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What is a Demo Account?

A demo account is in place to facilitate simulated real-time trading conditions, virtually the same functionality as a live trading environment. It’s a great educational tool, as you can practice your new trading strategies. Whether you choose technical analysis or fundamental analysis, here is the place to hone in on your skills and experience market conditions before entering into a real account.

Setting up a Demo Account with FP Markets

The procedure is simple to set up a demo account with FP Markets as the website will walk you through it step by step. Choose whether you want to sign up using your Google, Facebook, or another email account. The next step is to fill out a short form and wait for the verification email with your login information.

The Metatrader 4 (MT4) trading platform can be downloaded and installed on your PC or mobile device. Proceed to open the MT4 platform and click on the ‘File’ menu to log in with the details that were emailed to you.

Assuming you’re a beginner trader, this may seem daunting at first. Proceed to explore the platform and familiarize yourself with all the features. You will be provided with a virtual balance of $100,000, to begin with. Additionally, the prices and charts will be displayed in real-time, therefore providing you with an in-depth experience.

In order to access trading tools, click on the ‘Insert’ tab and you will be presented with features such as trend lines and indicators.

For more in-depth articles relating to technical analysis, go to FP Markets educational section on the website. We have all been in this stage of the learning process, however, take the necessary learning steps before placing a trade. Demo accounts are an excellent tool to acquire practical trading skills. Education is the key to successful trading.

What is a Live Account?

• Setting up a Live Account with FP Markets

In order to register for a live trading account, you should already be familiar with the trading platform after extensively practising on the demo platform. Moreover, trading plans should be in place before you start live trading.

• Make an Informed Decision About Your Broker

It is important to do your research on what products and services are offered by your broker. Check if the broker meets your needs, such as tight spreads, advanced portal and trading platforms, EA and Scalp trading allowed, a high number of years within the industry etc.

Moreover, you should consider your legal jurisdiction and personal needs before proceeding to open a live account.

• Required Documents (KYC)

Clients will be required to provide some personal details in order to register for a live trading account. In addition, they may be requested to provide identification documents such as Driver Licence, Passport, and utility bills. Once the client’s identity has been verified, they will be allowed to trade on the live platform.

• Funding methods

Multiple funding options will be available to the client, however, it is important to consider the time for the funds to be received and applied to the trading account. Additionally, clients need to consider if there are any fees in relation to certain Payment Service Providers (PSPs) upon depositing and withdrawal.

• Live accounts vs Demo accounts

Live trading accounts allow retail clients to trade a variety of asset classes with actual funds. However, this slight variation does create a distinct difference between live accounts and demo accounts, as the client is not as emotionally invested in their demo account. Furthermore, clients may have instilled negative habits by trading with virtual funds as there are no consequences.

The other key difference to note is that demo trading is not completely identical to live trading conditions. In particular, demo accounts will not be able to fully replicate the liquidity of live trading during major news events or when there is drastic price movement in the markets. Therefore, it may be worthwhile testing the live platform with smaller sized positions before proceeding to trade as per the initial outlined strategy.

To Summarise:

It is important to familiarize yourself with the trading platform before opening a live account by testing the demo platform. Conduct thorough research to ensure your broker has all the services you require and review all the legal documents before you sign up.

Additionally, it is recommended to test a live platform with small position sizes before proceeding to place full-sized trades as demo trading does deviate slightly from live trading conditions.

Finally, remember to constantly apply yourself by studying the markets every single day and never invest more money than you can afford to lose.