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A forex demo account is often the first step to embark on a trading adventure. It allows you to get acquainted with the functioning of the stock market and make the first transactions without incurring investment risk. Many people wonder where to open such an account and where to start? Is it free and will it be in your language? Therefore, it is best to start with the basics.
What is a forex demo account?
A forex demo account is an investment account where a novice trader can trade with virtual money. The selected broker may offer several types of demo accounts, giving traders a choice of different trading platforms, such as Meta Trader 4, xStation (read also: Brokerage account for beginners and Stock market investments for beginners).
Demo forex account without registration – is it possible?
In most cases, forex brokers give the opportunity to open a demo account only if the interested person registers on the broker’s website. If the prospective trader does not want to do this because of the emails sent, he can simply uncheck the consent regarding marketing. This is worth considering, of course, because if the person is interested in investing seriously, he or she may miss out on an interesting offer or promotion.
When registering for a forex demo, the trader will also receive an individual login, which will allow him to log in for a certain period of time, e.g. 30 days, and operate the platform with the settings remembered beforehand. Reputable brokers require their users to provide data before they set up a forex demo account.
Where to open a forex demo account?
For beginners, the best solution will be to open a demo account with the best forex broker. Beforehand, however, it is advisable to familiarize yourself with the broker’s offerings and see what financial instruments and markets it offers. It is best to opt for a forex demo account with a reputable and well-known broker on the market.
Why should you open a forex demo account?
It happens that investors start their trading adventure by setting up a real investment account right away. This, unfortunately, usually ends in a quick loss of capital. So why is a demo forex exchange a good solution to start with?
Acquiring new knowledge
Investing without knowing the concepts and principles of the stock market, will not lead anyone to profits. Many people who start investing do not have the proper preparation and therefore learn from their mistakes, incurring large losses. Moreover, a large part of them, after losing their initial capital, get discouraged and give up investing. Thus, if a trader does not have any investment knowledge, he should start his adventure just by opening a forex demo account.
Test your trading strategy
In a demo account, a trader will certainly not feel the same excitement as when playing with real money. However, when deciding to use such an option, the trader will notice that profitable trades are worth holding, which, with real money, are closed and not move the stop loss along with the falling balance hoping that the price will rebound. However, it is worth remembering that the forex demo account is only for starters. To make real money, a trader must switch to a real investment account.
Nothing teaches like practice. Even if he reads a lot of books on investing, there will always be something he didn’t know. Trading forex is a difficult and real market. If a trader wants to be successful, he needs to gain enough experience. At least a month or two, or even more depending on your needs, will certainly not hurt the investor, and will help in many ways. It is always better to lose virtual money. The only downside is that if you make a profit, you won’t be able to withdraw it.
Getting acquainted with the investment platform
Even if the investor already has some knowledge and has learned the rules of the stock market, it may be that the investment platform will give him problems. For his safety, the trader should set up a forex demo account and check all its functions (read also: Safest stock market investent). It may be that the trader will discover new functionalities or avoid accidentally closing all his positions with one click. It is a good idea to know the platform you are using (read more: Online investment platform for beginners).
When to switch from a forex demo account to a real one?
This is a question every investor must answer for himself. It is worth starting with small amounts, but ones that will have some meaning to the investor. It is important to remember to always learn from good habits. It is not worth treating investing like gambling, as it is not a casino. The adventure with a forex demo account should last at least 3 months, although this is strongly individual, and some may learn for less time and others for longer.
How to open a forex demo account with a broker?
Already knowing what a forex demo account is and what it is used for, it is also useful to know how to open a forex demo account? The whole process is very simple and usually takes only a few minutes. To open a forex demo account with the broker of your choice, you first need to go to the broker’s website and enter the forex demo account tab. After clicking on this, an account with an application form will appear on the site. You need to fill out the form and remember to choose an account in the right currency, as well as decide on the right investment platform.
In most cases, brokers do not require proof of identity when opening a demo account, as they do when opening a real account. Moreover, the questionnaires that are sent to new clients are much shorter. After completing the registration procedure, the trader immediately receives virtual money, which he can begin to dispose of.
