Trading forex isn’t a game, but it’s surprising how much you can learn about currency markets using monopoly money.
Signing up for a demo account with a leading forex broker allows you to do just that. You can pass go and try trading in a live environment straightaway using £10,000 in virtual funds. This key feature of forex brokerage trading services  lets novice traders get a feel for what they can expect when real money is on the line.
What’s great about this option is the freedom to gamble with virtual cash in order to refine your trading skills and prepare for the day when you put your own capital at risk.
Starting out with £10k will give you enough funds to sustain a valuable trial period. If you’re new to the game and don’t have much prior experience, you can learn the ropes by test driving the demo accounts services and capabilities, most of which reflect what you’ll have access to later when you go live.
Forex demo accounts use actual market data to reflect what happens on a real trading account. Forex brokerages offer them as a way to attract prospective new customers, by helping them understand how currency markets work. Potential customers also get to see how the broker’s platform performs, and the range of services available.
Having spent some time making virtual trades on the demo account, you can start to adopt specific trading approaches like day trading and see how they do. You can also begin to build a trading strategy that reflects your goals.
The key to making that virtual £10,000 investment payoff is to trade as though the money was real, responding to the actual market conditions and adopting a trader mind-set.
To open a forex demo account and set the £10,000 funding amount, follow these steps:
1- Make a shortlist of forex brokers to try. There’s no shortage of forex brokers to choose from, and any Google search will give you pages of options. Do some research to work out which ones have the highest satisfaction ratings. Select one or two to try out first.
2- Use the tutorials and other educational tools. The internet is chock a block with introductory forex courses and DIY guides. The information a demo account broker provides tends to be of high quality and will be geared to their platform’s features and benefits, and they’re free – so it makes sense to take advantage of them.
3- Configure your account settings. You’ll want to configure your demo account just as you would do with a live account. To keep it real and trade as though actual cash were on the line, restricting yourself to specific pairs, and ensuring each position has stops and other risk management tools turned on.
Eventually, you’ll be ready to make the leap to live trading and test your skills against the market. To help mark when that day should be, it’s a good idea to set benchmarks. That might mean completing your first 50 trades, reaching 15 per cent of the demo account virtual funds balance, or hitting a full month of profitable trading.
Maximising the virtual funds in your demo account will make the transition to live that much easier.