“Demo accounts” represent a priceless opportunity to learn how to trade foreign currency exchange successfully without ever losing any money. As such, everyone should try to use one (or more) before they ever start trading with their own capital. The experience can make all the difference in the world. But, what happens if you’ve already started trading? Is it too late for practise on a “demo”? Never. Besides, unless you’re making profits on at least 6 out of 10 trades – right now – and, your losses are minimal, you need to use a demo to perfect your trading strategy toward that goal.
No 2 demos are alike, so you need to shop around a little bit. One of the most critical things to check out is whether or not you can modulate the amount of leverage that you’re using in your trades (or, how you can go about doing this). Some accounts are fixed at certain ratios (like, 100:1 or 200:1); others can be adjusted. Try to find an adjustable account.
What Are Demo Accounts For Foreign Currency Exchange Trading?
Many forex banks and brokers offer demo accounts. These accounts are identical to “real accounts” except that they use “virtual money” – not your money. Through these accounts, you can learn to launch (and retrieve) trades, modulate the amount of leverage that you want to use and learn how to use advanced technical charts in order to time your trade entries and exits. If you use 2 or more demos, at the same time, you can run the same trade through, comparing execution and fees. This should give you a good handle on whether a bank or a broker is promising you the world and actually delivering it (or not). No 2 demos are alike; shop around. Be discerning.
How Demo Accounts Can Help You Become A Better Trader Of Foreign Currency Exchange
One of the beautiful aspects of a demo is that it can tell you whether or not a trading strategy is strong enough to deploy all the time. After all, you can’t use any strategy that does not consistently produce a profit. Actually, reality is that you cannot afford to use a strategy that doesn’t produce a profit at least 6 out of 10 times, with minor losses in between. It doesn’t have to be something complicated. In fact, it could be something as simple as using a “Williams Alligator” on a 1-hour AUD/USD chart and only trading any full, moving average crossovers when/if a “5, Fisher Transform” also confirms the crossover – while using a leverage ratio of 50:1 or lower.
Using Demo Accounts To Refine Foreign Currency Exchange Trading Strategies
The Alligator is composed of 3 weighted moving averages that are normally calibrated for 13, 8 and 5 periods of time (meaning that, on a 1-hour chart, the time periods would be 13 hours, 8 hours and 5 hours). By having the shortest moving average inputted at 5 time periods, a lot of crossovers occur and many of these crossovers are of very short duration – too short to be profitable. In order to get around this problem, recalibrating the Alligator to 20-, 13- and 8- periods of time is one solution. If you choose to do this, then you will also have to recalibrate the time periods of any other indicators that you might be using, such as a Fisher Transform.