Forex demo account – ranking
There are so many investment accounts available that it is difficult to choose the best one. Especially when the person takes is a novice in the subject of the stock market (read also: Investing in the stock market and How much can you make in the stock market). It is worth making the choice easier by using ready-made rankings. Below is a list of the best brokers that offer a good forex demo account.
In this case, the forex demo account works on a limited basis. During the trials, the trader has only 1,000 euros at his disposal for trading. Moreover, with a demo account not all assets are available.
On the plus side, on Capital.com he has the possibility to create several accounts in different deposit currencies. This makes this forex exchange simulator more versatile. Several accounts can be used alternately. With a single click, a trader can find himself in a real account or switch from one demo account to another.
Although the trader does not try out all the financial instruments, all the time he has full access to the functionality of the platform. What advantages does a forex demo capital account have?
- Free and unlimited time free forex demo account,
- Ability to open more trial accounts, as well as switch freely between them,
- More than 140 currency pairs on offer, although not all of them are available in the demo version,
- Two heavily developed platforms to choose from – the proprietary Capital.com and Meta Trader 4,
- An extensive training section,
- A broker that is supervised by the relevant state institutions.
And what disadvantages does it have?
- The demo account is credited with only €1,000,
- Limited access to the market on the demo account,
- No copy and social trading.
The eToro broker gives access to a temporarily unlimited demo account with 100,000 virtual money in USD currency, as well as all the functionality of the platform. Such a set-up will provide every trader with the right conditions for learning to trade. In addition, eToro’s forex demo account is no different from a live account.
Thus, with a single click one can switch between one and the other. The trader does not need separate login credentials for each account. On the other hand, thanks to full access to eToro’s proprietary platform, the most popular functionalities, such as copy and social trading, can also be tested without restrictions.
Therefore, beginners on a demo account learn the basics and the possibilities of a specific platform, while more advanced people test a variety of investment strategies. Everything is fully transparent, as well as friendly to new users. A trader can quickly assess whether the Forex broker suits him or not. The advantages that the eToro Forex demo account has are:
- Free forex account with all the functionalities of a real account,
- The ability to trade $100,000 in the demo account,
- 47 currency pairs on offer (read also: Forex currency trading),
- Friendly and modern trading platform, which is available in mobile and web versions,
- Possibility to use social and copy trading,
- The broker is supervised by multiple regulatory bodies.
Disadvantages include only:
- Poor training section, which includes only a few instructional videos.
In this case, the forex demo account is powered by $50,000 of virtual money. What’s more, there are no restrictions on the platform’s capabilities, so the trader can easily test all its features. This broker provides every trader with the right conditions to learn from the interface, as well as effective trading techniques.
Another advantage is that the trader will gain access to the demo account immediately after registration, and can switch to live trading with a few clicks. In addition, the demo account can also be used to check out additional broker features found in Alvexo Plus. These include the famous trading signals, thanks to which it is possible to earn even without experience, as the trader uses the skills of other traders.
All this means that a demo account with this broker gives traders everything a future investor and user of an investment platform can expect. This makes it easy to assess whether the trading platform meets the trader’s expectations. The advantages of this type of forex demo account are:
- $50,000 to trade in the virtual market,
- More than 50 currency pairs and more than 400 other assets,
- Choice of proprietary forex platform and Meta Trader 4,
- Ability to use social and copy trading,
- Cypress CySEC regulated broker.
The disadvantages are mainly that a free account is only possible for 30 days, while Alvexo Plus is a paid service.
The forex demo account with this broker is also unlimited, but the amount in the investment account is 50 thousand euros. This broker offers the option of topping up the demo account at a later time with virtual funds. As with the eToro broker, here too the trader gains access to all the platform’s functionalities, and one can switch between accounts with a single click, which makes it very easy to use.
In addition, with the help of the Libertex broker, one can enter the forex market thanks to two platforms – the broker’s proprietary one and Meta Trader 4. This makes the demo account a solid learning tool for beginner traders, and also gives a lot of room for those who want to check out different trading strategies. And what advantages does the Libertex forex demo account have?
- Free forex demo account for an unlimited period of time,
- An available 50,000 in the demo account and the possibility of another replenishment with virtual funds,
- More than 50 currency pairs on offer,
- Two platforms to choose from – the proprietary Libertex and Meta Trader 4,
- The broker is supervised by the Cyprus CySEC.
