Role Of Forex Demo In Enhancing Forex Education

Forex is a very risky place for investing as the exchange rate fluctuates everyday bringing in a lot of uncertainty

. One wrong step can result in an investor incurring huge losses. So it is important that anyone aspiring to make a mark in forex should have a minimum amount of forex education. Forex being a decentralized market in which dealers disseminate their own price feeds through proprietary trading platforms, it is crucial to learn the features of the trading software which a person is looking forward to use in a Demo Account before he actually commits real funds to a Live Account. He can do that by downloading a free demo version of the software.

With the help of forex demo, the person can see how some platforms integrate everything from charting to news on one hand, while on the other hand have very simple layouts which focus only on quoting price, reporting and order entry. Some platforms mark the order location on the chart while others simply use pop-tickets. In a typical scenario, in order to buy a currency pair, you just click on the offer part of the quote (also known as ask), and if you wish to sell, then you should click on the bid option. There are platforms that allow the user to limit orders or select a market after the quote window pops up, while there are others which ask to make a selection beforehand. The ideal number of demo trades to place in each platform of forex demo is around 20, before the user actually goes in for live account trading , so that he can understand as well as master the specifics of order entry on each platform effectively. A trader should not trade live unless he is able to understand his limit order, and when to stop, whether he can mix and match the sizes, the lot size he can trade at a time etc.

Since forex is a global unregulated market, tax reporting is usually overlooked. Hence tax report becomes the sole responsibility of the trader. Therefore, a trading platform with highly organized and flexible reporting functions. Reporting quality varies from one trader to another. Some FX traders may generate many trades in a single year. A platform that reconciles all those trades into an easy-to-understand yearly statement of income and expenditure, breaking down the profits made and expenses incurred, is very helpful. Hence reporting becomes a crucial part of a trader to keep personal records and at the same time, it has great significance for ramification of tax.

After mastering the components and having confidence in using the tool, the person then utilize the demo platform to experiment with various trade styles and sizes on a trial and error basis. And doing this he may also find out if he is more interested in short term trading or long term trading.

The user should from the very beginning make it a point to make use of demo trading as productively as possible. He should trade the demo account if the money was real.

So it can be observed that forex demo forms an integral part of forex education and such education provides better and safer opportunities for aspiring traders who wants to make a mark in this industry.

by: Micha lewi

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