Table of contents:
- 1 Forex Demo Account 2020: What do you need to know about it?
- 1.1 Differences between forex trading demo account and live account
- 1.2 Forex Demo Account Comparison: Not every broker plays for long
- 1.3 Access to the trading platform
- 1.4 Time constraints as a criterion
- 1.5 Amount of the balance
- 1.6 Fees for the broker
- 1.7 What about the analyses?
- 1.8 Data collection and calling the sales department
Forex Demo Account 2020: What do you need to know about it?
Retail Forex brokers have enriched the industry with a customer-friendly innovation: Nearly all FX brokers offer a free demo account to customers and prospects.
“Paper Trading” not only provides a non-binding insight into active trading on the FX market.
The virtual capital can also be used to test strategies and conduct experiments parallel to “real” trading.
With some providers, however, Forex demo users must expect outdated prices, limited access and annoying phone calls.
Nevertheless, finding a provider with a Forex demo account is a good idea, and not only for beginners.
Differences between forex trading demo account and live account
Traders should be aware that every Forex demo account also serves the interests of the broker who offers it. Unless explicitly stated otherwise, the conditions will differ to a greater or lesser extent from those in the live account. Spreads may be narrower, which has a positive effect on the results (only achieved on paper).
The more precisely the possible differences are named, the better. FXFlat, for example, highlights possible differences between live account and forex trading demo, especially regarding exotic currency pairs. In the notes to the demo account, which have to be taken into account before its activation, it is stated: “Due to the illiquidity of some of these markets, GFT Global Markets enables its clients to trade on the demo system via a price input, which generates indicative prices and possibly displays prices that cannot be traded live. Therefore, for example, a 5 million trade in an exotic currency in a “live” account may be virtually impossible, and a corresponding trade in “demo” mode may not correspond to the real world”.
But what exactly does a Forex demo account actually do for the trader and also for the provider? First and foremost, of course, it is important to know whether a demo account makes sense at all, especially in the Forex sector. If this is not the case, traders could also fall back on completely different providers who do not have a demo account in their offers. In fact, more and more traders are deciding to give the demo account at least some decision-making power when it comes to finding a broker. Many brokers are well aware of this responsibility. Again and again they are compared with each other.
- Admiral Markets,
generally belong to the brokers for different types of trading, which often perform well in the tests, even if fraud is often suspected. The tests therefore not only refer to the offers of the brokers but also to whether they are serious. So, before traders open an account, make a deposit, and create a balance, it may be a good idea to take advantage of a test and take a look at the offer of a Forex demo account.
For the trader, such a demo account offers the opportunity to get to know the trading platform and Forex trading without any risk, test different strategies and get a feel for the trade. Especially when looking for your own strategy, it is important not to put all your eggs in one basket. Instead, traders should take the time to test different strategies and then perfect them. In order that the balance does not shrink in this way, it is advantageous to be able to use a Forex demo account.
Also for the broker such a demo account has of course its advantages. The relationship of trust between broker and trader is a thin topic icon knowledge_varianteBand, which must first be built up at leisure. Here is partly much money in the play. By the offer of a demo account the broker can create a basis of confidence and win the customers for himself. Many brokers also attach conditions to the use of a demo account. Both in Forex and CFD trading, there are brokers who provide the demo account only after a registration and a first deposit.
Using a Forex demo account can have several advantages for traders and brokers alike. Therefore, it may be worthwhile for the trader to look for a provider that offers the Forex demo account.
Forex Demo Account Comparison: Not every broker plays for long
If a demo account is to be used parallel to the live account, its unlimited activation should already be taken into account when comparing brokers. Many platforms only provide practice accounts for a limited period of time (usually about two to four weeks). For example AvaFX. There it says that the use of the demo account is possible for interested parties until they are able to open a live account. However, a time limit is not mandatory, as a look at other brokers shows. Admiral Markets, for example, provides an unlimited Metatrader (MT-4) demo account for FX and CFDs (see also Open CFD demo account).
