Contents
- 1 What are the best FX brokers that have demo accounts and how to find them?
- 2 What are the demo accounts and how exactly do they work?
- 3 You can evaluate the reporting system of the FX broker
- 4 Why are demo accounts so important for beginners?
- 5 What are the differences between live accounts and demo accounts?
- 6 What are the benefits of using demo accounts?
- 7 Should you use demo accounts to trade FX?
Forex trading is a field that is always developing and changing. Over the years, as it managed to get very popular online, different types of accounts were created for FX traders. One of them is the demo account, which managed to become very popular among traders from all over the world.
No matter you are a beginner or experienced trader, it is always a good idea to start by opening up a demo account so that you can understand what the FX broker is really about. With demo accounts, you have the ability to test out everything about FX broker and check if it is worth to trade with them with real-life funds or not.
Most importantly, trading with a demo account is totally risk-free, which means that you do not have to risk your hard-earned money. In addition, you have access to everything on the broker that you would have if you used a regular Forex trading account.
In this guide, we are going to talk about the best FX brokers that offer demo accounts and the ways to find them. So, if you want to learn more about this type of account, follow our detailed guide.
What are the best FX brokers that have demo accounts and how to find them?
If you have ever tried to find a perfect FX broker that fits all of your needs you would know that it is not an easy thing to do. The market is full of very good FX brokers and it sometimes is impossible to know which one is better than the others. It gets even harder when you are new to the market and don’t really know what you are looking for.
To make your job easier, we have decided to do research on our own and test out many different Forex brokers. Finally, we were able to come up with the list that you can see below. All of these brokers are very safe to use and have one of the best demo accounts, so, check them out and start trading now.
Licences
FCA, CySEC, IFSC, ASIC, DFSA
Min. depo
$5
Leverage
1:888
Platform
MT4, MT5, WebTrader
XM
Licences
ASIC, FSA, FSCA, FFAJ, FSRA, FSC
Min. depo
100 USD
Leverage
400:1
Platform
MT4, MT5
AvaTrade
What are the demo accounts and how exactly do they work?
Simply put, the demo Forex trading account is the one that allows account holders to experience the whole Forex trading market without risking their own funds. This type of accounts is offered by many FX brokers around the world to give potential clients the ability to trade Forex with virtual money and test their skills, strategies, and even the broker itself.
Because of the fact that the FX market is decentralized, the majority of the Forex brokers have their own price feeds that are spread through their own trading platforms. With FX demo accounts, traders are given the ability to check out how the trading platforms work and make their final decisions regarding the FX broker.
Because of the fact that the demo accounts are created to simulate the way live accounts work, they are basically the same in every aspect as the real live accounts are with the only exception being that instead of real money, traders are given virtual cash that they can use. When it comes to price quotes and charts, they are the same as what the traders will get when they start trading with actual money. These types of accounts generally have two goals. Firstly, it aims to give potential clients the ability to check how the FX broker works, and secondly, to give traders the ability to test their trading experience and tactics. This is also a great way to work on your trading strategy or come up with a new one altogether.
You can evaluate the reporting system of the FX broker
Demo accounts are a very important tool when it comes to the evolution of the reporting system of certain trading platforms. In most cases, beginners overlook the reporting aspect of the trading platform, because of the fact that they are mostly focused on the way the trade is executed.
However, traders have to also remember that the profits earned from trading the FX market can be liable for taxes. The brokers that operate internationally do not have to provide any information on tax liabilities or handle any tax documentation on behalf of a trader since the tax laws are pretty different in every country.
Because of the fact that the traders are required to provide the information to local authorities, they will depend on the trading reports a lot. With demo accounts, you can test out how useful the reporting is and how fast can you get the information, which can be very helpful for many FX traders.
How do you open up a demo account?
Generally, the process of registering a demo account is pretty much the same on most of the FX brokers. The brokers are trying to make this process as possible and in most cases, it will take just a few minutes and a few basic details such as your name, email address, and phone number, to create an account.
Why are demo accounts so important for beginners?
First of all, every Forex trader should understand that Forex trading is not an easy thing. Although it can provide FX traders with a lot of opportunities, it also is very risky, especially if you do not know what you are doing. FX brokers are required by law to make sure to warn clients about the risks that come with trading Forex.
Because of all of these, it is very important for beginners to use FX demo accounts as much as they can and learn everything about Forex trading and the strategies that they can use for a more successful experience.
With demo accounts, traders will also learn a lot about the foundations of trading and use the knowledge that they get to further build their strength in the trading world. Basically, these accounts offer traders the experience that is very important and necessary for successful trading.
What are the differences between live accounts and demo accounts?
The main and most obvious difference is that you are not losing your own money. The balance that you have on your demo account is fictional money, the amount of which is different on most of the FX brokers. With this demo accounts, you are not winning or losing anything, only the virtual cash in at stake. Also, in case you are out of the virtual money, you can always contact the support team and get the virtual funds back.
In addition to the differences in money, the psychological differences also come into play. Many experts have said that traders are more confident when trading with virtual funds, which helps them learn a lot more about trading this way. If you still have not decided which FX broker to use, below, you can check some of our top picks.
XM
Min. Depo
$5
Licences
FCA, CySEC, IFSC, ASIC, DFSA
Leverage
1:888
Platforms
MT4, MT5, WebTrader
AvaTrade
Min. Depo
100 USD
Licences
ASIC, FSA, FSCA, FFAJ, FSRA, FSC
Leverage
400:1
Platforms
MT4, MT5
Exness
Min. Depo
$10
Licences
CySEC, FCA, SFSA
Leverage
1:2000
Platforms
MT4, MT5
FundedBull
Min. Depo
49 USD
Licences
N/A
Leverage
N/A
Platforms
MT4, MT5, cTrader
Forex.com
Min. Depo
$100
Licences
NFA, CFTC, FCA, FSA, IIROC and CIMA
Leverage
1:50
Platforms
WebTrader, MT4, MT5
CMTrading
Min. Depo
250 USD`
Licences
FSCA
Leverage
1:200
Platforms
MT4, WebTrader, Copykat
Plus500
Min. Depo
$100
Licences
FCA, ASIC, CySEC, FSCA, FMA, MAS
Leverage
1:30
Platforms
WebTrader, Windows 10 Trader
What are the benefits of using demo accounts?
In addition to all of the things that we have already talked about, many of the Forex brokers around the world are working very hard to come up with different ideas to make demo accounts more popular among traders. One of the things that have become very popular over the last few years is the ability for FX traders to win real-life funds through different competitions that are created especially for demo account holders.
With this, traders who are just starting out and have never had access to the world of trading, have the ability to start trading Forex with demo accounts and if successful, get a certain amount of money from FX brokers that they can use for real-money trading.
Should you use demo accounts to trade FX?
We very much recommend demo accounts to everyone who traders Forex. No matter you are a beginner or someone who has been trading Forex for a long time, there is a lot that you can learn by using demo accounts. It is especially important when you are trying to find a new FX broker. Demo accounts are becoming very popular and this is not for the wrong reason, they are a great help in many cases and we recommend trying them out.