Forex trading involves dealers providing their own prices through a Forex trading platform, which makes it important for traders to give each platform available a try before making transactions that use real funds. This is where demo dollars are useful; they are used by a potential trader when he uses the free demo version of a dealer’s software. Demo trading benefits the trader because it enables him to become familiar with placing of orders according to the layout provided on the platform used.
Different Types of Forex Trading Platforms
Basic Platform: A truly simple layout distinguishes the basic platform from other types. What are provided in this platform type are only the account balances, order entry positions and price quotes, which are all clearly spelled out on the platform layout.
Integrated Platforms: Other types of platforms that provide additional data on top of those found in a basic platform are called integrated platforms. Charts, trade summaries and market news may be included and fitted in a single screen.
Trying Out Demo Platforms
A trader should familiarize himself first on the different layouts of a variety of Forex trading platforms, and the only method available for him to do this is to take their demos out for a test drive. Different platforms provide different features; some have layouts that place a mark on an order to chart its location, while others may make use of pop-up tickets.
Buying a Currency Pair
A trader only has to click on the “ask” part of a quote to let him purchase a currency pair. On the other hand, the “bid” part is clicked to enable him to sell a currency pair. Other features provided by other platform types include letting the trader select his orders (limit or market) after the pop-up ticket is shown, or giving the trader no choice but to make his choice of orders before the quote window appears.
Mastering Order Entry
For a trader to gain knowledge on the details of entering an order through each demo platform he tries out, it would help him to practice placing orders twenty times before attempting to trade with real funds. Trading live becomes a possibility after he is able to master the following steps involved: placement of a limit order, setting a stop, and setting a limit and a stop at the time of entry. The trader should also be able to tell whether a platform has variable or fixed layout; the lot size (number of units) that can be traded; whether lots sizes may be traded in different combinations; and if his internet connection gets cut off, if he can directly contact the dealing room.
Mastering the Forex trading basics offered in demos first makes it more likely for a trader to gain profits when he does trade using real money.