FOREX TRADERS

[mackvick]

Tips to Keep in Mind While Trading in a Demo Account

The largest financial market in the world is the foreign exchange market or the forex or the FX market. People from all over the world can take part in forex trading and buy or sell currencies of various countries. It does not matter what your trading experience is, you should always have a demo trading account. You can find a number of brokers and prop trading institutions as well, that enables you to practice and hone your trading skills. There are a number of advantages of having a demo account. If you are a novice trader, it assists you in trading, and also, this is also very good in the long run. Here are some tips discussed in this article that may help you to get the most out of your demo trading account.

• Demo funds
As you are going to trade in the forex market, you may have already made up your mind about what your trading equity will be. So when you trade using a demo account, always make sure that there is less difference between the funds that you use in your demo account and the money that you are actually going to use in your real account. For example, if you want to begin a trade using 600 real dollars, then you should do the same with your demo account. In this case, it will not make any sense if you trade in a demo account with 6000 dollars.

• Leverage
While choosing the leverage, make sure that you use the same leverage in your demo account that you are going to use with your real trading account. Another thing that you should keep in mind is that – open a demo account with the same broker with whom you want to trade with real funds. This way, you can stay assured that all the trading conditions such as spreads, swaps and order levels are the same across both demo and live trading accounts.

• Stick to a particular trading strategy
A trading strategy mainly depends on two things- how good you are in making strategy and how good an understanding you have of that strategy. You can make great profits if you have some experience in money management. It will be an added advantage if you know how trading strategy works. Once you choose a trading strategy, no matter how well or badly your demo account performs, you should stick to that trading strategy for at least 60 days. If you change your trading strategy just because you have made losses, it will make no sense and you will land back at square one. So you have to go with it. Once the 60 days period is over, you can then review the performance of your trading strategy on the demo account.

In honing a trader’s technical skills, a forex demo account can be undeniably useful. The main purpose of a forex demo account is to help people trade more smoothly with forex.