Frequently Asked Questions about Forex Practice Accounts
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