The drawbacks, on the other hand, are:
- Little educational section,
- Other than forex, small selection of assets,
- Lack of copy and social trading.
Forex demo account – to whom is it useful?
A forex demo account is, of course, a demonstration account, while a live account is a real account, the opening procedure of which is more elaborate and in which the trader can deposit real money himself. The investor can deposit as much as he thinks into such an account. The questions most often asked by novice investors are:
- Is the forex demo account free? Yes,
- Are there any funds in the demo account? No, there is only virtual money,
- Is it possible to withdraw money from the demo account? No, since virtual funds are traded, they cannot be withdrawn,
- Is it possible to have only one demo account? No, you can have an unlimited number of them,
- Are the quotes and charts on the demo account the same as on the live account? Yes,
- Does the demo account work the same as live? Yes, although some brokers limit the features on the demo account.
And for whom is a demo forex account created? Demo accounts were created primarily for beginners. Their main tasks are:
- To indicate the functionality of the investment platform,
- Learning to make basic operations, such as opening and closing orders, etc.,
- Getting acquainted with the specifics of financial markets,
- Presentation of the principle of capital management,
- The opportunity to check investment strategies.
A forex demo account is aimed at newcomers to the stock market world. If a person has no idea about the markets, then without a doubt he should use a demo account.
Where to open a forex demo account?
Demo accounts, just like real accounts, are offered by virtually every broker that operates in the forex market. When deciding to set up your first demo account, it’s best to consider at its broker to set it up at the outset. To begin with, you should familiarize yourself with the available types of brokers. It is recommended to use a broker of ECN or STP type.
This is the one you should choose already at the stage of opening a forex demo account. This is especially about getting a good understanding of the rules of order execution on an account that may one day become a real account. It is also possible to set up several demo accounts at one time, which will allow you to compare trading conditions and costs with each other.
Which forex platform is worth using?
The most popular forex platform is definitely Meta Trader 4, which is considered by many to be the best in the world. It is worth setting up a demo account on this very platform, as in all likelihood it is the one that most brokers will use in the future when you decide to set up a live account. A good choice may also be the Capital.com platform, which will prove especially useful for those who are just starting their adventure with finance.
How to open a forex demo account?
Opening a demo account requires a trader to register with one of the available brokers. The procedure is very simple and takes a few minutes. To switch to real trading, a little more time is required. Below are step-by-step instructions on how to open a forex demo account with the Capital.com broker.
Setting up an account
An interested person must go to the broker’s website, where there is a form to fill out. You need to fill in the blank by entering your username, password and email address, and then click – create account.
The broker will then send an activation link to the email address provided. When he clicks on it, he is immediately transferred to the trading platform. Then he can use the stock market simulator, as well as the forex demo account.
A demo account can be used in the same way as a real account. Therefore, once a trader learns how to trade on the simulator he will know how to invest live. To start trading, he should select the currency pair he is interested in and click on it. Then he will be taken to a new tab where he will check detailed information about the asset in question, such as the latest news or rate history.
When the user is ready, he can click the Act button. Then a new window will appear, where the user can set the parameters of the transaction, i.e. the type of position – either short or long, the amount of investment, as well as the amount of leverage. Finally, the currency should be purchased (read also: Best currency to invest in).
Activating the account fully
Now the investor already knows how to get into financial instruments. Then he can switch from the simulator to the real stock market and start making money. How? Just fill out the profile with accurate personal information, and then verify it with the appropriate documents.
How long to use a forex demo account?
Already knowing where and how to set up a demo account, many people may wonder how long to trade on a demo account. However, there is no clear answer to this question and it is related to issues of investment psychology.
The question of the pace of learning is a very individual matter and is different for each trader. Of course, there are people who already after 2-3 weeks of playing on the demo account will be making stable and satisfactory profits, but it is assumed that a period of 3 months is the minimum for testing the demo account. When investing on a demo account, you should test the chosen investment strategy.
How to invest on a Forex demo account?
All test accounts work in the same way. The user has to register, and in return he receives a certain pool of virtual money, such as 50,000 PLN, which he can invest according to the chosen investment strategy.
