Because Forex is a decentralised market in which dealers disseminate their price feeds through their trading stations, it is key to learn the features of the platform you will be trading on. Nowadays, you can use demo accounts to test-drive each platform, without putting actual money on the line. And most brokers let prospective customers download a complimentary demonstration version of their software.
In this article, I’ll discuss the importance of demonstration trading and highlight a few things to consider along the way.
Each Platform Differs
Many brokers supports MetaTrader 4 and 5, likewise called MT4 and MT5. This is the case with AvaTrade and FP Markets. Others, such as Plus500 and eToro, support additional platforms, although these additional options may be proprietary to the broker. This means that the platform may not be available from other brokers.
While each platform may function and look slightly several, most give you roughly the same features. These features include foreign exchange quotes/prices, charts, technical analysis tools, news feeds, trade history, drawing tools, and functionality for trading forex.
Several platforms have more features than others. as an example, several platforms have integrated fundamental and economic analysis tools, while others do not. For someone taking long-term trades, this may be big, but for a short-term investor, it isn’t.
Placing Orders
As a rule of thumb, you should place at least 50 demonstration trades on each platform before trading real money hence that you can master the details of order entry on each platform. Someone should never trade live unless he or she can confidently answer all of the subsequent points:
- How do I place a limit order?
- How do I particular a stop order?
- Can I particular a quash and a stop at the time of entry?
- Are the spreads on the platform fixed or variable? And what is the usual spread?
- What is the lot size that I can trade (1,000 units, 10,000 units, 100,000 units)?
- Can I mix and match the lot sizes?
- Can I call the dealing room directly if my internet connection goes down?
Several platforms turn to pop-up order windows, while others let you trade by clicking prices directly on a chart. ordinarily, to purchase a fx pair, click on the provide share of the quote (the ask), and to dispose of, you click on the bid share. Several platforms let you to determine market order or quash order after the quote window pops up, while others force you to make your selection beforehand.
Trade Like It’s a Life and Death Matter
When you have mastered the basic functionality of a trading system, turn to the demonstration platform to experiment with different systems. Are you a short-term momentum investor who likes high borrowing and tries to capture 10 to 20 pip moves? Or do you prefer using less borrowing and holding longer-term trades that could potentially yield hundreds of pips? demonstration trading can help you spot what form of trading suits you finest.
On the other hand, demonstration trading is not the actual thing, even as it helps prepare you for the actual thing. You may be entirely calm after sustaining an important loss in a practice account but might become perfectly unhinged over in fact a minor loss in your live account. To make demonstration trading as productive as possible, you need to trade as if the funds were real. Ff you’re planning on depositing $1,000 into your live account, don’t trade with a practice account that has a $1,000,000 balance.
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