Forex Demo Accounts

Forex Demo AccountsForex Demo

What a Trader Can Do With a Forex Demo Account

A forex demo account is an account that is loaded with virtual money by the broker for the trader to use in simulated trading.

The essence of providing a forex demo account to traders is for them to do a whole lot of things that will enhance their trading experience and improve their ability to trade profitably in the forex market. Sadly, many traders under-utilize their forex demo accounts. In this article, we will look at a few things that traders should be doing with their forex demo accounts in order to derive all benefits accruable from them.

Top Forex Broker Brokers that offer Demo Accounts:

1
Min. Deposit
$10
Exclusive promotion
Our score
10
55+ currency pairs available
Trade on a trusted platform
24/7 support via live chats, email or phone call
Start Trading
Description:
LonghornFX is a true ECN STP broker dedicated to delivering a superior trading experience to traders no matter their level of experience. Their services are based on transparency, innovation and efficiency, ensuring an unparalleled trading experience for all.
Payment Methods
Credit Card, Debit Card, Visa, Bitcoin
Full regulations list:
LonghornFX offers high-leverage trading on a wide variety of assets. Trading with leverage carries a degree of risk which may result in losing more than your investments. Clients should practise risk management to protect themselves from losing more than they can afford when trading with leverage.
2
Min. Deposit
$10
Exclusive promotion
Our score
9.3
0% Commission Account
Low Spreads
Eco-Account Option
Start Trading
Description:
CedarFX is an eco-conscious broker offering 0% commission trading on 170+ assets, including Forex, Cryptocurrency Pairs, Stocks, Indices and Commodities. With up to 1:500 leverage, no-fee transactions and low spreads, traders can make the most of their funds. CedarFX also offers an Eco Account option to support tree planting and sustainability projects.
Payment Methods
Bitcoin, Credit Card, Debit Card
Full regulations list:
Please ensure that you fully understand the risks involved, taking into account your investments objectives and level of experience, before trading, and if necessary seek independent advice.
3
Min. Deposit
$200
Exclusive promotion
Our score
8.7
Join the Social Trading revolution. Connect with other traders, discuss trading strategies, and use our patented CopyTrader
eToro is the world’s leading social trading platform, offering a wide array of tools to invest in the capital markets
Largest number of currency pairs to trade
Start Trading
Description:
eToro is a multi-asset investment platform with more than 2000 assets, including FX, stocks, ETF’s, indices and commodities. eToro offers a wide range of currency pairs and other trading instruments. eToro users can connect with, learn from, and copy or get copied by other users.
Payment Methods
Wire Transfer, Bank Transfer
Full regulations list:
CySEC, FCA
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.
4
Min. Deposit
$10
Exclusive promotion
Our score
8.5
Can fund with BTC
64 global companies including Netflix and Amazon
Free deposits and withdrawals
Start Trading
Description:
EagleFX is an online digital asset, Forex and CFD broker providing traders across the globe with cutting edge technology to trade the world’s markets. Our focus has been to change the way people trade Digital Assets and Forex. We are driven to provide traders with incredibly low-cost pricing across all Digital assets, FX, stocks, indices, commodities and futures along with industry-leading 24/7 live customer support.
Payment Methods
Credit Card, Debit Card, Bitcoin, Wire Transfer
Full regulations list:
EagleFX offers leveraged trading on a range of assets within its platform. CFD and Spot Forex trading do carry a degree of risk which may result in you losing more than your initial investment. Please ensure you fully understand the risks involved with leveraged trading and ensure this is not detrimental to your personal or institution's financial well being.
5
Min. Deposit
$200
Exclusive promotion
Our score
7.9
BlackBull Markets’ unique feature lies in its stated goal of delivering an “institutional” trading experience to retail clients
No-Dealing Desk Broker (NDD), with Straight Through Processing (STP) all done on a true ECN
State of the art Equinix servers, based in New York (NY4), London (LD5) and Tokyo (TY3)
Start Trading
Description:
BlackBull Markets is a top-tier, award-winning, and financially registered forex broker with a globally trusted presence. Operating since 2014, BlackBull Markets is now the fastest growing financial services business in New Zealand. We were founded with the goal of becoming the leading online Financial Technology and Foreign Exchange broker. BlackBull Markets is a true ECN, No Dealing Desk brokerage specializing in Forex, CFDs, Commodities, Fibre Optic Communications and Fintech solutions for a global clientele.
Payment Methods
Mastercard, Visa, Bank Transfer, Neteller, Skrill, UnionPay, FasaPay
Full regulations list:
FSPR, FMA New Zealand

