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Forex demo accounts are free practice accounts for new traders. Think of them like flight simulators for new pilots.
Like a flight simulator, you can make all kinds of mistakes without any consequences – except for maybe a bruised ego and the realisation that you have a lot to learn.
Demo accounts are always free, but some are better than others. Most traders with a demo account will go on to open a live account with the same broker. So, it is important to get the best broker for you right from the start.
4.18
Yes
Accepts UK Clients. Average spread EUR/USD 0.9 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 & MT5 platforms supported. AvaTrade Group regulated by ASIC, FSCA, B.V.I FSC & FSA. 79% of retail investor accounts lose money when trading CFDs with this provider of retail investor accounts lose money when trading CFDs with this provider.Good value, beginner-friendly and hugely respected all over the world, AvaTrade is one of the most reputable brokers in the industry. With support for the leading trading platforms and top-quality multilingual support, AvaTrade has built a brand on a solid reputation and continues to add to that reputation with the recent addition of AvaProtect – an automated loss-protection tool – to its product lineup.
AvaTrade offers trading in Forex, commodities, cryptocurrencies, exchange-traded funds, options, bonds, and equities and is a good choice for any type of forex trader ranging from beginners to scalpers and intraday traders to long-term traders.
4.38Yes Most retail CFD accounts lose money. Your capital is at risk.XM Group has achieved substantial growth since opening in 2009, earning 1.5 million clients in 196 countries. XM’s operational philosophy is aimed at client satisfaction and low client turnover; they earn client loyalty through award-winning 24/5 personal customer service, varied account types and competitive trading conditions.
Regulated the FCA, CySEC and ASIC and the recipient of many industry awards, XM Group stands out from a crowded field of market maker brokers for their customer service and educational support.
4.51Yes Most retail CFD accounts lose money. Your capital is at risk.Founded in 2010, Pepperstone is an Australian ECN broker known for tight spreads, ultra-fast trade execution and broad platform support. Pepperstone’s award-winning, 24-hour support provides the foundation for its excellent customer service, where personalised assistance is available via several methods.
As our highest rated pure ECN broker, if you want to pay a small commission for tighter spreads, you won’t find a better broker than Pepperstone.
4.26Yes Most retail CFD accounts lose money. Your capital is at risk.IC Markets presents itself as the best and largest true ECN broker. It is ASIC and CySEC regulated and offers the MetaTrader4, MetaTrader5 and cTrader platforms. IC Markets is highly recommended to both new and experienced traders looking for faster execution and tighter spreads.
Beginner traders will find the IC Markets account structure welcoming and simple to understand. IC Markets understands customer retention involves a combination of tighter spreads, cutting edge technology, fast trade execution and top quality customer service.
4.39Yes Most retail CFD accounts lose money. Your capital is at risk.Marketsx is a premium trading platform. It’s operated by Markets.com and offers traders fast, low-cost trading on over 2,200 financial instruments. Marketsx provides CFD trading on global stock, forex, commodity, indices, cryptocurrency, ETF and bond markets. Clients in the UK can also use spread bets on applicable instruments.
The proprietary Marketx trading platform is packed full of features and trading tools and is optimised for lightning execution. As well as in-depth charting and asset comparison tools, Marketsx also gives traders a wealth of decision-supporting data with sentiment tools, tutorials, and regular live-streamed, expert analysis.
3.69Yes All information presented is verified as of the date of the review.Most retail CFD accounts lose money. Your capital is at risk.With 50+ Forex CFD pairs available, tight spreads and fast execution, Plus500 is a popular broker with both its new and long-standing customers. Even though a lot of effort has been put into creating a user-friendly platform, CFDs are complex financial products, and thus the platform is not suitable for inexperienced traders.
Award-winning customer service is available 24/7 and the Plus500 platform is web-based with no need for any downloads or setup, making this a good provider for those starting out who want to keep it simple.
Plus500 has one account with a 100 USD minimum deposit requirement and keeps simplicity at the core of its business.
4.24Yes Most retail CFD accounts lose money. Your capital is at risk.Founded in 2001, easyMarkets has always innovated, introducing tools like negative balance protection and guaranteed stop-loss before anyone else. This innovation has continued with its unique easyTrade, Freeze Rate and dealCancellation tools, all intended to assist new traders and keep trading transparent and simple.
easyMarkets still provides the strong basic services expected from a broker while constantly innovating to meet the greater expectations of the client base. With simple account types, a strong variety of platforms to support traders, and a 50% deposit bonus for new traders, easyMarkets is easy to recommend.
4.18Yes Most retail CFD accounts lose money. Your capital is at risk.Founded in 1983, City Index is a traditional market maker now owned by the NYSE listed financial group, GAIN Capital. It has tight spreads and a varied platform choice, including MT4 and AT Pro; an advanced automated trading platform allowing for full customisation with powerful back-testing.
City Index’ education section is perfect at beginners who want to get up to speed quickly and customer service is open 24/5. Overall, a good market maker and competitive with traditional brokers of its size and type.
