Forex Practice Accounts – Are Demo Accounts Really a Good Thing? Free Forex practice accounts are a kind of service that some people like and others hate. Why does this happen? Surely the free practice account can only be considered a good thing?
May not be exactly in this way, it holds advantages and also some disadvantages and then we will try in this article to be exposed to study the pros and cons associated with this type of calculations.
Let’s start by looking at the Hydra APP demo account. For those who have no background, the Practice Practice Account gives you information similar to the one you read on the food tray. It allows you to practice Forex trading for free, which seems good and useful to the beginner trader.
The broker who offers demo Forex accounts does this to bring in more people interested in Forex, and nothing wrong with that as he does to expand the base of traders in the market or even users to his trading platform. It is also a great way for a new trader to start learning forex trading.
Forex trading is never a simple experience based on clicking on a number of buttons, many brokers have introduced unparalleled rattles in their trading platforms as well as reducing the sizes of deposits to a minimum to get a new trader. One or two of them took a step further and allowed people to open a free demo account so that they could start trading through virtual funds to get the knowledge and confidence needed to risk their hard earned money.
Here are the key features of the Practice Practice Account, by allowing you to learn about the Forex market and core trading functions without risking even one cent! However, it is not only on the positive side.
When you trade with “default” money, the risk appears to be limited. In fact, the risk is virtually non-existent with the continuum of virtual trades, which means you may become more reckless in trading that you do not have to do while trading in the real account. In other words, this gives you a false sense of security.
Let’s assume, for example, that you put a lot of risk on your demo account and using the virtual funds and succeeded with you, then again you risk more and succeeded too, in this case your confidence will suddenly rise to the sky and feel that you can start trading with your real money and carry degrees Calculated from risk.
If the Forex market suddenly becomes very attractive for you, if you managed to earn all this money on the demo account if you imagine what can do when you trade real money? From this point starts failure. Then you go directly to open a real Forex trading account and start depositing your money.
Since you feel full of confidence and have a sense that you know everything to do, then you go to risky trades but this time using real money so you quickly fail to find yourself suddenly and your future career in the Forex world is over and all you have to do is sit down and count your losses. Large. To look like when it comes to “real money”, all the training I got from the demo account was useless.
Of course, if you gradually take things with due diligence you can avoid these risks and become a successful trader, but first of all you have to have control over yourself. Practice calculations are very useful but if trading is done exactly as we might do using real money. So do not open a trading center in the demo account you will not open in the real account!
To help you reach this stage, you can look for a number of intermediaries who offer a mini account that allows you to start with no more than $ 250 like Hydra APP. These types of accounts may be considered virtual accounts because of the small size of the capital but at the same time are real money, which will help you to do real trades but without taking a great risk.
At Investawise we feel that the above is the right choice, of course we recommend using free practice accounts for one or two weeks to learn all the fundamentals of forex trading. But then immediately open a mini account to begin the gradient towards gaining confidence in currency trading. Success in this field comes from patience, awareness and discipline.
Q1: Keeping in mind that the Forex market is the largest financial market in the world with a turnover of US $ 1.5 trillion per day, the question that will come to mind is how you started your activities in this market according to these data?
A1: The Forex market is unique. In the UK, there is no central exchange for Forex trading because the business is done through the interbank market. With Forex trading increasingly popular among individual investors using margin trading and with the establishment of more brokerage firms, I believe that this market will continue to grow rapidly in the near future.
Q2: Unlike the huge liquidity of the Forex market, you may wonder what are the key benefits associated with working in this market?
A2: There are not many things to be involved in during the Forex trade because the pricing mechanism in this market is affected by a limited number of variables. The main advantages include allowing the Forex market to trade 24 hours a day, a larger leverage – most brokers offer a leverage of 100-1, a small amount of capital to start, more liquidity – daily trading volumes are sufficient for all considerations. The currency market has more liquidity than all the stock markets combined so the currencies remain in a state of constant movement, free trading systems are better for open trade – there are artificial controls in the structure of this market prevent it from falling very quickly. The reason for this is that we live in a biased world and always prefer to see things rise rather than lower. One of these artificial devices is the “rising base” which plays a role in the stock trading, making it difficult to sell the stock on the short as easy as available when you buy it. This is not in the currency market where you can sell short positions during the day trading session as easily as you will buy them. A perfect market for short term traders.
Q3: Limited access to the market, liquidity considerations after hours of trading, commission fees, capital requirements and short sale limits are examples of the limitations investors face in thinking about trading in other markets. But since the FX market removes all these traditional barriers, it does not limit the ability of Forex traders to execute the transaction they want in a timely manner, which contributes to the increase in trading volumes, which is why it is possible to expect increased volumes during this year?
A3: With all these features, traders may not resist the desire to start trading currencies. Although volumes in all financial products are growing at a high rate, the Forex market remains the most popular among all retail investors.
Q4: There is strong competition among online Forex service providers, which benefit Forex traders, some claiming to provide technical analysis of the same degree of professionalism as those provided by banks and major financial institutions. But is this already available?
A4: Technical analysis has gone a long way as most Forex service providers now have partnership agreements with companies offering technical analysis. Nevertheless, banks have a special advantage because the Forex market is still not subject to a unified economic model. Therefore, banks will still be able to access information that is difficult to make available easily, although ISX companies are currently trying to communicate with banks permanently to fill this gap.
Q5: Do you believe in the theory that the Forex market is less volatile than equity markets because it is deeper than it?
A5: By betting on trends that are common in national economies, it can be said that never before had a currency fallen by 25% in one day or collapsed rapidly as happened to Enron or Parmalat. In the wake of these scandals, many companies are providing information in a more prudent way, making it difficult to get a real view on stocks at the same time that a large leverage is likely to lead in the event of a sudden news to erase the entire capital that is trading with it . So if you trade Forex with Hydra APP as a business accompanied by the use of appropriate rules for capital management I think you have a greater chance of success.
Q6: US interest rates at their lowest in several decades; global trade wars and fears of terrorism dominated the headlines of major newspapers recently. What is the impact on retail volumes?
A6: The above factors have led to a decline in the value of the dollar. This is accompanied by the adoption of stricter regulations with financial intermediaries so as to increase investor confidence. Also, the collapse of the stock market has prompted individuals to look for profit opportunities offered by the Forex market
Q7: The Commodity Futures Commission (CFTC) has recently taken 58 measures against some brokerage firms since it was granted its new powers in 2000. In view of the continued presence of some intermediaries who violate the regulations, which sometimes makes the investor’s money is not traded in the desired markets, the question will be about what the investor must do to protect himself?
A7: The Forex market is essentially a kind of betting, and as with any other bets, there is always a risk that you will not get the gains you have made or the trade prospects will run against your expectations. But with increasingly stringent regulations and also the degree of competition, the probability of bankruptcy can be said to have largely disappeared. Despite this, the risks of price manipulation are still present and in fact it is impossible to disappear completely. Therefore, investors must have an independent source of prices and also trade with a broker who offers a real trade service using a single click. Most intermediaries know about the big numbers base, where they act as grocery stores 50 years ago when they do not hedge any trading centers while directly competing with their customers. This leads to manipulation of prices and consequential further actions by regulatory authorities.
Q8: What is the best way for “novice traders” to engage in this market?
A8: Like any new form of trading you will need to learn everything related to this area, especially because of the risks of using margin in the currency market. Take all the time you need to learn this new skill in business well – – Also train on everything you learned through demo accounts before you start using your money with the real account. Investors should read books, attend seminars and carry out paper trading so that they feel fully comfortable with the trading strategy they use.