Deciding to trade in the foreign exchange market can be overwhelming at first. There is a lot of information to learn and research to be done. One of the advantages to trading forex is the ability to trade for free via a demo account.
You canbegin trading in the forex market for free by using the same state-of-the-art software packages that professional Forex traders are currently using to make real-time, live currency trades. Demo accounts allow you to experience the same dynamic market action and go through the same process of making decisions based on breaking news, reacting to charting patterns, and tracking ones performance.
Without putting real money into an account you can see how the market reacts and behaves. Demo trading allows new forex traders to gain a greater understanding of trading currencies, what is involved and how the system operates. You will be able to see how Forex transactions are placed and become more familiar with trading procedures. For example, with a demo account you can see how to place Market, Limit, Stop, and OCO Orders all without any financial risk. The money used in a demo account is imaginary but the trading experience you will acquire is real.
Making big gains in a demo-account does not mean you will make big profits in live trading. However, by getting familiar with a demo account you can obtain learning experience. The next step will be to develop your trading strategy.
Once again your mini-demo account will come in handy. You can try one of the trial charting packages from the broker you choose or brokers as you may find it helpful to work from several different providers at first. The demo software will provide the necessary indicator tool you need to try different trading strategies. The demo account software will allow you to start drawing trend lines, mark support & resistance levels, monitor moving averages, etc. You will learn how to properly place an order. Experiment with a demo account prior to entering the market with real funds so that you don’t pay for your mistakes with real money.