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Forex simulation software to boost your trading skills

March 22, 2016 14:00 UTC

Forex simulation software

There are who believe that traders are people with higher financial education or with a large sum of money they can afford to invest right away. Others might think that Forex traders have analytical mind they were born with. In truth, what makes one a trader is not just many hours of learning, but thousands of practice hours. In this case only, you will be able to understand the market, get used to the price and its movements, develop your optimal strategy, and make your first profit. Surely, you either need to have a lot of spare money to spend in the process of training, or you can use Forex simulation software, which can be found in abundance online. If you follow this path, you won't have to spend any real money before you've gained sufficient experience and made sure your profits exceed losses and expenses.

When you are choosing simulation software for currency trading, you should consider a number of points. In this article, we will tell you about the main features of most FX simulators, point out the popular options that you have, and provide you with an example of the software that we believe to be the best choice for aspiring traders who are looking for trading practice.

Key features of the best Forex simulator software

When you'll start exploring the available options for Forex simulators, you'll see that all of them can be divided into two groups. The first one is software that simulates the market environment with the help of simple algorithms; it might be helpful only during the first steps of your trading journey. The second group is software which employs complex algorithms to provide the beginners with a real trading experience; this option will be perfect for you until you learn all the necessary aspects of FX. This is the one we'll pay attention to in our article.

Real-life trading experience

You'll be able to get the proper experience with Forex trading simulation software that recreates the real market conditions. While simple trading software will provide you with a simulated price chart, the advanced software will have a chart with real-life and real-time prices. This will allow you to get acquainted with the market and the way prices fluctuate, and to recognize the price trends and what causes them.

Admiral Markets account

Adjustable trading capital

When trading with simulation software, you can choose any sum for your account balance. The good thing is that you are not limited financially, as this is virtual money anyway. We recommend that you practice with an amount that you are planning to use when trading for real. If you haven't decided on the size of your capital yet, you can try any amount and see which you are most comfortable with. A realistic amount will help you to better understand what your stop-loss, take-profits, and margin levels should be. Keep in mind that your capital is a very important factor when it comes to developing a strategy.

Complex trading experience

If you are an absolute beginner, you can be set for a while with simple Forex simulator software which will allow you try only the basic features. However, when you are developing as a trader, you'll probably want to try some extended features and possibilities. It is normal for traders to switch from one simulation platform to another, more advanced. The earlier you do that the better it will be for your trading knowledge and skills, especially if you are going to be a day trader. In case you feel that positional trading is a more preferable methodology for you, than you don't need to go for extra complexity. As you won't need to perform technical analysis several times a day, the basic features for long-term traders will suffice.

The right broker

There are brokers behind all Forex trading simulation software; they distribute it to traders allowing them to get the necessary experience and then start trading on their platforms with real investments. You should understand that not all brokers are the same, and not every one of them will be taking good care of the quality of your trading experience. You should make sure the broker is well trusted and that their platform has all the necessary instruments you are looking for. They should also have descriptions and guides that will help you learn to trade using that particular software. There are also situations when you might be looking for a very specific instrument that only some brokers provide — do some research on them before creating an account and downloading their applications.

Choosing the right simulation software

Once you have looked through all the key points that could help you to tell the right software from the average one, let us see the two main examples of the popular software choices. The first one is The Forex Game, and the second one is MetaTrader 4. The former will let you get a glance of what trading is and how it can be done. It is suitable for beginners, and you won't need to spend too much time with it trying to understand how everything works. The second application will be a real challenge for a rookie, but it will provide one with essential experience and complex understanding of the trading process. Let us look at them below.

Option 1. The Forex Game

The Forex Game is a free Forex simulator software for Android portable devices. It is a pretty simple app which can be easily downloaded and used on the go. Except being free, it has other positive features. For example, it simulates prices' behavior on the market, which provides traders with some valuable experience. Also, the application allows placing stop-losses and take-profits, which teaches you how to trade safely right from the start.

Option 2. MetaTrader 4

MetaTrader 4 is the kind of Forex trading simulator software that is designed specifically for professional traders-to-be. It is widely popular among currency traders around the world, mainly because of its advanced functionality. Those who have tried their demo accounts with MT4 are likely to continue trading with real money, after gaining the sufficient knowledge and experience.

MT4 is a multi-feature trading software in which you will find any instrument you might want to use in your strategy. For instance, it has a one-click trading terminal that can make your short-term system extra fast and effective. Charts are available in 9 different time periods, and more than 50 indicators can be used in various combinations. What's more, all the prices are real, which makes your experience lifelike.

The MetaTrader 4 Forex simulator is available online thanks to Admiral Markets. The best thing here is that this broker provides the application absolutely at no cost for its users. It is not just some limited-period trial version, but a full-featured demo account with no expiry date. You may use it as long as you need to become confident in your trading skills.

Top 3 tips that will make your practice more effective

As soon as you have decided to get involved in currency trading, you need the right mindset from the very start. If you want to succeed in real-life trading, then try to follow the tips below even in your demo simulation account.

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Trade as much as you need, but not more

There are traders who get deeply involved in trading with their demo accounts with different simulation software. While normally it should be regarded as an intermediate step that precedes live trading, some might get stuck with simulators. After overusing their trial accounts, people often have enough before they reach the live trading stage. Set yourself an end point where you'll make the switch from training to practice, may it be a certain sum, or a time period, or a certain number of profitable trades.

You won't reach success without failures

The market games are not arcades. When you have lost, you cannot undo or come back to the place where you came from and start all over again. A real Forex trader should be able to face the losses and take important lessons out of them. Any result is a result, and any outcome will bring you the invaluable experience which you can analyze and then use to your benefit. Trading is associated with risks, and risks often lead to failures. You must need to accept this from the very beginning, as you are trying out your demo account.

Show some devotion

Forex simulation software does not give you revenue. However, it doesn't mean you are just having fun. You are learning, which is an important step on your way to real-life profitable trading. The more dedication you'll demonstrate, the more effective your learning will be. Treat your trading simulation session as if you were trading with your own money.

Summing it up

FX simulation software and demo accounts are necessary for rookie traders to gain the necessary experience and, as a result, to become professionals. It is important that the software of your choice, such as MetaTrader 4, provides you with lifelike market experience and an advanced set of trading instruments. This way, you'll not only learn fast, but will already have an understanding of how to manage your funds effectively and make solid earnings.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.