Using Forex Demo Accounts

Even though trading in the Forex market is simpler than traditional stocks, it still takes a little time to become accustomed to how the market operates. A Forex demo account is the perfect way to gain this experience with no risk to your investments. These Forex demo accounts allow you to trade on actually currency pairs and see how your trades would have fared. They operate just like active live accounts but don’t require any capital to make your trades.

Find The Right Broker For You

To trade in Forex you’ll need to first set up an account at one of the many Forex brokers on the market. Even though some traditional brokers will allow you to also trade Forex, many investors prefer to use a dedicated Forex broker to keep their investments separate and take advantage of the unique advantages that these dedicated Forex brokers provide. One of these advantages is a Forex demo account that you can use to practice your trades. Some brokers will even allow you to set up several of these Forex demo accounts so you can try different trading strategies to find the right one to use for your actual investments. This way you can save time by trying them all at once and see which Forex demo account profits the best over time.

Understand the Limitations

Most Forex demo accounts the brokers provide will operate the same as a live account, they may not offer the same levels of leverage as an actual investment account. This makes your investing practice a little more work as you’ll have to manually figure out the additional profits that this leverage would have provided as you make your trades. This limitation is not true with every Forex broker so it’s always a good idea to compare different firms before establishing an account. Also, many Forex brokers may require you to keep a certain level of investment in your main account to unlock a premium feature like leverage on a Forex demo account they provide. They do this to make sure you are a serious investor and are happy to extend this demo leverage to their clients.

Does The Demo Account Prevent Automated Trades

The last comparison you’ll need to make when considering a Forex demo account is if the broker allows you to use it with automated trading software. This specialized software is used by many Forex investors to help them find the most profitable trades in the market. If configured correctly, the software will provide a price target for entering and exiting a currency pair for a profitable trade. Many new traders like to use a Forex demo account to test the various Forex engines on the market to see how they actually perform with trades. Making sure your broker allows this type of practice trading with a Forex robot is important if you plan to use one of these programs to trade your live account later.

Forex Bonus and Cashback

Forex trading is a great way for the average investor to make a substantial profit from a small investment in very little time. The expansion of trading in the Forex market by new investors has driven many of the established brokers to introduce programs to encourage these investors to use their services. One of these incentives involves bonus and cashback programs that will reward an investor for their trading activities.

These bonus and cashback advantages can vary wildly between brokers so it’s always a good idea to compare the various programs before making a final decision on where to invest. There are also a number of websites that can help with this comparison and actually list the brokers that are currently offering a bonus and cashback promotion. Using one of these sites can save you time and effort when comparing the various brokers and gives you a good measure of their differences.

Understand the Requirements

The key with any bonus or cashback program is to completely understand the details of the offer. Because these are very broker specific, you may have to open a new brokerage account to take advantage of them and they may also require a certain number of trades. Understanding the specifics of the program will enable you to get the most benefit. At the heart of all of these bonus and cashback programs is an effort to attract customers. If it’s your current Forex broker offering the program, they are doing it to compete with other brokers trying to convert you to a customer.

Deposit Bonuses

There are several ways that these deposit-based bonus and cashback programs typically work and the specifics will be provided on the brokerage site making the offer. One popular program involves providing you a bonus for money deposited directly into a brokerage account. This typically needs to be a new account and will also normally carry a minimum deposit amount to qualify. Some brokers will provide this type of bonus for any sized deposit but it may increase with higher amounts of deposit. This is an important detail since making one large deposit will benefit you more than several smaller ones. There may also be restrictions on how long this money needs to be kept in the account for the bonus to be applied. You are normally allowed to trade with these deposited funds but may be limited on withdrawals for a certain time period.

No-Deposit Bonus

Another common bonus involves a demo account that a broker will offer new customers that already has funds in it for you to trade with that are provided by the broker. If you trade successfully and make a profit, it’s yours to keep. If you lose money with the trade, you’re really not out anything since the broker funded the account for you to use. This is typically a smaller amount of money than other bonuses but if you trade successfully you can turn this into a tidy profit with no risk.