What is the difference between a demo account and a Forex practice account? It's very easy. A MetaTrader 4 demo account (also known as a Forex practice account) is a trading account that allows you to trade with virtual currency.
A practice account is a useful tool for many reasons. If you don't have one, it's highly recommended that you open one. This guide will explain why you should create a practice account. It also explains how to make a fore demo account for MetaTrader 4.
Why should you open a Demo account?
A Forex demo account offers many benefits for traders. These are the most important:
- Virtual money: A demo account contains virtual money so you can trade without risking any of your savings.
- Verify the broker: Brokers often offer the opportunity to open a forex demo account. You can then test out the settings and conditions of the broker. This will allow you to test the broker's settings and conditions, such as connection speed, margins, limits, features, support, and so on.
- Check your expert advisors and scripts: It is a good idea to run a script or expert advisor on a real account before you start running it on a real one. This will allow you to verify that it behaves as expected. It is not desirable for an expert advisor or script to open and close insane orders using real money. It is a good idea to test the code first before you commit.
- Test your strategy: Let's say you have a new strategy for trading. Before you use it with a real client, you will need to test it back to see if it has been profitable. It is important to compare the current market conditions with your strategy. You can test it using a free forex demo account to see if it performs well.
Why not create a demo account?
There are differences between a Forex practice account or a live trading account. These are the most important:
- Trading psychology: It is very different. It is different to trade with virtual money. You don't feel as much risk and therefore the psychological reaction, discipline, and mentality are not comparable.
- Historical data is not available: Some brokers will limit the historical data that you can access in a forex trading demo account. You will usually only find a few weeks of data or a few months. This means you won't be able to back-test your strategy for a long time.
- Trading execution may differ: A forex demo account is the same as a live account, in terms of limits and margins. It is hosted on different servers. This can lead to slightly different execution of orders.
There are some differences but there is no reason to not open a demo account. Read on to find out how simple it is.
Requirements Information
You will need to provide some personal information, such as your name, surname, and contact details, in order to open a forex demo account. You don't need to provide bank or credit card details. Forex Trading Demo accounts, as mentioned above, are free.
Multiple demo accounts can be opened with the MT4 broker you choose.
How do I open a demo account?
Nearly all brokers now allow you to open forex demo accounts. You are invited to test their services in the hope of opening a trading account.
If you haven’t yet installed MetaTrader, please refer to our guide How To Install MetaTrader 4 Client Terminal. After the installation is complete, you will be asked for a connection to a server as shown in the image below.
You can cancel an existing forex demo account by clicking Cancel. Then, right-click on the Account in the Navigator panel and select Login to Trade Account. Click Create a forex trading Demo Account.
You will need to fill out a basic registration form to create a demo account. You will usually receive your demo account credentials by email.
To log in to your forex demo account on the MetaTrader4 platform, you will receive the login, password, and server.
Once you have opened a forex demo account you can trade and test your strategies and MQL codes.