The Ins and Outs of Trying Out a Forex Demo Account
Trying your hand at Forex in way of a demo account is used by thousands of traders and investors trying to determine if Forex is for them. Demo accounts are available widely on line, where an interested person can see how the whole thing works. Playing with a demo is along the same lines as the Pentagon generals playing war games.
You basically have an account, with no real money in it, to buy, sell and trade the same way you would in reality. This allows you to see what is involved without risking any real money. The software for the demo accounts is deeply rooted in reality and you are able to see, at the end of the day, if you have made wise choices or need to keep practicing.
The idea behind the program is quite simple. The investor would have a pretend margin account with $10,000 in it. After studying the data from markets, they think the US dollars will have increased value when compared with the Japanese yen. The program allows purchases on margin, so one hundred thousand US dollars are purchased while selling one hundred thousand dollars worth of Yen. The difference, or spread, is what the pretend profits are.
So why spend your time with pretend accounts? Why not just jump right into it?
Well, it is much safer to learn how to do this complex trading when no real money is risked. While you may not have thought about it, a lot of people will spend hours on top of hours getting their feet wet as it were, before going swimming. A pilot, for example, will spend several hours in a flight simulator before actually taking off in a real plain. A person just learning to drive will practice before going out and driving on the highway.
Practicing with the demo software is the same principal. You have to know what you are doing before taking risks. Spending time on the Forex simulator allows you to gain knowledge, skills and instincts that will be needed when you go out there and risk ten thousand dollars for real.
You can find these demo accounts through most brokerage companies that trade in Forex. The demo may be free or there may be a small fee associated with it. If there is a fee, don’t just assume it is not worth your money. Even if a fee is assessed, it is most likely worth your money to practice. You have to have an idea what you are doing before you just jump right in. Spend all the time you can practicing with the demo account. If you deal directly with a broker, an account can be set up quickly. You can go on line to find a wide array of companies ready to set up an account for you to help fine tune your skills. It cannot be stressed enough that time must be spent in the demo account.
Besides making yourself feel at ease, it may help your spouse as well. Mike O’Malley opened a demo account after months of study. Convinced he could make a healthy profit as a day trader in Forex, he spoke to his wife. She was not convinced it was a good idea. After all, with the kids’ after school activities and retirement to think about, not to mention the mortgage and other monthly bills, there wasn’t a lot of extra money to play with. But after Mike found a brokerage company he felt he could trust, he set up a demo account and handled it just like a live account.
After practice, and several days, Mike was able to make a nice pretend profit. He took that information to Mrs. O’Malley. After she looked it over and understood more about what was happening, she agreed to let Mike give it a whirl. Today, Mike has become quite successful in trading Forex and the two believe this will continue to happen. Oh, sure, there were a few times that Mike made the wrong call and they lost a little, but overall, they are on the plus side. By using a demo account before using real money, Mike was able to overcome his wife’s objections and is an active trader today.
Also you can see the video related to forex demo account
www.fxclubdemo.com
Here some answer the question about forex demo account
I turned 50000$ into 70000$ trading on forex practice account in two days, is that good?
The reason I am asking is because it's kind of hard to believe that I was able to make 40% profit in just two days. I am wondering if the demo account is even legit, in the sense that it works exactly like a real account with the only exception that it's not real money? Is that true?
About Author
Nick Makaryk is an Internet Publisher, Copywriter, and Founder of Best Credit Cards A Free consumer credit card comparison site helps consumers find the Best Credit Card while avoiding high interest rates, charges, and fees.
Tags: alert, analysis, custom, daytrading, forex, indicators, metatrader, technical
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August 15th, 2009 at 10:34 am
Wow. This sounds like a scam. These "training programs" generally don't do anything except stimulate activity and churn through your money. I can't imagine JP Morgan Chase doing something like this. Maybe the company has somebody who used to work for JP Morgan and is trading on the name.
Email me with the web site and I'll be happy to look into this for you. I love helping people by deflating scams.
August 15th, 2009 at 11:10 am
With so much confidence I would expect you to just jump into the live market, but a demo account does have that no risk safety net and if you can win prizes that is an added bonus.
I suggest anyone that is new to forex to make full use of their safety net.I don't recall off hand any forex trading sites having monthly cash prizes but it does sound interesting. Good luck.
August 15th, 2009 at 10:47 am
Have you improved this Ea since the last comment ?
I found this Ea a little cumbersome
August 15th, 2009 at 11:10 am
what does this thing do?
August 15th, 2009 at 8:07 pm
It is difficult to equate demo account trading results to real world trading profit potential. As others here have pointed out, the use of real money may have a way of changing your trading behavior.
One way to combat this is to find and use a forex trading robot with your demo account. If you like the results in the demo account, use the same robot and exact same trading strategy in your real account. I would also recommend you trade in small lots until your system proves itself.
Remember, the forex market moves very fast, and you can lose money just as quickly as you can make it. Learn how to control your trades to maximize profits and minimize losses (this is the promise land for forex traders).
August 15th, 2009 at 12:15 pm
Hi shab: you have to put it in EA folder (ie the expert folder) not the expert/indicator folder.
cheers.
August 16th, 2009 at 3:06 am
This advice is probably not worth a lot, but trading currencies is just like trading stocks, with the one big exception that you are doing it on 10% margin, so your gains and losses are magnified 10x.
A trend once started tends to continue, so look for a trend and ride it. Is the currency trading above the 50 day and 200 day moving average? Is the currency at the bottom of the bollinger band?
Be sure to cut your losses very quickly and let your winners ride. Even double up.
August 15th, 2009 at 7:22 pm
you have to look to your right under “About this video”
August 16th, 2009 at 12:08 pm
Great EA!!, i cant see the link to download the EA and the other tools
August 17th, 2009 at 12:12 am
The catch is that you can loose 5k or more in a very short period of time too.
Exchange rates go up and down every day. And anybody can make money once in a while in Forex trading. But to be profitable in your trading over weeks and months you need to avoid loosing money. And to avoid loosing money over the long term is very, very difficult.
August 17th, 2009 at 10:56 am
$800 is fine for opening your mini account.
You can utilize leverage as low as 1:1 with most any broker and you can go as high as 200:1 or even 400:1.
Rather than focusing on the leverage, what you should actually be focusing on is the margin.
At a 5% margin on an $800 account you would be positioning $40 into the trade. At a 1:1 leverage you would be controlling only $40 of currency (less the spread or "commission"). At a 100:1 leverage you would be controlling $4000 of currency with the same $40.
I would be happy to send you some more info if this is confusing for you.
Paul
pupp50@yahoo.com
August 17th, 2009 at 5:18 pm
Most often they are the same. The only different is your trading patern when trading in demo (not your money) vs trading with your real hard earned money. It's all about the psychology of trading.
Good luck.
August 17th, 2009 at 10:52 pm
The only way to speed up recognition skills is by looking at tons and tons of charts. Look at all different time frames and examine them and look for trading ideas. The speed of the demo platform has nothing to do with how fast you will learn. Trading on the demo is way different then live trading. Start small.
August 18th, 2009 at 2:05 am
Wow! This is really cool.