You're probably here because you know how important it is to practice with a demo account: it simulates real-time trading, which lets you learn to trade without risking real money. Your next step course of action is to learn how to open a Forex demo account step by step, and that's what this article will supply you. This will be your guide to get you started, and it includes all the information you should know about opening a demo account.
What kind of demo account do you need?
Before signing up for a demo account, you first have to know what kind of platform you're going to be using. Since brokers provide different ones that vary in purpose, you should be aware of what's best for the financial instruments you plan on trading.
Some trading applications offer limited features, which can be suited for certain assets that don't demand much price action analysis. Others are excellent for purely technical trading. But you don't have to stress over this for now, especially if you're just starting.
A popular choice among Forex traders that you can go for is the MetaTrader 4 platform or MT4. It's easy enough to set up, and there are plenty of resources online if you encounter any issues or problems with setting up.
Here's a video that we've created to show you how you can download and install the MT4 right away.
What is the information required for opening a Demo Account?
In some cases, when you sign up for a demo account with a broker, you have to provide some information about yourself before they give you access to their platform. So in this section, we've listed some key details that your broker may ask from you if you open a demo account with them.
Here is the information that they will typically ask you for:
*This can vary from company to company.
How much can you trade with a demo account?
Now, the amount of "practice money" in the demo account will be predetermined by your broker, but some brokerages grant you the freedom to choose a preferred amount.
Pro Tip: Just remember that if you have the option to choose, it's better to select an amount that matches the amount of real money you intend to trade on a live account.
Accessing your demo account
After signing up, you'll receive an email with a link to either download the trading platform (usually the MetaTrader or the proprietary trading software of your broker, if they have one) or a link to the web-based platform.
In some cases, if the trading platform is a little advanced, some instructional videos for navigating it will be emailed to you as well.
What's inside a Forex demo account?
The MetaTrader 4 will look something like this.
This is going to be the same platform on a live account. Normally, upon installing your MT4 for the first time, you'll have a grid of charts in the broader area of the window, and the list of tradable currencies will be on the left (called the Market Watch).
If you want to learn more about the basics of using MT4, we have written an entire article about it.
The "terminal" which shows information about your account, trading history, mailbox, alerts, and other stuff is at the bottom.
With other brokers, like Forex.com for instance, will have a web-based platform that looks like this:
Tips for mastering the Forex trading platform
1. Play around with it
Perhaps a jump to familiarization is if you tinker with the platform aimlessly. Be curious enough to explore the trading application's features and capabilities.
2. Click all the buttons
Another way to get comfortable with the trading platform is to channel your inner Dee Dee when she's inside Dexter's Laboratory.
"What does this button do?"
And, don't worry about anything because there's no Dexter to stop you. Once you know what each button does, you'll no longer feel intimidated by the software and the whole process.
3. Start opening some trades
Now, the last tip is for you to open some trades. Since your using virtual funds, you don't need to worry about blowing up real money.
Right-click on the chart and hover over to "Trading" and select either BUY LIMIT or SELL STOP or press F9 to place an order and close open trades if you have to. The objective is to gain confidence in navigating through the platform.
Things to remember with Forex demo accounts
1. No fees
Demo accounts are free, and it should be that way because it's one way to experience working your broker's platform. If a company asks for payment just so you could access their demo account, be sure that they're not running a scam because demo accounts are usually for free.
2. Trade entries might be different
When you place trades in a live account, it may not be as quick as it is in the demo since your broker isn't filling any actual orders from you. Or, in other words, your broker isn't connecting you to other buyers or sellers in the market; therefore, prices will be executed as you had set it.
3. Prices may be delayed
With some brokers, their demo accounts are delayed, which means that you're not actually trading a currency's exchange rate at this instant. Hence, a news trading strategy formulated with the demo may be ineffectual.
Some demo accounts expire after a certain period, which is usually thirty days. What you can do is to find a broker that offers uninterrupted practice trading for at least six months.
Apart from familiarizing yourself with the platform, it would be best if you were consistently profitable with a demo account for half a year before you trade with real money.
Minimum Deposit: $50
Spread (EUR/USD): 1.1 with Standard Account
Regulation: FCA, CFTC, FSA, IIROC
BROKER: CITY INDEX
Minimum Deposit: £100
Spread (EUR/USD): 0.69 with Standard Account
Regulation: FCA, ASIC, MAS