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In online forex trading, newcomers are not usually ready to begin trading immediately, because they lack the experience and knowledge required to avoid making losses. Forex brokers are very aware of this and have made provision for novice investors to practice trading through dummy or trial accounts.

There are many benefits for a newcomer to work initially through the demo forex account offered by most forex brokers. These include;

1. A realistic live system, but using fake money.
2. The system provides a trading platform for the trainee to become familiar with forex trade.
3. The new investor can become accustomed to looking at forex rates, currency converters, various charts and see how it all works.
4. The investor is in no risk of losing money while using the dummy forex account.
5. The trainee investor will gain vital experience, which will help once the decision is made to go live into forex online.

The trainee account can also help the forex exchange traders to judge whether the system is suitable to your trading and easy to use or not.

The investor should be aware that the demo systems that are offered by some brokers do not operate in the same manner as the brokers live system. When going live the forex exchange market will not take into account that the investor is a newcomer and mistakes cannot be corrected.

There are also several pitfalls in using a demo forex account that the newcomer should be aware of and can therefore avoid, as follows;

1. Not all trial trading forex accounts work the same once the investor goes live.
2. It is human to take more risks when you know the money being used is fake.
3. That the transition from using fake money can translate into bad habits when moving to using live or real money. This lack of discipline can cause the investor to lose money.
4. A newcomer may be inclined to disregard the opportunity to check how well the brokers system works and may look at using a dummy forex account as a waste of time.

Online forex trading for the inexperienced investor is full of risk. To minimise this risk newbie investors should learn forex trading by using a demo forex account in order to gain experience. While doing this, check the forex exchange broker’s trading platform and systems to see either they are compatible with your objectives or not.

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