- 1 What is a Forex Demo Account?
- 2 What Type of Account Your Want to Open?
- 3 How to Open a Free Forex Demo Account for Beginners?
- 3.1 Step 01: Choose a Reputed Broker
- 3.2 Step 02: Open a Forex Demo Account Through Your Broker
- 3.3 Step 03: Select the Platform
- 3.4 Step 04: Set up Trading Terminal to Connect with Live Market
Forex is short for the term ‘foreign exchange.’ The foreign exchange market, aka the forex market is a pretty old concept in business and finance, almost as old as the origin of national currencies. But it’s been accessible to the general population pretty recently. It’s currently the largest market in the world.
The general population got introduced to the idea of forex at the beginning of the decade when the internet was introduced in the ’90s. Unlike the past, now numerous retail forex brokerages accept individual traders.
As in, literally anyone with an internet connection and a small amount of start-up fund. And voila! You can trade currencies! Nowadays, opening a forex trading account is just as simple as opening a bank account or any brokerage account. Here’s a step by step guide on how to open a free forex demo account for beginners.
What is a Forex Demo Account?
The forex demo account is a free trial version of a permanent forex account. You can deposit fake money on it to experiment with the trading system without taking an actual risk.
It is best practice to place at least 50 demo trades to develop an understanding of how some critical features, such as ‘stop orders’ function. Forex demo accounts can help amateur traders learning how popular platforms record their transactions for tax fees.
Demo trading is definitely not the real thing, as the name suggests, but it helps beginner level traders prepare for trading in live accounts.
What Type of Account Your Want to Open?
Not all type of forex accounts is suitable for you. There are small-scale accounts with a low minimum fund for beginners at the same time; there are accounts with advanced features made for experienced traders.
There are three major categories of trading accounts. These are – standard accounts, mini accounts, and managed accounts. Each of them comes with
its own collection of pros and cons.
Which sort of account is suitable for you depends on several factors like how much risk you can take, how much capital you can invest in the beginning, and how much time you’re willing to spend trading on the forex market every day.
You have to pick a type of account that suits you best according to your experience, knowledge, interest, and skills.
Usually, general people start up with a standard account that has a leverage of 100:1 and a notional value of a lot size of up to $100,000!
A more suitable choice for beginners is the mini account option. It has a reduced max lot size value of $10,000. If taking risks isn’t thrilling for you or if you are on a fixed income, you can go for a mini account.
A managed account comes with some extra charges but also with a professional-looking portfolio manager for more experienced users.
How to Open a Free Forex Demo Account for Beginners?
The account opening procedure is not complicated at all, but the traders will demand some info and a minimum amount of funds for starting up.
You will need to provide some information in an application form about how well you know the forex business, how well you understand the market, what kind of trading experience you have, and why you are entering the forex trading business platform. You’ll be required to deposit some money to activate your account and provide them some proof of identity.
The steps of opening a demo forex account will differ from brokerage to brokerage. It will not be exactly the same in every brokerage. But the basic steps that every brokerage demands are stated below.
Step 01: Choose a Reputed Broker
You have to know how the forex brokers work so that you can choose honest brokers over the unreliable ones. It’s best practice to take advice from someone who is experienced in forex trading. And it’s best to go for the well-known and reputed brokers.
Step 02: Open a Forex Demo Account Through Your Broker
After choosing your broker, enter their website to select your account type. Then you have to fill out an application form.
After submitting your form, you’ll get a username and password for your demo account. Sign in to the broker’s client portal. Transfer some of your bank account funds to your brokerage account via check, credit, or debit card or wire transfer. To be noted! If you use a credit card, the bank may charge you some interest fees.
Step 03: Select the Platform
Follow any special instructions or rulebook that your broker provides for using the trading platform. Some of the popular Forex trading platforms for beginners are – Plus500, Markets.com, eToro, Saxo Bank, easyMarkets, Admiral Markets, City Index, etc.
Step 04: Set up Trading Terminal to Connect with Live Market
At the top of the platform, there are some shortcuts, tools, and settings. Under these options, there’s a charting window to see the previous price history of currencies and assets. You can find the terminal below the charting window. There are several tabs in the terminal with access to account history, notice board, and recent trades. Note that every platform is different, so it’s a generalized instruction on setting up your platform so you can connect to the Live Market.
As you have followed through the article, now you have an understanding of how to open a free forex demo account for beginners. We see that getting started up at forex is just as easy as starting up any other financial account as the procedures are very similar. But keep in mind that you have to review and consider the brokerage’s services, cost-effectiveness, efficiency, and reputation before starting trading at their firm.
Any links to third-party sites, prices, analyses, research, news, or opinions are considered general market commentaries and are not considered as investment advice. If you use or rely on such information with a weak base, you can encounter losses in your profit, and FXCM (Forex Capital Markets) will not take any responsibility for this. So be careful and good luck!