Demo Account - Practice Account - Demo MT4 Account

Before beginner traders can start trading the real market, a forex beginner trader should look for a practice account which is oftenly known as a demo account. This demo account practice account is provided for free by brokers and therefore also referred to as free demo account - Demo MT4 Practice Account.

This free demo account for beginner traders is provided to beginner traders for the purpose of practicing their strategies & forex trading techniques as they learn how to trade the online market. This free demo account for beginner traders also allows the beginner traders to practice on the trading platform software that they will be using for online trading that is known as MT4 forex software until they become familiar with its operation, as well as the execution of trades using this MT4 software and how to navigate the MT4 forex platform and the charts that are within the MetaTrader 4 platform.

Demo MT4 Account Practice Account - To start learning forex using demo online practice accounts, beginner traders need to start with a demo account, these demo accounts are similar to the real accounts in terms of the actual trading software as well as execution conditions of orders, the only difference is that for a forex demo account - a trader does not need to deposit any money when it comes to the demo account. The money used in the trading for beginner traders demo account is virtual currency, and it is not real money: forex trading for beginner traders demo practice account is used to simulate real money trading without risking money.

Online Demo Practice Account - Learn Software with a Free Demo Account

The demo account will have a virtual balance of $5,000 or $10,000 or $50,000 or $100,000 and a forex demo trader can choose the amount of capital they want to practice trade with. The demo account example illustrated above the virtual balance of $100, 000 as shown above on the MT4 Transaction Window and a starter trader can use this $100,000 virtual balance for forex currency practice trading - Demo MT4 Account Practice Account.

Remember the trading Practice account is a free account and because learning Forex might take some time, forex brokers provide this as a way for beginner traders to study Forex trading and begin without depositing real money.

Beginner traders should also look for an unlimited time practice account to ensure that they get enough practice time until they are ready to invest in the live market.

The main purpose of this practice account is to allow to beginners access the real market as other traders participating in the online market with real money, only that the difference is that the funds used in a forex demo account are virtual funds that are risk free, but everything else, from the software, forex trade order execution, forex spreads and forex currency price movement are the same as of those traders transacting the live market.

As Forex popularity grows and more financial instruments are introduced to be traded alongside forex currency pairs, these demo accounts can also be used to practice online trading on these new added financial instruments.

Commodities: GOLD & SILVER

Futures: CORN, WHEAT, SBEAN

Energies: NGAS, OIL

Stock Indices: DOW, NSDQ, SP, NK,DAX, FTSE, SMI, ESX50 & CAC

These financial instruments that are also gaining popularity in the online spot market, can now also be traded on the online demo account practice account - Demo MT4 Practice Account. These financial instruments are popular because they are used to hedge currencies trades as well as provide additional financial instruments that can be traded online so as to diversify the portfolio of investors and online traders. These financial instruments are traded like this; when there is not enough liquidity or volatility in market then investors and online traders look for this liquidity and volatility in these alternative financial instruments. The popularity of these financial instruments also means that these financial instruments have also developed trends that can be analyzed just like the trends found in currency pair charts.

This type of demo account is meant to serve the following purposes in forex trading:

Learn Platform - Demo Platform Training

The first thing that a practice account is supposed to do or is supposed to be used for is to study the ins and out of the trading software that your broker uses, a good example of a software is the MT4 platform. Once you register for a demo practice account with a broker and download their trading software, you'll need to train on how to trade forex currencies using the trading platform you have just downloaded. Learning to operate this trading software is especially crucial for beginners who don't have any knowledge of the market. If a beginner trader were to start directly investing with real money without knowing the working of a platform they can easily make a mistake by pressing the wrong button key or placing the wrong trade order by mistake without even knowing.

Learn Order Execution and Setting Trade Orders

Beginner traders won't know the difference between a limit order & a stop order, new traders will also not know when to buy or sell or which currency to buy and which currency to sell especially considering the fact that forex currencies are transacted in pairs and buying of one currency is also the simultaneous selling of another, a concept that can confuse a forex beginner trader, therefore, the need to start with a demo practice account until the time that they get to know which currency to buy and which to sell and when to buy and when to sell.

Test Your System & Trading Strategies

A forex demo practice account is a perfect ground for testing your system and strategies, As a beginner trader the first thing you need to have before you start trading online is a system that is based on Forex strategies. After coming up with your trading system you will use this trading for beginner traders demo account to back test your trading system or what was anciently known as paper trading, this demo account trading is similar to the paper trading method only that it does not use pen & paper but the technique of backtesting is what is similar to that of paper trading method.