Everything but the money is real, i.e. quotes, market changes, prices, etc. The user on access to most or all markets and financial instruments, as well as the platform’s features, including technical analysis indicators, real quotes, etc.
What to invest in a forex demo account?
The stock market offers various financial instruments that investors can trade. One can opt for safer stock indexes or mutual funds, as well as riskier, but also more profitable stocks or futures (read also: How to invest in stocks). And how to play the stock market to win? The choice of instrument depends on the experience of the investor and the amount of capital.
What tests should a trader perform?
Thinking about stable as well as long-term profits in the Forex market, you need, in particular, to build your own investment strategy. The moment the trader on the formulated assumptions of the investment strategy, the time comes for its testing, which should be carried out precisely on the investment account.
What kind of testing is best to do?
- It is advisable to treat the demo account like a real account,
- You should test all the assumptions of the investment strategy,
- It is necessary to check the markets on which the investor wants to invest in the future,
- Trading hours,
- Time intervals,
- Method of opening, conducting and closing trades,
- Risk management principles,
- It is worth sticking strictly to the principles of investment psychology.
Free forex test account
All Forex brokers offer free forex demo accounts where you can test the functioning of their platform. The demo account is always credited with virtual money, which can be invested in any way you like. Investing with virtual money is done on the same platform with the same prices of currency pairs as in the real account (read: How to invest in currency).
A forex demo account gives traders the opportunity to test their own forex investment strategies. In most cases, traders spend several months in a demo account before placing their money. Registration and downloading the platform is completely free.
When is it time for a real account?
The moment to consider switching to a real account is when:
- The first 3 months of testing on the demo account have passed,
- The investment strategy has been thoroughly tested,
- The investor is able to make money in the medium term.
If the user is not generating profits after the first quarter has passed, he or she should extend the testing period of the account by additional months until profits appear in the account.
Differences between demo and real accounts
Reputable professional brokers do their best to make the trading conditions in a demo account look like those in a real account. However, due to technological limitations, the operation of the demo environment is slightly different from that of the real market. Here are the key differences between the two accounts:
- In the real environment, customer orders are executed in the interbank system and affect the price level of a specific financial instrument. In the case of a demo account, orders do not enter the order book and thus do not affect the actual price level of a specific financial instrument,
- In the case of a forex demo account, orders are not executed in the market, so unlimited market liquidity is assumed at the level of the first price in the order book,
- In the demo environment, the execution time of orders in some cases may differ from the live account,
- Sell Limit and Buy Limit orders are executed in the live account are executed at the best price available in the interbank market at the time. This price can be the same as the price in the client’s order or even better. As for the demo account, the orders are executed at the price that was set by the client at the time they were placed,
- Stop Loss and Take Profit orders on the live account are executed at the best price from the interbank market at the moment. As for the forex demo account, the orders are executed at the price that was set by the client,
- In the demo account, there may be some discrepancies in the amount of swap points charged, due to possible delays in their update compared to the live account,
- In the case of a demo account, the Stop Out mechanism may sometimes not occur,
- A trader who has a demo account with a forex broker has no right or right to profit from his positions in an OTC contract,
- Investing in a demo account and in a real account is not the same when it comes to making investment decisions. The fact that an investor achieves a high rate of return in a demo account is no guarantee that in a real account he will also achieve such a result,
- In the case of a real account, emotions play a big role in influencing decision-making, and they are usually not a good advisor. In a demo account, the user does not stress as much and does not make such derivative decisions.
Forex demo account for a longer period of time
You can use a demo forex account for an extended period of time. After testing it for a few months, it is not at all necessary to give it up completely. Experienced traders have one or even several demo accounts in addition to the real account and use them as follows:
- If, after the first successes, the strategy chosen by the investor begins to fail, one has to stop investing in the real market and return to creating or polishing the strategy on the demo account,
- In the demo account, a new investment strategy can be tested in parallel,
- Traders use the forex demo account to make more daring investment moves on it.
A demo account is a free trial version that presents the capabilities of a real investment account. It allows you to carry out transactions, using real prices of financial instruments in real time, by disposing of virtual funds.
Those who are new to forex trading should open a demo account in order to gain the experience that is necessary to be successful with real transactions (read also: Forex trading demo for beginners and Forex investing beginners).
