Now you know the basics, you have chosen your broker, and you are even ready to open a demo account.
Having a demo account means the following:
- You will trade on the live market
- It is for free, and you can use it as long as you want
- It simulates real trading conditions, but does not expose you to risk
- You trade with virtual currency – with no danger of losing real money
- You can test all possible trading strategies as many times as you want
- You can learn to use a trading platform at your own pace
- You can learn to read charts, follow market trends, open and close orders.
Demo trading only exposes you to virtual risk, so it does not really give you the feel of proper risk management. Dealing with your emotions is as important as dealing with your money. And a virtual world doesn’t involve real emotions to the full.
So how can you learn to keep emotions out of your trading decisions?
Open a demo account, use it to test the basics, and after a while open a real trading account fit for beginners with smallest minimum deposit and flexible leverage.
And now you may ask yourself: when is the best time to switch from demo to real? A reasonable question to which there is no definitive answer. Forex trading is a learning process the duration of which depends on the individual. Besides, it also depends on your investment needs, expectations, and the time you dedicate to it.
At XM, you can keep your demo account parallel to your trading account for an unlimited time. You have the freedom to use your demo account to test strategies, and then use the most effective ones on your real account.