Understanding the Need for a Demo Account When Trading Using a Forex Trading Platform January 8, 2018Expert BlogsOff

Are you new to Forex trading? Well, in this case, it will be preferable to trade using a demo account first. The reason is Forex is a decentralized market. It often happens that the dealers do disseminate their price feeds through the different proprietary trading platforms.

This is why a practice account will give you an idea how trading happens in reality in the Forex world.

Why Create a Demo Account for A Forex Trading Platform?

Helps You Discover the Platform Layout
When you opt for a demo account for a forex trading platform, then it gives you the chance to become familiar with the layout of the platform. Different forex platforms follow different approaches.

Some platforms are detail oriented. They try to integrate everything from charting the news. Some of the platforms have a very simple layout,and they focus on the basics only. For example, they focus on order entry, reporting and price quotes.

Try Out Your Strategies
Most forex traders think that the demo account will only be used before they take the plunge into live trading. This is not the case for sure. Most Forex traders want to play it safe. This is why they usually test their trading strategies on the practice account despite being experienced. This way they get a clear idea of the outcome of the strategy.

The most important thing is that if you are unable to achieve success using a practice account, then you will not be able to get success with a live account also.

The Best Approach Toward Using a Demo Account
Ideally, you should place about 20 trades using the demo account before you trade using real money. This way you will be able to master the specifics of the order entry on the particular platform.

When you have used a demo account for a forex trading platform, then you should have a clear idea about how to place a limit order. You should also be well-versed about how to place a stop.

You should know whether you can set a limit or stop at entry time. When you have used the demo account, then you will also have a clear idea whether the platform spreads are fixed or variable.

When you open demo trading account, then it will also answer your concerns about the lot size. For example, different platforms have different lot sizes. You can usually trade about 1000, 10,000 or 100,000 units. Some of the forex trading platforms also allow you to mix and match the sizes of the lots.When you try the demo account, you will be able to answer all these concerns.

This is why before opening an account, check out if the particular forex trading platform offers a demo account. Raise your questions to the customer support service in this regard and also ask about the features offered in the demo account. To develop a strong command of forex trading, you should also make use of Fibonacci Calculator. It can help you calculate the price retracements,and it becomes much easier for you to correct your forex strategy once you are aware of the calculations.

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