Intro: you probably heard about forex, and the ways you can earn without spending much time onto it. But you’re still unsure if you should start trading with your hard earned money? No worries because you can still experience the thrill and learn more about how to forex trade by using a forex demo account South Africa!
Briefly explaining forex trading
Forex, also known as currency trading, is all about buying or selling currencies for making profit, as currencies either increase or depreciate in value over time.
Before getting into making a forex demo account, it is essential for you to know about certain terms which can make you learn more quickly so you can enter the ecosystem as fast as you can.
Here are some terms you should know while starting your best forex demo account:
- Currency pair: two currencies are shown together e.g. ZAR/USD (ZAR being South African Rand and USD being US Dollars) showing that ZAR is the currency we are trading against Dollars. If it were shown as USD/ZAR, it means we are competing Dollars against Rand.
- Leverage: the amount of money we borrowed from a trading account, so that the trader has to spend low expenses, while maintaining a high contract size.
- Bid and ask Price: the traders who are willing to sell a currency for a demanded price of their own choice. The other trader, who is interested in buying the currency puts forward their ask price.
- Go long: meaning you are investing in a currency which will increase when in demand. The first part of the pair is bought and the other part is sold. E.g. ZAR/USD where rand are bought by you while you sell the US dollar to the bidder.
- Going short: to sell a currency because chances are that it will depreciate after sometime. E.g. The first part of currency is sold to buy the second currency.
- Margin: the small amount in the form of investment, of currency value, to be paid in order to start trading. This amount can later affect your profits and loss.
- PIP: known as Percentage In Point which shows the amount of exchange paid for the currency pair. Most currency pairs in forex have 1 PIP for 0.0001
- Lot size: basically, the transactional amount the trader opens. 1 Lot is equal to 100,000 units (standard). There are small lots as well ranging around 100, 1000, and 10000.
- Bearish and Bullish: here meaning of Bearish is rates are decreasing whereas Bullish means rates are going up.
How to make demo account
There are plenty of people who use a forex demo account South Africa to learn about the ecosystem. This is the most effective way to get to know more about the forex industry, as you won’t be losing money.
However, remember to take this trial seriously while creating best forex demo account if you intend to invest real money on the line.
Here’s how you as well, can make a demo forex account to learn more:
- First, chose a broker to trade like MT4, MT5 which are very well known globally. You can choose any broker site which you find suitable.
- The site or application will lead to a dashboard or homepage.
- Sign up and confirm the account with your email.
- Verification steps are introduced so that only you are in hold of your account and it is secured.
- Head over to your profile or account. Select the settings option.
- An option for creating an account would be visible– will ask for the type of account you want, so choose demo since you want it on trial basis.
- Choose your leverage – keep it realistic as high the leverage the more people tend to lose money even on a trial basis. So keep it within middle range (100-200) you can later change your leverage if you see you are good at trading.
- Then choose your balance or deposit according to the amount you will want to deal with in actual forex trade. Remember to keep it safe so you don’t risk too much money. It is best to choose the lowest available option.
- Finally click “create account”.
- Your account is created and your account info will be emailed to you.
How to use forex demo account?
Here is step by step guide on how to use forex demo account.
- You need a broker, and a trading platform.
- After setting up your demo account as shown in the steps above, you will be able to see all currency pairs and all charts.
- It is recommended to remove all currencies shown to you if all of them are present, so you can start fresh and only focus on the currency of your interest.
- Chose the add option to enter the currencies of your choice. The options may range between, indices, energy, metals, stocks, cryptocurrency, etc.
- Then head over to the charts section, and choose the colors for every currency as it will make it easier for you to study the pattern.
- Now you need to choose your RSI or relative strength index. To do that, click the bottom of the screen, between 20 and 80.
- After that, select the indicators where you should head over to RSI.
- There will be many options but you need to choose RSI from the options.
- Enter the period to 14, the ‘apply to’ at close so you don’t bid too high. Keep the level at 20. All these tips are recommended.
- Now you can place your trade. You can choose to buy or sell by market by choosing from the charts that are displayed.
- Keep note that before placing your bid, you check for all terminologies at the bid screen display so you are aware of how these numbers work.
Best demo forex account to make on
Here are some of the best forex demo account which are very well known in South Africa. These accounts will guarantee you to learn the forex trade system for a quality of time, while covering every aspect of forex business.
Here are the top 3 forex platforms to make forex demo account South Africa:
FP markets: giving unlimited access to your demo account, this platform will also provide great educational tools for you to understand better. However remember to be an active user on here as it will expire if remained un-used for 30 days, and will not be recovered back.
HotForex: having a customer support for 24/5, it also gives it’s user guidelines to understand better
FXTM: another great platform providing exceptional educational material and guidelines for you to understand very easily. It is easily, the best known site for beginners with a 24/7 support system.
I am sure with this guideline and step by step process you must have learnt how to use forex demo account. Now, you can easily move in the forex system at any rate. Remember to take this learning process seriously and so you can find yourself amongst the top players in forex trading in the near future using your forex demo account South Africa!