Ever wondered why so many people and forex traders use forex demo accounts? What is so special about these demo accounts? Well, there are a a lot of things that you need to know about forex demo accounts. There are thousands of brokers that offer demo accounts like avafx demo account, alpari demo account, fxcm, plus500 and many others. Let's see what are the benefits of these demo accounts and why forex brokers offer free demo accounts to their traders.

Benefits of forex demo accounts

  • One of the main functions of a demo account is to learn what is still unknown. For new forex traders, they can learn a lot of things from their demo account. A demo account is like a very first stage for them. What they can learn? Well, new traders can learn different concepts, forex terminologies, how market moves, how prices moves, how to use forex charts, how to use fundamental analysis, how to use signals, how to use trading platforms, how to trade, how to place orders, how to read technical charts and a whole lot of different new things that are related to the forex market.

  • Experienced and professional traders also use demo accounts for learning purpose. I mean, when you know nothing about a broker, how could you risk your capital? So those traders who are experienced ones and want to switch broker, they use demo account for a short period of time to see whether they will fit in or not. These traders view broker services from an advanced technical view rather than a basic overview.

  • A forex trader, a relatively new forex trader, operates demo account without any fear of losing money. Since these demo accounts are free and do not need any funds rather the money used in demo accounts is virtual money. Brokers offer their traders with a very high virtual limit some times up to $100,000,000. So as a trader, you can freely trade with such a big amount especially when there is no “fear of losing money” involved. This way, you can actually judge your skills or I must say trading skills because in the real market when you trade with real money, you have fear of losing money in your mind and this fear make things worse for you. Trading under pressure of fear and trading without any pressure are two different things. So to judge and evaluate your trading skills, and to see how you behave while trading with virtual money, you need a demo account. Then you need to polish and use these skills in the actual market while trading with real money.

  • Apart from learning, a demo account is indeed very helpful for those who want to trade in the real market without investing or losing their money. I mean, if you are curious as a finance student as to how things work in the actual forex market, you can use a demo account. So it is not necessary that you use a demo account only if you plan to convert it into a paid one – no. Anyone can use demo accounts and can explore the actual forex market.

  • As a trader, forex demo account will help you in case you want to practice a new strategy or if you want to see how effective is a new strategy. And it is recommended too to always practice a new forex strategy, that you are trying for the very first time, with a demo account. This will keep you safe from losing money. It is very risky and unwise to use a forex strategy for the very first time at your forex account without practicing it. And for practice, you must use demo account, not your original account.

  • Forex demo accounts are also very useful for small traders who are trading with sheer capital and want to invest a large amount of capital. They can actually use demo account to see how good are they with large trades and lots. There is a lot of difference in trading strategy when you trade with $5,000 and when you trade with $750,000. So those traders who want to fund their account with more capital normally use forex demo account with fairly high limits to see how they manage and trade with high limit and lots.

  • Last but not the least, demo accounts are beneficial in case if you want to try new things. For instant, if you want to try a new trading platform, you can use a demo account. If you want to try a new technical chart, try demo account. If you want to see the strength of a forex signal, try a demo account.

Almost all the best forex brokers offer a free forex demo account. Most of them offer it for 30 days. Now that you know (I assume) that what are the benefits of using a forex demo account, I suggest you to keep using demo accounts every now and then to try and learn new things. The more you will try, more you will learn, and learning will make things much easier for you in the long-run.



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