Almost all forex brokers give our free demo forex accounts for their clients to try out. These demo forex trading accounts are useful for them to entice potential clients to try out their services. But for you as a forex investor, how can you exactly take advantage of a demo forexaccount?

A demo forex account is free. And with that alone, you already obviously take away the risk of losing money. What you should focus on therefore, is how you can gain extra money by taking advantage of this tool which is the demo forex account.

Take Advantage Of A Demo Forex Account

Get familiar with the trading platform

The demo forex account is a good way for the forex trader to get familiar with the trading platform being used by the forex broker. As we know, different forex brokers may use different trading platforms. Depending on your preferences, you may choose a forex broker who provides a trading platform which you are already familiar with. On the other hand, you can always try out a new trading platform and see for yourself if you can trade effectively with it. But always remember that the important thing here is that you get familiar with the trading platform that you are going to use when you finally trade with real money.

Play around with the color schemes. Customize the charts according to how you would like to arrange your favorite technical indicators. Play around with the alerts to familiarize yourself with the sounds to call your attention. Test out how each technical indicator works. Maybe you can find use for them in the future when you are developing other trading systems.

A demo forex account is there for you to tinker with. This is important so that when the time comes that you would already have to trade with a real, live account, it would already come second-nature to you to click on the features that you need. The time you spend practicing with the demo forex account now can save you both time and money in the future with a real, live account.

Test out all trading strategies

This is the most important use of forex demo accounts – for you to be able to test out your trading strategies. Test out those free trading strategies that you find in the different forums. Install the various forex robots, both free and paid, that you have downloaded. Backtest and forward test all trading strategies. You may also use demo forex accounts to be able to classify which strategies are for scalping, which are for swing trades, and which are for more long-term use.

And to make you testing more organized, I suggest that you learn how to separate and segregate. Use different charts for different strategies. And I would even go as far as using different forex demo accounts for different strategies. They are free anyway. So, you might as well take advantage of it to the fullest.

With the Metatrader platform, you can do this by installing multiple instances of the Metatrader platform in different folders in your PC. With different accounts, it would be easier for you to track donw and evaluate different trading strategies.

Use realistic capital investment figures

Now, here is a very useful tip that not many forex traders use when trading with a demo forex trading account. Usually, they just accept the default values given when opening a demo forex account. What they do not know is they have the option to customize the amount if initial investment capital that you shall use as practice money for your demo forex trading.

And how is this useful? You can actually simulate not just the market situation with a demo forex account, but also the capital management factor of your forex trading account.

Most probably, even if you are still testing out demo forex accounts, you already have an idea how much you would eventually be investing for your first live account when the time comes. So, why not use that investment amount as you demo forex account’s initial capital investment instead of the default USD50,000, unless, of course, you actually plan to invest USD 50,000 for your first live forex account.

This shall give you a clearer picture not only of how your trading account shrinks or grows with losses and profits using your trading strategy, but it shall also give you a more realistic expectation of forex trading investment with more realistic absolute values.

Keep the above tips in mind when opening a demo forex account. These demo forex trading accounts can be more useful than you think when it comes to preparing you for the real thing.

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