Forex trading is, just as all other forms of investments, associated with big risks. There is an even balance between the chance of making a profit and losing the invested amount. It is the risky nature of trading that appeals to traders and that creates excitement, but it is always important to be as well prepared as possible in order to minimize or at least manage the risk.
The most common way to get prepared is to develop and use strategies as well as continuously educate yourself on the subject. The better you understand the market and the tools and features you use, the easier it gets to make money from currency trading.
All major forex brokers offer training and educational programs for their users. Some only provide a few articles while others have huge libraries with videos, workshops, e-books, tutorials, etc. Many of these brokers also offer in depth information about strategies and if you would like to get more information about different strategies we recommend that you read our section called “Forex Strategies”.
However, the majority of this educational material is written for traders that are already trading and that have experience from the forex market. What if you are a complete beginner and you don’t even know where to start? The solution is forex demo accounts that offer risk-free demo forex trading.
What are demo accounts?
Forex demo accounts are a fundamental part of nearly all forex brokers services. It is a special type of account that works just like a regular trading account but with one major difference. All forex broker demo accounts offer the possibility to trade currencies with virtual money and hence completely free of risk. With a forex demo account you get access to a trading platform and all the tools, analytics, and features you normally would use, but without having to sacrifice any of your own money.
It is a great way for beginners to get comfortable and gain all the necessary basic knowledge needed to actually start trading on the forex market. Forex trading demo accounts are a fairly new feature that has helped countless traders become successful without first losing big amounts of money. In a lot of ways, demo trading has created a more competitive and lucrative market.
The Top Three Best Demo Accounts
Demo Account for Experienced Traders
Demo accounts are not only for beginners. Experience traders with several years experience and an already successful career on the forex market can also benefit from a demo account.
Since demo accounts give traders access to all the tools they use for their actual currency trading, they can use them to practice on skills and new strategies. It is very risky and not so profitable to develop your own strategies and it takes a lot of trial and error to find systems that work. But by using a trading demo account you can go through the same developing process without risking anything. This means that you could even spend hour, after hour practicing on specific skills or analytic decoding.
Demo accounts are also a great feature for everyone who is searching for a new broker. Because by signing up for a demo account you get to try the trading platform and all the tools to see if it fits you or not. If you don’t like it you can just move on the next one, but if you do like it you can stick around and deposit money.
As you can see, using a demo forex account is a win-win situation for all traders and therefore also something that we recommend everyone to try.
Different Types of Demo Accounts
Today most forex brokers offer some form of demo account and even though they follow the same concept they are also very different from each other. The two major differences are how much virtual money you get access to and if the account is unlimited or not.
An unlimited account gets refilled with more money as soon as you reach a certain low. Personally, we always go for unlimited demo accounts since we want to be able to trade without risk whenever we want and for as long as we want.
In addition demo accounts can also either be free och require a minimum deposit to be activated. 90% of all demo accounts are completely free and we prefer the free ones since it kind of defeats the purpose if you have to deposit real money to trade for virtual money.
Most brokers offer at least $10,000 in virtual money but that number can be as high as $50,000. Just don’t get blinded by the numbers. The first amount doesn’t matter so much if the account is unlimited and you’ll keep getting more virtual money along the way.
In order to give you a better idea of what’s offered, we have created a list with the top three best demo accounts above. It’s a list with some of the leading brokers in the industry and the what opportunities for demo forex trading they offer. We guarantee that you won’t be disappointed by any of our recommendations.