The international foreign exchange market and market for contracts for differences — Forex and CFD — are dynamic markets on which you can earn a lot of money. The profits grow with the use of leverage. In order to be able to invest on such markets and to reap actual financial benefits, you need to choose a broker to cooperate with. Young traders usually have doubts as to the criteria to be taken into account when choosing the broker’s offer. A demo account that allows for testing the transaction platform offered by the broker will be helpful. How to choose a demo account in order to be fully satisfied with it? Here is how to Choose the best demo account for yourself on the Forex and CFD market.
To begin with — what is a demo account?
A demo account, also known as a test account, is an account provided to new clients by the broker (find out more: www.xtb.com), thus giving them access to the transaction platform. Thanks to it, they do not have to open a regular account and sign a cooperation agreement with the brokerage firm; instead, they test the functionality of the account and the platform itself. On this account, the client receives funds that they can freely trade, although they are only virtual. On the test account, the trader does not risk their own money when placing the first buy and sell orders for assets available on the brokerage platform. They can test investment strategies or use leverage without taking any risks. They must also be aware that possible profits generated this way will be virtual, as well.
After the trial period, the client may, but usually does not have to, open a brokerage account with a given firm and start using it for real investments, upon payment of a minimum deposit required by the broker.
What to pay attention to when choosing a demo account?
The demo account should be set in conditions as close to reality as possible in order allow for testing new strategies and currency pairs without any risk. Clients choosing a demo account should note which trading platform it is assigned to and whether it grants access to its full functionalities or only some of them. It is recommended to test a platform which is ultimately of interested to the client — it may be a desktop, browser or mobile platform. Desktop platforms are designed to be installed on the computer’s hard drive, while browser and mobile platforms provide freedom of investing and monitoring investments from any place in the world.
One should also check how much money the new client receives on their demo account. Most test accounts are opened with virtual capital of USD one thousand, but there are also those that offer a lot more money to spend on transaction testing. The more money, the better, because such a virtual account will give the traders more time to test the markets, as they will be able to withstand losses that would end the careers of the vast majority of investors.
An important factor in selecting a demo account is verifying whether it provides access to market analyses, indicators or comments of market experts, which the trader can rely on when making investment decisions.
Standard demo accounts on the Forex market and CFD market are free, but it will not hurt to check if this is also the case when it comes to the offer selected by the client. The broker should also not oblige the new client to create an investment account after testing its platform. This way, one can choose the best demo account on the Forex and CFD market that suits the trader’s individual needs.