Currency Trading with a Practice Account
This article is about experiencing currency trading by opening practice accounts online.
Newcomers to the currency trading world can spend hours going through training courses but, without actual trading experience, it will not stand them in good stead for when the time comes to do live training. It is recommended that newcomers open a practice account to gain experience with currency trading. Most of the online forex brokers offer these accounts. The practice account that you open will be funded with ‘virtual’ currency, so you are able to trade without the risk of losing real money while you gain some experience.
A practice account will offer you the chance to experience the constant price movements that occur in the foreign exchange market. You will be able to observe the change in prices at various times of the trading day. You will also be able to see how various pairs differ. When you become aware of the release of economic data and global news, you should check what activity results from it. This will allow you to get first-hand knowledge of how the market reacts to this type of information.
Besides being able to see the movements and the reason for the movements in the market you will be able to:
- Play around with various strategies to see which one is most suited to you
- Improve your knowledge and understanding of how leverage and margin trading operate
- Commence trading in markets that are real, without the fear of losing your own money
- Follow the technical indicators of the market
- Learn how to analyse charts
- Gain suitable experience by using different orders and managing your open positions
You may want to consider opening several practice accounts with a handful of different brokers. Trading platforms differ as regards their functions and capabilities, and having the opportunity to try several platforms will allow you to make an educated decision when you start trading real money. The different brokers will also offer you different research methods, charting packages and trading policies. This will also allow you to investigate whether the broker’s customer service level is to your satisfaction.
When you undertake paper trading, you will write down all the trades on paper, based on live market prices, but with no risk involving real money. This is simply a slower version of a practice account as you simply have to click and deal, and beyond that the trading platform that is in use will do all the actual data recording without your input.
Irrespective of your method of practising, you should always bear in mind that the money you are practising with is not real. This will give you the freedom to play around with all your ideas that you have regarding currency trading.
Practice accounts are a wonderful way for you to experience the real world of currency trading without the risk. It is also an ideal way of test-driving a broker’s trading platform, and this will allow you to obtain information regarding the possible choice of a forex broker in future.
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