4.07Yes Most retail CFD accounts lose money. Your capital is at risk.FP Markets is an ASIC-regulated, STP broker with simple account options and an exciting set of tools for traders with higher minimum deposits. Spreads are tight, even on the Standard Account, and the lack of dealing desk intervention for all accounts removes any concern over conflict of interest.
Both the MT4 and MT5 platforms are supported and trader education and market analysis are well-presented, structured and useful. Overall, FP Markets is an excellent choice for beginner and more experienced traders alike.
4.22Yes Most retail CFD accounts lose money. Your capital is at risk.BDSwiss is a popular and well-regulated broker, based in Cyprus and founded in 2012. It offers a wide range of account types, including a new subscription-based Raw Spread Account, which features very tight spreads and no commission in return for a monthly payment.
MT4 and MT5 are both supported and educational and analytical material are both excellent. More experienced traders will also find a lot to like with the Black Account, including free AutoChartist and one-on-one support.
Overall, BDSwiss is a good choice for all traders and we are curious to see if the low-spread subscription model catches on.
A demo account is a virtual Forex trading account designed for beginners. A demo account is the same as a real account, except for the money in the account. A real Forex account is funded by the trader, but a demo account has virtual money provided by the broker.
Real accounts are funded with real money by the trader, demo accounts are funded with virtual money by the broker
This virtual money can only be used in the demo account and cannot be converted into real money. Because they work the same way as real accounts, traders with demo accounts will face real market conditions.
Demo accounts simulate real market conditions
Demo accounts are always free. This works for both traders and brokers: Traders get hands-on experience before making a deposit and brokers want new traders to have a good time trading without any risk. This makes it more likely for a new trader to open a live account.
Demo accounts are always free
Demo accounts also offer traders the opportunity to practice what they have learned. Demo accounts are used by experienced traders to test new strategies, new trading robots and new trading platforms. Traders should always keep their demo account open.
Traders should always keep a demo account open
Demo accounts are all about learning. When comparing demo accounts new traders should also look at how a broker helps beginners. Other things to consider are:
Traders should choose a Forex demo account that never expires. Some brokers will only offer demo accounts for a short period of time, sometimes as short as one week.
Choose a Forex demo account that never expires
Demo accounts that never expire allow you to practice at your own pace. You are not under pressure to complete your education within a set time. With a demo account that never expires, you can also continue your trading education once you have a live account.
FXTM, Plus500 and XM all offer demo accounts that never expire.
When choosing a demo account, it is also important to think about what trading platform you will be learning to use.
Choose a demo account with the trading platform you want to use
MetaTrader 4 (MT4) is supported by nearly every Forex broker and is a good, user-friendly platform for beginners to start with. Because it is so widely supported there are many online tutorials and guides for beginners.
MetaTrader 5 (MT5) is similar to MT4 but has extended features and a more modern interface. cTrader is another popular platform, though is less widely available.
The most popular trading platforms are MetaTrader 4, MetaTrader 5 and cTrader
FXPro, Pepperstone and OctaFX all offer demo accounts for all three platforms (MT4, MT5 and cTrader).
It is important to reiterate that demo accounts are simulations of live accounts. For the true trading experience, you should open a demo account with the same minimum trade size as you would use in your live account.
If you plan to be doing a lot of mobile trading, it makes sense to open a demo Forex account on a mobile app as well. Make sure that the trading app works well on your mobile phone.
Choose a demo account that works well on your mobile phone
Mobile trading apps have evolved a lot over the years since the first ones became available a decade ago. To a large extent, the functionalities of Forex demo accounts available on desktop platform terminals are now captured by mobile apps.
Use a Forex demo account so that you will not lose any money while you are learning. Forex is a high-risk venture and 70-90% of traders will lose money. It is really that simple.
You cannot lose real money with a demo account
Of course, you will not make any profits either. But beginner traders rarely profit by jumping straight into a real account.
Yes, there is a (very) small chance you will be lucky and make a profit. But this is no better than gambling. And like gambling, the house always wins in the end: You may make a profit once or a few times, but eventually, you will lose.
Being profitable depends on how well you know the Forex market and your ability to use your trading platform correctly. It also depends on the performance of your Forex trading strategy.
Use a demo account to learn how to trade, gain platform experience and perfect your strategy
When you are learning to trade Forex with a demo account, these are the concepts you should cover as part of your practice sessions.
Leverage is money borrowed from your Forex broker which allows you to open much larger trades than you would with just your own money. The margin is the deposit required from you to open a trade. This is real money taken from your trading account.
Leverage is money borrowed from your broker to increase the size of your trade
Calculating how much you will borrow and how much you will need to deposit when opening a trade is an important part of managing your risk. This means understanding how leverage and margin can affect the size of your orders.
You should go through the list of currency pairs and know which ones are the major pairs, minor pairs, and exotic pairs. Understand how they are priced and why exotic pairs have a larger range of movement than major currencies.
Exotic pairs have a larger range and wider spreads than major pairs
It is also important to know the spreads for each currency pair you plan to trade and to discover whether they are fixed or variable.
Forex is about buying and selling currencies, but there are various ways to do this. The different ways to buy and sell currencies are called order types.
