Below is a glossary of terms that are used in the online trading industry. Select the first letter of the word you are seeking from the list above to jump to the appropriate section of the glossary.
What is a practice account?
A practice account, also referred to as a demo account, is just like a regular forex trading account in every way except for one – the trader does not invest, earn, or lose any real money. It provides traders with the opportunity to learn forex trading and develop effective trading strategies through experience, without the risk inherent in actual trading.
How does one use a practice account?
Many online brokers, including Fortrade, provide a practice account free of charge when traders register on the site, and “fund” the account with a sum of money (Fortrade, for example, starts traders off with $10,000 of imaginary money). Once the practice account is set up, you can start trading as though you were investing actual funds. It is a good idea to trade conservatively, at least at the beginning. A trader who “invests” unrealistic sums of the imaginary funds in the practice account simply because he has nothing to lose in real life, is not able to benefit from the purpose of having the practice account, which is to develop effective trading skills for when actual funds are being invested. Most experts and experienced traders recommend trading on a practice account for several months before investing real money. Click here to create a Fortrade account, and you can start with the practice account today.