If you have tried opening an account as a newbie on various trading platforms then you have come across the forex trading account. Not all trading platforms offer this account type but a decent number have it to cater to the needs of beginner traders.
As a trader, the demo account needs to feature on any brokerage site that you are considering. Let us have a deeper look at this account type.
What is a Demo Account?
A demo account features among the account types though it is not a real trading account. Some sites have it as a trial account. Just as the name indicates, it is for demonstration purposes. If new to the trading concept, you first sign up to it and get orientated to the financial markets trading.
It has simulated trading condition similar to a real or standard trading account where you can execute your trades using virtual funds. The mimic to the real conditions of the financial markets helps you get the skills necessary to start your trading stint.
Demo account is a stepping stone toward standard and professional trading and is now a common feature on most credible platforms. Some accounts have a time limit on its use, usually a month or maybe longer. ETXcapital gives 14-day period for use of its trial account. Others such as Liteforex have no limit on how long you can use the account. This is the better option when you look at how significant a demo account is.
The Signing Up Process
Signing up to this account type is very easy. On the sign-up page of the preferred brokerage platform, specify this account type. You then need to provide details such as your email and other personal details to sign up. Once through you can log in and start your training stint.
For other platforms, when you sign up to the site, you are automatically signed up to the trial account to get oriented to their mode of operation. This is true more so if they have a unique mode of operation.
If you feel you are ready to trade you can hop any time to the real trading platform. Another thing to note is that most of these trial platforms are free for use and do not require you to make an initial deposit to benefit from its services.
Significance of Demo Account
You can use the demo account in various capacities as summarized below.
#1. Training Purposes
This is the main purpose of the demo account. It is meant to introduce you to the trading concept where you practice in a loss-free environment. As earlier indicated, the trading environment is simulated to ape the real trading conditions in addition to having virtual funds that you use to stake on trades you are interested in.
Some of them have guides that you follow to execute your first trade as you proceed in grasping other concepts the platform offers such as copy trading and use of robots.
#2. Refresher Tool
If you have taken quite some time without trading, then you may lose a grip on this concept. There is no need to worry if you think you are lagging when it comes to trading as with the demo platform you can refresh your skills. You can learn of the new trends in the industry and get back to your feet in the market.
#3. Coming Up and Testing New Strategies
In the financial markets, a strategy is key to you having a successful stint. As such you need to constantly come up with new approaches that will help you execute winning trades. You can use the trial platform to come up with new trading strategies while at the same time testing their potency.
As the environment is simulated, you do not face the risk of losing your funds by testing out a new approach. It also enables you to see which gaps you need to fill before replicating the strategy to your real account.
The demo account is a significant account type that you need to look for before signing up with a trading platform. It comes to your aid in introducing you to the trading concept and also for trying out new strategies for a successful stint at the financial markets.