A forex demo account for other advantages as well, such as:
- Practically learning what forex trading is all about,
- Placing buy and sell orders without fear of losing real money,
- Being able to test new investment strategies.
While testing the demo account, it is worthwhile to constantly expand your Forex knowledge at the same time, as well as to conduct transactions on the demo account. Such practical and theoretical learning will bring a lot of benefits to traders.
Benefits and disadvantages of trading on a demo account
The biggest advantage of a forex demo account is the possibility of making investment mistakes and not suffering any losses and consequences from it. The money that traders trade da virtual, while the market is like the real one. Therefore, you are free to test your abilities in the real market without any investment risk.
When the demo account is zeroed out after making too many mistakes, you can quickly recharge it with the amount of your choice. Often, investors top up the demo account with the amount they intend to invest in the future and can thus run an accurate simulation. However, will this type of simulation be correct? It is worth remembering one of the most important aspects of investing, namely psychology. No demo account can compare with real investments and what emotions accompany it, even if the amount the investor is trading is not high (read also: Stock market simulators).
Therefore, investing for too long in virtual accounts can be a standstill for the investor, or worse, a backslide. Why? Because always when investing in a demo account, the trader will be accompanied by the realization that it is not his money. If this goes on for too long, improper habits may develop that the investor will not be able to get rid of.
Such a problem is usually to open positions too often, because, after all, it is not his money, the network is willing to risk it. Then the trader enters positions at times and places where, in a real account, he would never have decided.
Forex demo account – summary
In conclusion, it should be said that the forex demo account is an indispensable element, related to investment education. However, its importance is often underestimated. It is worth using a forex demo account to improve your trading technique, thanks to access to all professional tools related to investment, also to live reports of market events, as well as the behavior of all traders.
All you need to do is register with the broker in question, and make sure that the demo mode is set on the platform. A certain amount of virtual money will be sent to the trader’s investment account, and thanks to it, the trader will be able to invest in various assets, as well as develop the best investment strategy for himself, while not risking losing his money.
Every day you can hear stories of investors who bypass the demo account and immediately decide to invest in the real account, and what’s more, investing too high amounts at the very beginning. This is where the huge losses and investors’ reluctance to continue investing come from.
It is the Forex demo account that can save future investors from huge losses and discouragement from investing. It is worth taking advantage of it, as it is free, and it gives you a number of useful skills and comes with basically the same benefits.
How to invest in Forex?
There are usually two types of Forex trading – day trading and swing trading. In the first case, the trader opts for short-term investing. It consists in the fact that the trader opens and closes several and sometimes even a dozen positions in one day. Day trading requires devoting considerable time to investing, as well as having knowledge at the appropriate level. Day trading is usually chosen by people who want to take up investing seriously and for whom this is to be the main source of income (read more: How much can you earn from forex and Alior Trader demo).
Swing trading, on the other hand, is long-term investing, which involves an investor opening positions and holding them for an extended period of time, such as several weeks, months or even years. Swing trading does not require spending that much time. It is enough for an investor to look at his portfolio once in a while, such as once a week.
It is worth knowing that investing in the stock market is associated with a constant expansion of knowledge, and you need to be prepared for this. The investor is faced with a constant deepening of knowledge and should choose the right sources for this. It is advisable to use books, but also online articles, as well as forex training courses and webinars (read: Forex online and Forex market or Forex investments). On the Internet you can find both free forex courses and paid courses – online and onsite (read also: Online trading). The offer is very wide and there is certainly something for everyone.
What else is worth remembering when investing in forex? About controlling emotions. This is a difficult skill, but very useful. Stress or excitement can bring very negative consequences, resulting in the loss of all capital. It’s worth learning to approach investments coolly, without getting too excited. By doing so, you can profit much more. Calmness and composure are at a premium in this area, so it is worth awakening and cultivating in yourself.
A forex demo account is a place where a trader should spend some time learning and getting to know the stock market world. Nothing can replace such practice for him. However, even before opening a demo account, it is worth looking at the offer of several brokers to choose the one whose terms will be most favorable. In this way, the novice trader will learn the secrets of the forex exchange and learn how to use the trading platform.