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What is a demo account?

A forex demo account enables a trader to simulate a live trading environment - without putting any real money at risk. It enables a trader to start free online trading relatively quickly, so that they can practice trading before risking real money.

All forex traders should use a forex demo as their first forex account to get a feel of what trading the currency market is like, as well as to get used to the broker and the trading platform they are using. Essentially, it enables traders to practice their trading skills along with quite a few more enticing benefits.

Benefits of demo account

If you speak to any seasoned trader, their list of demo trading account benefits would be endless for traders who are first starting out. Here is a list of just a few of the benefits you may want to know about:

Learn how to trade forex without risk

Owning a Forex practice account is like having free forex training. That's because it enables the trader to put their training into practice, without risking any real money, by trading with virtual funds instead. After all, the most successful people in any field are those who have learnt and practiced their craft considerably - and the same goes for forex traders.

Familiarise yourself with your trading platform

Most forex brokers offer the well known MetaTrader platform. By opening a forex  demo account, you can familiarise yourself with the trading platform by making trades without putting real money at risk. In this way you get to learn about how to take a trade, how to close a trade, and how to use different tools to your advantage, like different order types and trading indicators.

Learn to manage your emotions

When it comes to risking money to make money, a lot of emotions can come into play. Euphoria and overconfidence can kick in after a few winning trades. Frustration and doubt can kick in after a few losing trades. These emotions can often cloud the trader's judgement on their next trading opportunity.

Trading on a forex demo account helps you to identify these emotions so you can build a routine and plan around dealing with them. Most beginner traders don't know what kind of emotions they will face when winning and losing, so it's probably best to find out without risking any real money.

Create, develop and test your trading strategies

The demo account is by far the best place to test anything new you have learned about concerning indicators or strategies. You may also start to recognise your own trading patterns after some time has passed, and you may even start to develop your very own trading system. Having the ability to trade risk free often enables traders to be more creative in terms of testing and finding out what works best for them.