GCC in general and UAE in particular used to mainly be all about oil and commodities, but as the area experienced a financial boom, Dubai became a real international financial hub.
In order to learn how to trade forex, the majority of brokers offer a free demo trading account. This can be used to place risk-free trades across all the currency pairs they offer, using fake money in a virtual environment, essentially a forex trading simulation. Before anyone starts forex trading for real these offer a great opportunity to get to grips with the market, how it works and practise your strategies but only if you use it effectively.
Trade One Major Pair at First
Given there’s no risk, it can be tempting to go crazy and start trading all sorts of currency pairs. This is unlikely to teach you much, other than how to lose a lot of money quickly. For beginners, trading multiple currency pairs will start to get confusing and difficult to keep tabs on everything. Instead, focus on just one major currency pair as not only will these likely be the forex pairs you will trade in real life, but they are the most liquid with tighter spreads. Constantly trading the same pair will help improve your overall trading process too.
Apply Different Strategies
Sticking with the same currency pair, apply a range of different trading strategies to see which one best suits your style, or provides the most success. It could be through making fast trades or scalping, practising your day trading discipline or going in for the long haul with position trading. After trying out these types and other strategies, you should hopefully pick out which you prefer to concentrate on further practising that with the demo account.
Take Your Time
Don’t try and rush through using a forex demo trading account so you can begin exchanging currency pairs for real as quickly as possible. Take your time to define a strategy, choose a pair and understand how the processes work. Some demo accounts may only last for 30 days, but make sure you use all of this time effectively.
Check the Details
All forex demo trading accounts offer different terms and conditions, so it is important to check what these are to find the best option for practising currency exchanges. Compare how long you can use the demo account for, how much risk-free money you can trade and whether the full range of features for a live account are available or not.
A forex demo trading account is a vital tool for all new traders and experienced ones to practise on. Always use one before moving onto trading on the live markets.