If you’re new to forex trading, honing your skills through a forex demo account is essential before you start trading for real in Jordan. This article will give you 6 reasons why you might need to open a demo account.
Did you know that in 2018 global trading volumes in the forex market were at an all time record high? Why? Because of the volatility in the world markets, more and more people are turning to forex to trade in, in order to get a better rate of return.
In the US alone, over 14 million households (according to Statista) have an online trading account. The forex market turns over more than $5 trillion each and every day – if that isn’t incentive enough to get into forex trading, what is?
Of course this can be an incredibly daunting market to break into, which is why practicing trading through a forex demo account first, is crucial, if you don’t want to lose money making silly mistakes.
What is a forex demo account
You’ve probably got a fairly good understanding of what a Jordan forex demo account is – it’s essentially a paper trading account which gives you information from live markets, simulating the real trading environment. All without putting any of your actual money at play (or at risk).
Using a demo account allows you to start trading online quickly and easily, practicing and learning what works for you before doing it for real, with cold hard cash.
If this is your first time trading, then using a forex demo is a must to get a feel for what live trading is actually like, as well as to get used to the trading platform and the broker you’re using.
How to open a forex demo account
Opening a demo account is quick and easy. All you have to do is pick your prefered platform and in a matter of minutes you’ll have a practice forex account all set up – ready for you to try your hand at trading currency, without losing money, should it all go horribly wrong.
Why trade with a demo account?
The safety net of a demo account will be invaluable as you navigate the often confusing world of forex. By using a demo account you’ll quickly learn the ins and outs of your chosen trading platform. You can figure out your prefered trading strategy too, analysing the results once you’ve made your trades (not that this will necessarily translate through to success in the real markets). It’s a risk free way of learning how to trade on the global currency market.
Let’s take a look at these in more depth.
1. Learn how to trade risk free
When you trade with a demo account it’s identical to a live account. You’re learning to trade on the job, but without any of the risk.
You can put all of your trade training into practice without losing any real money. In a demo account you trade with virtual funds, and you don’t have to switch to a live account until you’re entirely comfortable trading on the demo account.
Most platforms also have a learning hub where if you’re new to trading you can learn how to trade for free. Even if you’re a novice, or intermediate, or even an experienced trader you should never stop learning.
2. Get to know your trading platform
MetaTrader4, more commonly known as MT4, is the most popular trading platform for online traders to use. It has an interface that’s been developed to handle the full range of clients that use it, making it the best tool for both beginner traders through to professional forex traders.
When you open a demo account you learn how to trade using this platform – how to close your trade and how to put all the different tools to best use.
Before you open a live account, it’s essential you’re completely familiar with the ins and outs of trading – when you go live it’s your actual capital at risk. By using a demo account you’re setting yourself up for long term financial success.
3. Discover your boundaries
Trading brings out a range of emotions and you need to know where your boundaries are, and you don’t want to discover them when you’re trading with your actual money.
Overconfidence can carry you way beyond your comfort zone, and when you’re trading for real, this can equal devastating losses.
By playing around with your boundaries on the demo account, you’ll learn how to deal with euphoria and disappointment, so they don’t cloud your judgement in future trades.
5. Develop your trading strategy
Testing and adjusting a trading strategy is key to success. One trading strategy won’t work for all trades, such is life. You need to develop a trading strategy that allows you to be flexible and roll with the punches. You can learn and develop such a strategy, or strategies on a demo account.
Over time, the more trades you do, the more you’ll see what your own trading patterns look like, and you can analyse what you’re doing well and what you need to improve on.
Not putting your own capital at risk in a demo account means you can be as creative as you like and try all sorts of trading strategies, including really far-fetched ones and find out which work best for you.
6. Figure out your trading routine
Once you know your strategy, you can then figure out your trading routine. Just because you live in Jordan, doesn’t mean must you solely trade in Jordan.
That’s the beauty of online trading, you have access to the global forex markets. Most traders choose to trade around the opening of the big markets – Tokyo, London and New York (12am, 8am and 2.30pm GMT). However that doesn’t mean that you have to trade then.
You want to find a time that suits you. A time when you’re completely focused on what you’re doing – develop your routine to fit around your work and home life. The last thing you want is to make poor trading decisions because you’re distracted.
Remember, forex trading is a marathon – so plan for the long term and practice, practice practice trading on a forex demo account. It’ll pay dividends in the long run.