The two common order types are buy and sell. These are instant orders to buy or sell a currency pair at market price. Then there are limit orders, stop orders and pending orders. Each one of these has variations that can give traders an edge, depending on the market situation. They can also be combined to better manage risk.
Each order type has its own purpose, and they can be combined
Traders should also know how to set the prices for pending orders and set the expiration time for execution of pending orders.
Reading and modifying charts is an essential part of Forex trading. You will need to understand how to change time frames and how to add indicators and oscillators to the charts.
Charting is an essential part of Forex trading
You will also need to understand how plug-in tools work. Autochartist is a tool that plugs-in directly to MT4, MT5, and cTrader and helps you detect chart patterns and trading opportunities.
Fundamental analysis is the study of how news events affect price action and volatility. Most brokers will have an economic calendar with the upcoming data releases for the major economies but trading unpredictable geopolitical events, such as Brexit or the Covid-19 pandemic, is a very tricky business.
Trading geopolitical events, like the Covid-19 pandemic, is a tricky business
You will need to learn how each currency pair that is listed on the news calendar responds to high-impact news releases. Once you understand a currency pair’s response you can learn to trade the initial spikes when news is released.
Technical analysis is the study of historical price movement to predict future price movement. Technical analysis occurs almost entirely on charts. Each platform comes with a variety of line tools, Fibonacci tools and other tools necessary for chart studies.
Technical analysis is the study of historical price movement to predict future price movement
With a Forex demo account, you can learn how to use these tools to plot support levels, resistance levels, chart patterns, retracement and extension levels, and create trade alerts.
Learning starts with understanding your Forex trading platform and its features. Before you start trading with real money you should be able to answer all the following questions about your platform:
For this reason, you should use the same platform for your demo account and your live account.
Use the same trading platform for your demo account and your live account
You should also use the same amount of virtual money in your demo account that you will fund your live account with. By doing this you can use the same lot sizes and other parameters to mimic the exact conditions that you will face in live trading.
More than 98% of Forex brokers offer demo accounts on the MetaTrader 4 (MT4) platform. However, the MetaTrader 5 (MT5) and cTrader platforms are also available for those who want extended functions such as algo trading (cTrader) or a Depth of Market (DOM) tool (MT5).
More than 98% of Forex brokers offer demo accounts for the MT4 platform
Some brokers also offer their own platforms. While these are often easier to use for beginners, you should only use them for demo trading if you plan to open a real account on the same platform.
Once you have mastered the use of the trading platform, it is time to use your demo Forex account to test your strategies and to learn the best use of indicators and Forex robots.
The emphasis is not to give yourself a false sense of security by just posting profits, but to understand how each indicator works. You also need to find out how well your indicators and robots work in live market conditions. You will also need some theoretical knowledge of the categories of indicators available and how they are used.
Unfortunately, the answer to this is: You cannot.
A drawback of Forex demo accounts is the reduced psychological impact when using them. When traders know that no real money is involved and nothing is at stake, they disconnect from the seriousness of the situation – it is human nature.
Trading with a demo account does not have the same psychological impact as trading with a real account.
However, when real money is involved, traders will find anxiety and self-doubt to be near-constant companions. Forex trading with a demo account cannot prepare you for dealing with these emotions, and you should be aware of this psychological challenge.
Furthermore, slippages and requotes that can occur in real money trading do not exist when using a demo Forex account.
Opening a demo account only takes a few minutes. To get started:
Here is a video tutorial showing how to open a demo account.
The best MT4 demo accounts offer real market conditions, premium charting packages for free, give beginner traders access to educational content, and trading using mobile phone applications.
We have a guide to setting up MT4 should you need the assistance getting started and more detail where we compare MT4 Forex brokers side-by-side.
If you are new to trading and don’t know how forex trading works, it is wise to start your reading here, and then move off to learning to trade Forex, and how to open a trading account.
Trading Forex and CFDs is not suitable for all investors as it carries a high degree of risk to your capital: 75-90% of retail investors lose money trading these products.
Forex and CFD transactions involve high risk due to the following factors: Over-leveraging, unpredictable market volatility, slippage arising from a lack of liquidity, inadequate trading knowledge or experience, and a lack of regulatory protection for clients.
Traders should not deposit any money that is not disposable. Regardless of how much research you have done, or how confident you are in your trade, there is always a substantial risk of loss. (Learn more from the FCA or from ASIC)
Our State of the Market Report and Broker Directory are the result of extensive research on over 100 Forex brokers. The explicit goal of these resources is to help traders find the best Forex brokers – and steer them away from the worst ones – with the benefit of accurate and up-to-date information.
With over 150 data points on each broker and over 3000 hours of research and review writing, we believe we have succeeded in our goal.
In a world where trading conditions and customer support can vary based on where you live, our broker reviews focus on the local trader and give you information about these brokers from your perspective.
All research has been conducted by our in-house team of researchers and writers, gathering information from various company representatives, websites and by sifting through the fine print. Learn more about how we rank brokers.
These resources were used in writing this article in order to keep accuracy of the information.
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