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How to use a Demo Account in forex trading
All Forex companies will offer both a live and a demo account. The live account is the real account in which traders will deposit money, trade and make profits. The demo account is a form of demonstration of the company’s platform, services and over all environment which allows traders to test it before committing to an investment.
Demo accounts are free and very helpful for new comers who still haven’t found their confidence in trading, and are not yet ready to invest money. Opening a Demo account is very easy and can be done through almost any Forex broker, but there are ways to utilize the Demo account experience and gain the most of it.
Firstly many companies will have a specific amount of virtual money deposited into the Demo account for traders to trade with, but a lot of them will accept a request for the desired amount to be deposited. The reason for that is because it really helps to trade with the same amount you are considering to invest once you open a real account. With the same amount you can test the positions you can open, the leverage you will apply etc, and have a very similar experience to the one you will have with your real account. Other details can be requested too, like the type of account, and leverage to customize it to the way you will be trading live.How do I manage risk in Forex trading?
The most common risk management tools in Forex trading are the limit order and the stop loss order. A limit order places restriction on the maximum price to be paid or the minimum price to be received. A stop loss order ensures a particular position is automatically liquidated at a predetermined price in order to limit potential losses should the market move against an investor’s position. The liquidity of the Forex market ensures that limit order and stop loss orders can be easily executed.Finding The Right Forex Broker
There are a few points to pay attention to when looking for the right Forex Company to trade with.
Registration
Make sure that the Forex company you want to work with is registered and liscensed to the corresponding regulatory bodies. A registered company will have their license number up on the website, and you can check the license number on the website of the authority it should be listed on. If that does not check-up then the company could be fraud, and likely to scam you out of your money.
Prices
Each Forex broker offers different prices for each currency pair, some offer much lower prices for their pairs and that gives you the chance to trade with more currency pairs, and do overall more trading with less money. A lot more factors play into the prices, and different traders may prefer to focus on different things, however if you are a new trader, then going for lower prices will help you invest less as you start trading.
Demo Account
Forex Companies should offer a free Demo account which you can use for a period of time and get used to their platform, their customer service and experience what it would be like to be their clients before investing your money with them. Most companies offer a Demo account and if they don’t, they need to have a give you a good reason for not offering a Demo account, otherwise move onto the next one.
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