Demo trading within the Forex market is one of the main ways that people gain experience trading without putting their money at an excessive amount of risk. Trading is always risky, and a demo trading setting alleviates that risk since you are not trading with real money. If you’re a new trader in the Forex market, it is a way for you to familiarize yourself with what you’re doing so that when you start trading with real money, there are fewer surprises. It’s also a way for experienced traders to test out new ideas and concepts.
But there’s a bit more to a good trader than just having a demo account. We can help you get started with a demo account, and then point you in the right direction for what to do once you’re ready for the real thing. Hopefully, this educational material will help you to be a better trader—especially if you pair it up with the other material here on our site.
Creating a Demo Account
Demo trading accounts are not difficult to create, but sometimes there are extra steps involved that are not readily published on your broker’s website. If this is the case, then a quick phone call can do the trick. Call the broker’s customer service department and ask how to go about setting up a demo account. They will walk you through the process. They might even do the work for you and then get in touch with you regarding how to sign in to your new demo account.
This is the time where traders start asking, ‘why are brokers so eager to help you set up a free trading account?” Or, in other words, what’s in it for them?
Actually, there’s a lot in it for them. If you are demo trading, it means that you are a potential real money client. The customer service department wants you to succeed as a demo trader and will give you many of the tools that you need to be successful. If you’re making fake money, you are more likely to open an account because you’re more likely to make real money. It’s an enticing offer, for sure.
The main point: Forex brokers encourage you to use their demo accounts, and they encourage you to use their resources so you can be successful as a demo trader. They might not readily make the process available to you for a variety of reasons, but if they know you’re a potential customer, odds are they will bend over backwards to get your business. Get the practice you need, and then make a decision about depositing your cash into a real money account.
MetaTrader is most likely the platform that you will be using when you start trading Forex. It is universally recognized as the best tool out there because it has so many extra features that go above and beyond what just your broker will provide. In fact, because it allows you to use stop-loss points, automate your trading, and extrapolate future trends to trigger trades that you might not be at your computer for, MetaTrader is the tool that you should definitely be using for your Forex trades.
If you’re going to use this software for real trades, you need to start using it for your demo trades first. If that’s the case, then you need to connect your brokerage account to your MT account. This is a fairly simple process. Let’s walk through it quickly.
Step #1: Create a Forex account. If you don’t have one yet, find a trustworthy broker (more on that here), and sign up.
Step #2: Create a demo account. The quickest way to do this is to get in touch with your broker’s customer service department. They will help you to do this.
Step #3: Download MetaTrader. Some traders still use MT4, but MT5 is the most current version. You can find this with a quick Google search.
Step #4: Open up MetaTrader. You will be prompted to sign in. Provide your brokerage information, your login info, and the password. Use your demo account’s info so that you are not trading with real money.
Step #5: Start trading!
When you’re ready to start trading with real money, be sure to sign out of your demo account and sign back in with your real account. Do not confuse these two steps, as that could potentially be detrimental to your account’s balance.
Why is Demo Trading Important?
Demo trading gives you practice. Forex trading involves real money and that means you can lose money. When you demo trade, you are gaining practice with real currency pairs behaving in a real way, but without using real money. That allows you to practice, and it gives you more experience so that when you transition back to real money, you are wiser and give yourself a better chance of being profitable. It’s not a sure thing, but the extra practice gives you a better likelihood of success.
Demo trading is a tool. It’s practice for the real thing. The more successful you are as a demo trading, the better your chances are as a real money trader. There’s no guarantee, but it is a way to help you get the edge that you need to be successful.
CryptoCurrency Demo Trading
A lot of people who have been wondering about how they could trade crypto currency. They’ve come to the right place. You can trade Bitcoin, Ethereum and many other currencies on a demo account. A Bitcoin Trading demo may be what you need before you actually trade it for real. Price action moves so quick on the Crypto market, if you aren’t prepared you will get in a lot of risky situations. Demo trade Bitcoin for awhile or at least until you are making solid trades. You can always trade them on the CFD market as well.
Transitioning to a Real Money Account
Let’s say you want to stop demo trading and start trading with real money. Awesome! Trading is exciting and holds a lot of potential. Hopefully, after your stint as a demo trader you understand the risks involved with trading. There’s always a chance that you can lose money.
When you’re ready to start trading with real money, your broker has a set deposit method in place. If you’ve already been in touch with customer service, getting in touch with them can be helpful, but it’s not always required. You might have an account representative in place already, you might not. Either way, following the steps to get money into your account will be pretty straightforward. If you need assistance, it’s there at your disposal. Remember, the broker wants this process to be as easy as possible for you so that you can start trading right away.
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