So what exactly should traders be doing with a forex demo account?

a)    Understanding the Trading Platform

If you conduct a poll of traders to find out how many traders actually use their forex demo accounts to understand their trading platforms, you will be shocked at the results. Traders hardly use their forex demo accounts to understand the trading platforms they will use to trade their hard-earned money. The forex demo account is a good way to understand how the trading platform works. There is a lot that can be learned. For instance, the trader can learn how to place orders. With the forex demo account, the trader can learn when to use an instant order and when to use a pending order. This point is so important. Many bad trades have resulted from the use of the wrong kind of order for a particular trade situation.

For instance, a comparison of the Jforex platform with that of ActTrader, the MetaTrader4, Currenex and other platform types will reveal that the process of setting pending orders is very different as you move from one platform to the other. The MT4 has a very simple system of setting pending and instant orders. A trader who has been used to setting pending orders with the MT4 platform may be in for a rude shock on being confronted with a JForex platform. This is why it is necessary to use the forex demo account to make all the mistakes that could be made in this regard so that when live trading is done, real money is not lost.

There are other stuff that could be learnt when it comes to understanding the trading platform. Things like using the indicators, the charting tools, opening and closing windows within the platform, conducting line studies, etc, all make up the mix when it comes to understanding the trading platform.

b)    Testing Expert Advisors and Indicators

The best way to test any expert advisors and indicators that have been created for live trading is to subject them to demo trading with a forex demo account. There is very little that can be done to improve an expert advisor or indicator if it is not put to the test on a forex demo account. Errors in coding can be revealed, corrected and the software put to the test once more in order to come out with a perfect product.

c)     Generating Trade History for Signals Alert Services

If you are a trader looking for a way to monetize your knowledge of forex trading by selling trade alerts or forex trading signals, then you will find a forex demo account to be an invaluable tool. No subscriber will commit his hard earned money to a signals provider without a track record. The forex demo account can help you generate that track record. By dutifully storing a history of trading activity on demo specifically for this purpose, the trader would have generated a powerful marketing tool that can in an instant of visualization, convince any prospect of the viability of the signals used to produce such trades.  Usually, the forex demo account has to be synchronized to a third party service such as Myfxbook to provide a source of verification of all results obtained.

d)    Source of Technical and Fundamental Analysis

Some forex demo accounts are sources of technical and fundamental analyses as provided by the brokers. There are brokers that can provide this information through their news bar that will serve as a wonderful source of information that can be turned into profitable trades by the discerning trader. Traders need to take advantage of these tools where they exist.

You can see clearly that forex demo accounts have a lot of important uses apart from simply providing virtual money for intending traders to toy around with. They should be used in the ways described above for maximum benefits.

e) Trading in Other Markets

You can also use the forex demo account in trading other markets such as the binary options or spread bet markets. Here, the forex demo account will serve as a source of charts and various charting tools used for technical analysis. It will also serve as a testing ground for strategies used in these markets. For instance, the binary options platforms provide charts which are too rudimentary to be used in any meaningful analysis. They simply show the progress of trades, usually drawn with a line chart. A typical forex demo account will come with a fully interactive chart, complete with candlesticks and various charting tools which can be used for current as well as historical studies.

You can also use your demo account to compare pricing for an asset with what is obtainable on the platforms of other markets. This way, you can actually get the best pricing for any orders you want to place.

f) Software deployment

These days, forex demo accounts are now being used as the basis for constructing software for other markets. It is no longer strange to hear of MT4 bridges, which are ways in which a demo account based on the MT4 platform can be used to create an automated trading software, which is then linked to the destination platform for trade executions. These types of software are increasingly being developed and deployed for use in the binary options market. Constructing and testing of these software does not start with a real account: all tests and debugging are done initially on a demo account before being tested on a real account.

You can see clearly that forex demo accounts have a lot of important uses apart from simply providing virtual money for intending traders to toy around with. There is so much that can be done these days with a demo account. Demo accounts should therefore be used in the ways described above for maximum benefits.

Adam

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Adam is an experienced financial trader who writes about Forex trading, binary options, technical analysis and more.

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