Risk Free Forex Trading - Trade A Demo Account
Forex is a complex market and hard to trade. This means that even the most carefully planned trade can go wrong. It is possible to use risk management to mitigate some aspects of risk. However no risk management can counteract the complexity of the Forex market. Nonetheless the trader can study Forex thereby increasing their knowledge and understand why trades worked and did not work.
However there is a way to trade Forex with no risk. This is to use a demo account. A demo account uses virtual funds. Virtual funds are not real money and can typically be refilled (or the trader can open another demo account). This means that when a trade goes wrong, the virtual funds are depleted and the trader's real funds, which are on the live or real account, assuming the trader has opened one, are unaffected.
What a demo account means is that the trader can explore risk in the Forex market, without risking real funds. They can learn how to use tools such as technical indicators, or try pattern analysis and see that signals can often not work out. One approach to trading is to let winners run and cut short losing trades. However the complexity of the Forex markets means that apparently losing trades can become winning trades and apparently winning trades can become losing trades. That is direction can change and patterns can form and deform into something else. This is one reason why traders use robots to trade for them, as they will not be deflected from their trades, as a human trader might. But this does means that robot can produce losses where a human trader would exit.
The trader can perform charting analysis specifically to look for the potential of a market to change direction, for example multiple time frame analysis to see where support and resistance may form and analysis based on value levels to see where changes in momentum and direction may happen.
Dukascopy Bank has been picked for its demo trading. Dukascopy Bank is a long established Forex broker, which has a range of other markets as well. Dukascopy Bank is an ECN broker, and supports a wide range of Forex trading styles. Thus it is a broker which a dedicated Forex trader may wish to check out. It offers MetaTrader 4 (MT4) and JForex. Both platforms support both trading where the trader executes their own trades and automated trading with robots. JForex has a relatively large number of technical indicators, though MT4 lets the trader build and download indicators. So on the demo account, available below, the trader can try Forex trading platforms, learn how to use them then trade Forex pairs seeing the risks prevalent in this market. When they feel comfortable, they may proceed to a rel account, which has a minimum deposit of $1000 at Dukascopy Bank. Dukascopy Bank offers Forex leverage up to 200:1, however increasing leverage increases risk.