Users only need to log in once a month to prevent the automatic deletion of the account (including all results). Plus500 also has no time limit – the broker also assures an “exact match with real trading conditions”. This is by no means standard. Whatever the reason, some brokers operate a downright “secrecy” around their platforms and only provide demo accounts with outdated prices (sometimes weeks or months in the past and completely static). Trading is always associated with a risk. Traders can lose their invested capital.
When comparing Forex demo accounts, it quickly becomes clear how different the terms of the demo accounts actually are. Traders who would like to benefit from a demo account for the entire duration of the broker account do not have much choice.
Traders should pay attention to this when choosing a Forex demo account
Traders who have decided to take advantage of a Forex demo account should follow a few pointers when looking for a provider. Below is a summary of the most important points that are important to the trader.
Access to the trading platform
Whether MT4 or perhaps a trading platform developed by the broker himself – the platform is the most important basis also for Themenicon WissenForex trading. So if you are looking for a Forex demo account, you should make sure that the demo account also guarantees access to the trading platform. Some providers do not offer the possibility to really use all features of the platform. This is of course, especially with regard to the trading platform, not an optimal solution for the trader.
Time constraints as a criterion
As already mentioned, there are some providers where the Forex demo account is only available for a certain period of time. This demo account can then be used for a few days, weeks or months. Some brokers also simply limit the available play money. They make a certain amount available. If this amount is used up, the account can no longer be used. Sometimes the brokers still talk to each other and refill the play money again. But this is more the exception than the rule. Basically, it is of course optimal if the Forex demo account can be used indefinitely. Not only with the first steps in Forex trading is it finally a good help. It can also be very useful for experienced traders who want to adjust their strategies.
Amount of the balance
From 100 Euro credit up to 100.000 Euro credit, everything is included. The brokers use the credit balance for the Forex demo account in different ways. Therefore the assets belong also to the points, which should be considered with. Usually it is already explained before the registration, how the assets on the Forex demo account are composed. This can be a fixed amount that each trader receives. However, it can also be an amount dependent on the deposit. This means that if the trader deposits 100 Euros, he will also receive 100 Euros play money or maybe twice the amount of money available for the Forex demo account. Depending on the purpose for which the demo account is to be used, a high balance is of course always the better choice.
Fees for the broker
The Forex demo account without registration is very rare nowadays. Every broker would like the trader to register first, topic icon bonusbebefore the demo account is made available free of charge. Although there are still some demos without registration. Here however an intensive search is necessary. Whoever would like to use a Forex demo account should also keep an eye on the fees that arise when closing a trading account with the respective broker. Transparent fees are a prerequisite for a good broker.
What about the analyses?
Also in Forex trading, analyses and news from all over the world are an important basis for fast and effective trading. The ideal Forex demo account does not make any concessions here, but offers full access to all analyses and provides the latest news. This has two advantages for the trader. He can get an overview of the different types of analysis and learn how to use them for himself. At the same time he can learn how the news can influence trading.
There are very different points that a Forex demo account should ideally serve. From free and preferably unlimited use to full access to the trading platform, everything is included.
Data collection and calling the sales department
Contact Most brokers also require interested parties to provide full name, address and – depending on the provider’s country of origin – information on trading experience and financial background in order to activate a demo account. Legal reasons are, however, only of secondary importance. Relatively short time after opening the demo account the telephone usually rings and the sales department of the broker starts its “Welcome Call”. For beginners this is a customer-friendly service, because the call center agent can help with comprehension problems and explain the functionalities of the platform. However, experienced traders who are only interested in the demo account function may feel annoyed by the calls.
There are also big differences in the market with regard to the questions asked when opening a demo account. With the test account, some people are not even asked for their first name and postal address, but are satisfied with an e-mail address or a social media account. However, a telephone number is also required. A tip for people who don’t make many calls: If you accidentally enter the number of your rarely used second cell phone, you usually don’t have to worry about the demo account being blocked.
So if you are interested in using a Forex demo account, you must be prepared to enter your personal data here. Only with few providers is the query waived. However, the idea of giving a wrong phone number can quickly backfire. Many brokers make a first welcome call. If they then discover that the phone number is incorrect, this can lead to the account being blocked.
It is not uncommon to provide data for opening a Forex demo account. If you want to use a demo account, in most cases you must also be willing to leave your address and phone number.