Frequently Asked Questions about Forex Practice Accounts

by Zahir
(www.fxcc.com)

Everyone keeps asking “What is a Forex practice account?” Most people in the know will answer that it is an added functionality in a forex trading/trial account. And that it allows you to practice trading without the actual risk of losing money. Then comes the other questions... This article will address some of the more common follow up questions to the definition of a forex practice account (demo account).

Where do I buy a practice account?

You don’t buy one, you rent it out. This is because a practice account comes hand in hand with a forex account/platform. The former is accessible via membership, usually with a monthly fee. Now that’s cleared up, you have two options. Either sign up with a broker that provides a free platform or sign up with a forex platform.

Can I get a practice account for free?

Yes you can. This can be had using two methods. The first is to sign up for a trial account. The disadvantage is trial accounts only last for about 30 to 90 days. This means your free practice account will last just as long. Of course, there is the alternative of going around signing up for demo accounts each platform at a time. But this will be very inconvenient, and after a few years, you will have exhausted your options. This is because they identify your URL and sometimes, even the CPU’s serial number. This means you either sign up or buy a new CPU.

The second method is not actually for free, but technically it is. This is because you sign up with a broker. This broker will charge you a fee. However, in exchange for the fee, you get the services of the same plus a forex platform. Of course you get more by way of service but you also pay more in terms of actual dollars shelled out.

Are all practice accounts the same?

Essentially, they are. This is because the purpose remains the same. However, the functionality as well as the interface are different. Also, the access to historical data is different, depending on the provider. And in most cases, practice accounts are tweaked in order to function just like a particular platform. Therefore, in reality each practice account is different in feel and in its efficacy.

What is the best practice account?

The answer depends on your needs as the broker and the forex account the same is tied up with. For example, if you are looking for an autopilot type of account and you are a team player, then you may want to consider Currensee. If you are more off a technical analysis kind of trader, then Multicharts is your primary consideration. If you are an FXPro kind of trader, then cTrader is a good choice; provided of course that you take into consideration the generation of platform it is working with. For example, practice accounts with third generation platforms are almost always better.

How do I maximize the use of a forex practice account?

This advice will not come as a surprise to you. You only need to do three things. The first is to read the manual. The second is to practice regularly. The third is to analyze what you did right and wrong, then repeat.

Guest post by FXCC - Forex Practice Account

Comments for Frequently Asked Questions about Forex Practice Accounts

Average Rating starstarstarstarstar

Click here to add your own comments

Feb 10, 2013
Rating
starstarstarstarstar
ECN broker accounts best
by: Fritz from brainyforex

Brokers whom are market makers take the opposite side of your trade, which includes matching buy and sell orders from traders. If the net buy and sell orders don't equal the market maker takes the position and either makes a profit or loss from the transaction, depending if the trader wins or loses. Market makers in the past have recorded INSANELY HUGE PROFITS from this type of business model but have also been suspected of unfair play and challenged in the courts.

Non-market makers with True ECN whom get paid a commission ONLY on the traders volume obviously want and need traders to be successful with their trading activities so as to profit in the long term. If a trader continues to trade successfully, then volume will increase over the long term and BOTH the trader and broker are happy to continue to make money.

Before opening a brokerage account and selecting the account type it is best to ask if the broker takes the opposite side of the trade (is the broker using the market maker model?) and if the only profit made from the trader is a commission from the volume traded.

These days it seems that most forex brokers are choosing to move to a more transparent model, trying to avoid any possible perception of any conflict of interest between them and their client traders.

In relation to the negative comments below (dated 8 February 2013) about ThinkForex, I don't think those comments are correct as on the Thinkforex website under their FAQ about demo accounts it states; (copied from their website);

[Is there any difference between the demo account and live account?
There is no difference in our demo account and our live account. You can expect the same spreads, speed and execution when trading live.]

If Thinkforex statement is not correct, then this can be taken up with the Australian and NZ regulators and reported. I don't believe Thinkforex would say this if it was not true. To my knowledge brokers have no issues telling you if their demo account is different to their real account.

Regards
Fritz
www.brainyforex.com

Feb 08, 2013
Rating
starstarstarstarstar
When the Demo Account Is There To Deceive
by: Anonymous

Case in point: STINKForex (ThinkForex) sets you up on their Demo account and either your EA bot and/or your own manual trading is allowed to do well. You believe that the Live account will be allowed to function and produce similar results (at least). However, when you go Live, the results are not in your favor, but the stop - hunt - bet against bucket shop broker!!

So, just because a broker offers a Demo account, does not mean they will allow you to make a profit (or much of one) on their Live account.

Finding an honest broker seems to be like finding an honest lawyer!! To be forewarned is forearmed!

Feb 10, 2013
Rating
starstarstar
STINKForex Is A Bucket Shop
by: DiggerOfTruth

I have proven, time and again, that the STINKForex brokerage is a bunch of lying, thieving, criminals.

None of their statements are true.

Much like Burger King, whose executives swore up and down, again and again - on the record - that there was NO horsemeat in their burgers...until they were found out.

Once a bucket shop has been found out - and STINKForex has been, time and again, over the years (their sabotage of my account in mid-trading being one of the most recent on record) - they cannot and must not be trusted!! They should be prosecuted, cursed and boycotted to the end.

As I have not been with any other broker and am still not with any broker presently, there is nothing for me to gain but the truth and possibly restitution for their crimes against me.

For the sake of other traders, I post the Truth.

Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Forex trading articles - general.

Subscribe to brainyforex newsletter here

Need help to trade the markets? This private Proprietary Trading Firm trades all the global markets and will show you how. Learn more and get a brainyforex discount here.

Learn about the myths of market trends & patterns with this complimentary (free) ebook here.

Learn how to trade with candlestick patterns with this complimentary (free) ebook here.

Learn how to identify a true breakout and get in before the crowd with this complimentary (free) ebook here.

Who said automated trading systems don't work? Check out our brainyforex robot testing page here.

Brainyforex tip : Check out Forex Real Profit EA test results below. Our testing so far shows this system to be profitable with low risk.

http://www.brainyforex.com/forex-real-profit-ea.html