Have you ever considered using forex demo accounts to learn the basics of forex trading? To many professional forex traders, a forex demo account is indispensable in training and self-education even after they have started live trading on the forex market for a long time. It helps a lot in testing forex strategies without the risk of running a loss, especially for radical trading strategies that you have not much information or confidence in. Before we talk more about the use of forex demo accounts, it is important to understand some potential problems that may arise with their use. Firstly, the forex quote feeds used in a forex demo account may be different from the real live market feeds. Coupled with the fact that no real money is involved, all the simulated trading decisions made often have significantly lesser emotions and impulsive influences compared to live forex trading where fortunes were made and destroyed over a single decision. Secondly, forex demo accounts may generate a false sense of invincibility especially when a series of winning trades were made in the simulation. It is well known that most humans are unable to make the correct decision when under heavy pressure and emotions often blur our rational thinking processes. In reality, you may need to experience a few hundred times of stressful decision making before you are able to choose the right trade most of the time. Of cos it can get very expensive to do so in live trading, that is why forex demo accounts are so useful in this training aspect. On the problem of having different quote feeds being used on forex demo accounts and live systems, it is only a matter of technicality. If you are learning forex trading on a system that does not offer real live quotes, you can just switch to another free provider online since there are so many of these available.

The advantages of opening a demo forex account definitely outweighs the above mentioned problems as long as you are aware of their effects. On the very least, you learn how to use the forex trading platform such as MetaTrader 4, GTS platform, FXcast PRO, PureDeal etc to read the market indicators and execute a trade correctly. You can continue to practice on every required trading function until it becomes second nature to you. Only then are you ready for the live forex trading. This is important because the forex market is extremely volatile and exciting. You need to develop that so-called market intuition, which is actually your collective body and mind reaction to the all market indicators and signals. You can study all the forex market theories but you need the practical training and familiarization with the trading scene in order to apply these theories to execute the correct winning trade in an instant. That is the unique feel for the Forex market that many experienced forex traders have developed and what amateur onlookers deem as secret forex strategies.

Actually there are no secrets to instant success in forex trading. Due to the volatile market movements, there is no single universal trading strategy to use all the time. There are probably a billion forex trading strategies created by traders worldwide. Maybe these helped someone made some money at some point in time, and these strategies made nice boasting recounts at the bars and some are even romantic and elaborate enough to make it into forex trading books. There is perhaps a unique winning strategy for each unique market conditions, and hence there is really no point trying to learn all the strategies created in history. Computers are fast enough and can be programmed to recognize billions of forex market scenarios and retrieve the winning trading strategy someone has came up with in the past, but we all know that even such attempts are no sure wins in real life trading. That is because there are always some factors that has not be accounted for in computer analysis and that is where the market intuition of successful forex traders come into play. Training on a free online forex account is the best and cheapest method to developed market experience.

It is probably a good idea to start losing money consistently on forex demo accounts rather then to win and develop false confidence. Making mistakes and losses on the heavily leveraged forex demo accounts such as 500:1 or even 700:1, will soon wake you up to practice risk management strategies on every trade you make. This will allow you to learn about minimizing risk and cutting losses when switching over to live trading.

Forex demo accounts are also good for testing trading strategies, counter strategies, back testing etc. This is the difference between newbie and veteran traders who will continuously test and back test all the available market indicators tracked within the demo platform. Such testing often results in finding that little bit of information that provides the advantage to winning trades in that fast changing forex market. Without all these testing information to back up your decision, executing a trade can becomes a blind click of the mouse.

Nowadays, you can open a live forex trading account for as low as 25 bucks, although that does not mean you should just throw it down the drain by not using the forex demo accounts to learn and train on the basics of forex trading.