Until the time you start winning more on your practice trades only then - you can then consider to invest in your real account. Starting with $1,000 or more is recommended, it's best to save your money upto at least $1,000 dollars that way you've a fair chance of succeeding as you will not make the number 1 mistake in Forex trading: undercapitalization. In fact the more well capitalized your trading account is the better, you can begin with $5,000 dollars, $20,000 or $50,000 - just make sure you have enough capital to begin trading with.

Ask yourself why most free practice trading accounts are set at account balances of $10,000 or $50,000 because the more well capitalized a account is the better the chances to succeed, because these accounts won't be undercapitalized.

Trading Practice

This demo account - free practice account is a type of account offered by online brokers as a way to introduce beginner traders to their trading software platform & methods of trading orders execution. This where you forex practice until such a time when you can make profits on this demo account and then afterwards you can trade the live market.

The free demo account for beginner traders is a great way to get started and learn the specifics of online trading with no risk of losing money and at the same time you can get to know the execution techniques of orders and test various strategies for free.

Using a forex trading for beginner traders demo practice account is the best way to gain knowledge on how the market works and to help you in the understanding of the actual trading process. A good trading software platform to use for opening a forex demo account and trade with is the MT4 forex trading platform which is simple to learn - the learn MT4 tutorial section which also includes the how to use MT4 demo account tutorial is also provided here on this Learn Website, under the right navigation menu you might want to read the how to use MT4 tutorial before opening a software.

By using demo accounts, a starter trader has the opportunity to learn executing forex trade transactions without risking their own money. The broker will set up a demo practice account for you for free so that you can test their trading software, their execution - execution is considered by most investors and traders as an important aspect when choosing a forex broker, No Re-quotes Execution Policy is the best execution method of orders, many forex order requotes will mean sometimes investors not getting their orders executed, or if the orders are filled/executed they will be executed at a price that is not better than the one previously quoted plus the fact most online traders just hate being requoted. Imagine trying to place a forex order instead of the order getting executed instantly you get requoted, then you have to put another confirmation order, if you get requoted 5 times you'll have to place 5 other confirmation orders, plus the original order. A No-Requotes Policy for order execution is the best option to select from.

There are many advantages of using an online demo account, the biggest advantage is having the time to figure out how each trading platform works, how to navigate the trading software & know what each function does. On top of that you can use the online demo account to test your strategies to see if they work before switching to the real market.

Many beginner traders find that by putting the knowledge on this learn site to work on a free practice account, they get a clearer understanding of what to look for before, during and after each trade transaction. These learn trading topics are aimed to teach every aspect of online trading, most beginners just learn about; a Forex system, how to generate trading trade signals and then begin investing on the real market, well it takes them less than a month to lose their invested capital. After all these beginner traders did not study about forex money management topics under key concepts tutorials, neither did they read about forex draw-down and maximum draw-down, and the best of them all LEVERAGE. If you have no idea what leverage is don't open a live account until you do.

Even the experienced investors and traders will also test the demo accounts of other online brokers, especially if they want to change their broker. This is done so as to help them get to know more about the execution of the new broker and also study the new software of the new broker. Nowadays most traders just learn one software, the MT4 forex software, which is provided for download by all brokers for free so when a trader moves from one broker to another they will still use the same software without the need of learning a new software all over again.

The purpose of the demo account is to familiarize the beginner trader with the various methods of analyzing chart price movements and orders execution - it provides beginner traders with examples of how the market works without the risk of losing cash. A beginner trader can also learn how to execute orders and how to analyze forex currency pairs and when and how to open a forex trade transaction, how to read a forex currency quote, how to navigate trading price charts so that they master the various platform transactions before progressing to trade the live market.

Looking at the chart below a beginner trader would not know how to trade or execute a forex trade transaction if they were to start trading immediately. A forex beginner trader would almost certainly lose their money because they will not know what they will be doing. This is why all beginner traders start with a trading practice practice account provided for by their broker for free so as to practice on the platform software risk free using a practice online demo account before opening a live account.

Practice Account - Learn Charts using a Practice Demo Account

Learning the forex broker's software

Because different types of online trading platforms are provided to investors like the ones listed on this page; all brokers will have demonstration accounts with which a beginner trader can use to learn the new software & about the various trading tools provided by the broker on the software.

Web Based Platform - Traders can Learn this Trading Software with a Practice Free Demo Account

Looking at the above examples - a trader would require to familiarize themselves this new software afresh before beginning to use this new platform - a trader would then open a forex demo account & use it to learn the new platform.