Even accounting for a pronounced dip since 2013, the daily trading volumes associated with the forex market remain incredible high. An estimated $5.3 trillion is traded every single day in this marketplace, as investors look to leverage the single most liquid and agile financial market in the world.
If you’re going to succeed as a modern-day forex trader, however, there are certain things that you’ll need in your armoury. Knowledge and determinism are key, of course, as is the way in which you treat volatile price movements and manage your risk profile.
Above all else, however, you’ll need to execute your trades through an online trading platform. Here’s why:
Bridge the Gap between Theoretical knowledge and practical experience
When you sign up with an online trading platform, one of the first things you’ll notice is that there’s an option to open a demo account. This is arguably the single biggest advantage of trading through a virtual platform in the modern age, as this helps to bridge the often-cavernous gap between theoretical knowledge and its application in the real world.
Demo accounts can usually be leveraged for between three and six months, and their core benefit is that they replicate corporeal, real-time market conditions. By simulating a live marketplace, they enable traders to test their strategies in an entirely risk-free environment, as they look to hone their skills and avoid learning harsh lessons by investing for real. As a result, they can experience a practical learning experience that delivers exceptional results and helps them to retain their hard-earned capital.
As you begin to trade forex through your demo account, you can also strive to diversify your assets over time. This is because the majority of online platforms offer access to a huge range of markets, assets and derivatives, enabling you to diversify your interests and build a more purposeful knowledge base. Most importantly, the strategies that you hone through your demo account can be quickly adopted in the corporeal market, optimising gains and minimising risk in the process.
Using demo accounts to your advantage
Its recommendable that you use your demo account for as long as possible, as this enables you to get the most from the feature. It will certainly help you to build practical experience of the forex market, while also honing your sense of determinism and making you a more effective financial trader. With a greater understanding of the market, you can hit the ground running and make the most of your trading capital.
On a more fundamental level, accessing a simulated but real-time marketplace will allow you to familiarise yourself with your chosen trading platform and its range of analytical tools. You can therefore use these (along with any associated risk management features) to your advantage, while you’ll also be able to determine the optimal times and sessions during which to trade. These are relatively small details by themselves, but when combined they have a cumulative effect that can deliver considerable returns.
As you can see, it’s imperative that you trade through an online platform in the modern age; otherwise you’ll struggle to safeguard your capital and gain a true competitive edge.