Practicing using forex simulator trading is the best way to learn how to trade forex and other commodities without exposing yourself to any risk. Trading simulators get slightly delayed quotes, and are usually free or usable for 30 days without paying, and they allow you to see how your trades would have fared in the real market before you commit to investing your own money.
If you’re just starting out, it is absolutely essential that you practice using forex simulator trading before trading on the real thing. Forex trading carries high risk, and you need to be absolutely confident in what you are doing before you put real money down.
What Should I do With My Practice Platform?
It takes years to learn the ins-and-outs of technical analysis, but what you should be doing when you’re making practice trades on your simulator is learning what all the tools do, and how they can be used to implement a forex trading system strategy. You can find many of these strategies online for free, but if you don’t understand what the numbers and the tools mean, you won’t be able to implement them with any kind of confidence.
The point of a practice platform, I always feel, is twofold: The one reason you would want to use it is to learn as much as you can about support and resistance, Bollinger bands, the Stochastic metric, and all of the other tools you can use to more accurately predict the movement of a forex pair. The other reason we use them is to teach us the perils of emotional trading. After you’ve lost $100,000 of imaginary money on your practice platform because you were sure the price was going to shoot up, but you didn’t confirm your suspicion with hard data, you’ll be much more careful about trading emotionally.
How Long Should I Practice For?
This is entirely up to you, but it is recommended that you use a practice platform daily for a month to learn the ropes. You will probably lose a lot of imaginary money, but you will learn a lot and pick up some reliable trading strategies. Then you clear the account, start again, and trade foranother month using your practice account, and the strategies and skills you have developed. If you then make money in your second month, you are probably ready to try trading for real.
Does it Matter Which Platform I Use?
Your choice of platform matters greatly, for two reasons. The one is simply usability and interface, but this is not much of an issue as many platforms these days are based on similar software, and all provide similar features.
The main reason, however, is that you want to make sure you use a trading platform that is run by a reputable company, and one which makes their own market. This means that trades are matched by the company you are dealing with, rather than by other brokerages or other investors. This makes trades much faster and eliminates the dangers of losing out on arbitrage, and it also makes it much safer – you don’t want to lose your investment because some cowboy loses $100 million and the entire market loses liquidity.