What is a Forex Demo Account?

forex demo account

Online trial accounts that allow investors to know both the forex market and the forex company with free virtual money are called forex demo accounts. Thanks to the Forex demo account, investor candidates gain experience in this market by trading in foreign exchange, commodities, stocks, and indices. Investor candidates can decide to open a real forex account with this experience they have gained.

Why is it Important to Open a Forex Demo Account?

It is very important to open a forex demo account for investor candidates who have not traded in the Forex market before. Promising high profits with the effect of leverage ratios, the forex market also contains various financial risks. While high profits can be obtained from instant price movements in the traded parities, various losses can be experienced from inexperienced transactions. Therefore, it is advantageous to open forex demo accounts before opening a real account. All the risks and profit opportunities of the market can be analyzed thanks to forex trial accounts directly.

Advantages of Using Demo Accounts

There are many advantages of using forex demo accounts;

  • Testing the market without depositing real money with free forex demo accounts
  • To learn the MetaTrader 4 (MT4) platform used in Forex trading
  • To be able to follow real market prices instantly
  • To be able to apply fundamental and technical analysis methods to transactions
  • Testing the use of forex indicators
  • To create the most appropriate trading strategy
  • Become familiar with forex terms
  • Testing the speed of the platform, which plays an important role in choosing a Forex firm
  • Such as getting detailed information about the company by contacting the company that offers Forex demo accounts

Are the Prices Showing Correct in the Forex Demo Accounts?

The prices in the Forex demo accounts show exactly the same prices as the real market prices. Whatever the current exchange rates are, the same rates appear in the forex demo accounts. Therefore, everything seen in these accounts, from the assortment to the charts, is completely real. Unlike the real account, the Forex demo accounts only have virtual money instead of real money. For this reason, neither profit nor loss can be made from the trading transactions made in the forex demo account.

Is Opening a Demo Account Mandatory?

Investors who want to trade in some forex companies by opening a real account in the Forex market must open a demo account first under the CMB legislation. Investors must open at least 50 trades in the forex demo accounts, and these trading transactions must be continued for at least 6 working days. With this regulatory rule, investors can see all the risks of the forex market and decide to open a real account more easily. During the real account application, the customer representatives check the demo account transaction time and the transaction amount of the investor and proceed to the approval stage.

How to Open a Forex Demo Account?

Forex demo accounts can be opened with banks and licensed forex brokerage firms that offer transactions in derivative products. To apply for a trial account, registration is created by entering the name, surname, telephone, and email address information on the website of the relevant company. Then, the meta trader 4 platform can be installed on computers or mobile devices via the platform upload link in the email sent to the email address. The username and password used to log into the MetaTrader 4 platform are available in the email. By filling in the required fields, the forex demo account opening process is completed.

SEE ALSO: 10 Golden Rules for Implementing Forex Strategies and Successful Trading

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Caroline Tetra

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