And in the past, not getting enough practice was a big reason why ?everyday Joe? investors couldn't trade on the world's major markets? including foreign exchange. It was a close-knit boys club, where getting in the door required you to, well, already have been through the door. Impossible for most of us.
Today, however, we have modern technology on our side. Our computers don't care who we know or where we went to college-- and learning Forex in our pajamas in front of a non-judgmental machine can be a reality for many of us. We can read the manuals, learn the strategies, and most of all practice our Forex trading skills without any risk at all.
Remember this: No matter how smart or well-connected you are, you won't get anywhere (but the poorhouse) in the Forex market without plenty of practice.
Live Demo Forex Accounts
The most popular way to practice Forex trading is through a ?dummy? or ?demo? account with a live broker. Whoever came up with this concept deserves some kind of medal? because no other learning method compares to simple Forex practice. With a demo account, you make practice trades in real time in the real market. The only thing that isn't real? Your losses (and, unfortunately, your profits). All trades are done with make-believe money-- just like playing ?Life? when you were a kid.
Forex practice accounts help you learn in a number of ways-- and most of them are pretty obvious. For one, you get a feel for how to trade. How to physically buy and sell a currency, how to place limits, and how to maneuver through your chosen broker's trading platform. You also get a feel for how to trade to win-- you learn (at least in part) how psychology plays a part in successful and unsuccessful trades, you practice different strategies, and you spend (hopefully) several months learning the ins and outs of the market.
A demo account is like a Forex crash course, and there's nothing quite like it.
Forex Simulators
While demo accounts are probably the most popular way to practice trading Forex, many users swear by Forex simulators. While simulators don't have the ?it's happening right now? excitement of live demo accounts, they do help you to practice Forex on an entirely different level.
Forex simulators allow users to view the Forex market as a whole, using past data to develop a richer idea of how the market functions as a whole. With a simulator, you can upload and view historical data from many points in time, rewinding and fast-forwarding data to test out your understanding of pattern recognition, trading signals, etc. It's a good way to practice Forex while building and refining a strategy
Intermediate ?Demo? Accounts
While most of us love practice accounts, some Forex traders talk about these accounts as the devil's spawn? they say they do nothing but mess new traders up. Why? Because when you spend a lot of time with a practice account, you don't develop a full understanding of the part psychology plays in trading; and you're more likely to take big risks and make big mistakes when real money is in play.
