Demo account as an effective way to protect money losses in forex - When you find and read this article, maybe now you are new to Forex, or you are in a position of learning forex trading.
Therefore, it is better for you to know first what is a forex demo account and know how to create a demo account that is very useful and of course free.
In accordance with the title of this article, what is a demo account? Why do demo accounts protect against losing money on forex trading?
For the short answer is that the demo account uses virtual money (not real money) so what you trade on the demo account cannot be withdrawn.
For more details, "a demo account is a type of account provided by the majority of online forex brokers, through which the trader can trade forex online as in reality, but there is no risk of losing money or capital."
Traders can see price movements in the forex market on the application provided by the broker along with a demo account.
Besides that, traders can also execute (open buy or sell positions) or close trading positions.
Traders can also practice strategies and so on completely and thoroughly in accordance with actual market conditions.
However, to use a forex demo account, traders do not need to provide funds or capital.
On a demo account, funds on a trading account are virtual funds (not real money) provided by a forex broker for free.
Therefore, if we get a profit, the profit cannot be withdrawn. Conversely, if we experience a loss, then we also do not lose real money.
So, no need to be afraid and the broker will not charge you to compensate for the losses incurred in the forex demo account :)
Actually, the purpose of a Forex demo account is to:
- For traders who are still exploring or looking for a broker, they can register a forex demo account to see how technical performance such as: server, speed, or see the spread of a broker.
- Forex demo accounts are useful for maturing skills in trading before a trader decides to use a real account, because it also practices trading analysis and execution.
- Beginner and experienced traders can take advantage of forex demo accounts to test trading systems freely, without the need to fear loss if you make a mistake.
- For novice traders, a forex demo account will provide a very real illustration of online forex trading.
Generally, there are no special requirements for creating a forex demo account. You only need to register at the broker to open a demo account.
Next, the broker will send the application download link along with the ID and password details via your email.
After you download, install, and login to the application (usually the most used application is Metatrader4) you can then immediately see price movements and practice forex trading and can enter orders.
Registration or forex demo account application is completely free. You can get it very easily and quickly in minutes.
Generally, almost all brokers must provide a demo account. Because by using a demo account traders can get to know the broker (or if the slang terms of the demo account are the same as the broker's trial version.
Maybe if we practice trading using a demo account we feel unsatisfied. That too happened to me haha, honestly I also only briefly used a demo account.
Forex demo accounts are free facilities that are very useful for traders to learn and practice online forex trading. Because only using virtual money that is not real, then the risk of material loss does not exist.
However, the picture of online trading obtained by traders may not be optimal, especially in terms of psychological and emotional. Trading pressures with real money risk will be very different compared to forex demo accounts only.
But we need to know that the demo account can be our solution so as not to lose money when we practice trading, so a demo account is worth a try. Maybe if you are more willing to lose funds, you can try using a 'real' account, but the nano, micro, or cent account. :)