are accepted by the PC as real ones on a demo account – participating in the quote system. In a live account they are ignored.
- With a real account, it could happen that there is market movement, whilst you are in the middle of closing your position, in line with a certain rate. Should this be the case, your order might not be fulfilled. Hence you will be in receipt of an order to close the position at another (current) market rate.
- We believe that there are or can differences, in psychological make up, when a player is using virtual money and real money. It is important not to get carried away, when using a demo account, and not to forget that you are there to study and make good on your real objective – of preparing for the day, when you decide you want to try and spread your wings and fly and become a fully-fledged trader; with the objective of using real (your) money, with the sole objective of making more money, via way of return.
- You should be aware of the fact that the market is always moving and sometimes very quickly. An exchange rate are by nature, very changeable and subject to world events and breaking news and it is possible for rates to leap either up or down by several pips on breaking news stories. The speed at which you enter your order into the system may influence the rate according to which you can enter the market. This is one of the many factors that influence the results of your trading.
We strongly advice that you learn, develop and trade the market using a planned forex trading strategy- one that works the best for you.
Remember, there is no one plan which fits all. We are all individuals, and what might work rather well for one person, does not mean that it will work well with you. You should also consider what are the up’s and downs of the loss you can stand.
In essence we cannot stress enough, the importance of having a plan and following that plan. This does, however, call for a rather ruthless approach and it is all too easy, for the human emotion to kick in.
However, the other thing is that with real trading, you are using real money and it could be those very human emotions, which could also stop you from making a good kill. Therefore you need to be able to temper your emotions with the cold realisation of the hard facts of what all the indicators/signals are telling you.
Our demo version will give you all the tools and the time necessary, preparing you for the day when you will be ready to take your first flight, into the real world of Forex.
We wish you good luck. As usual, you should always be aware that there is the potential for loss as well as very attractive gain.