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Leverage 1:888 does not apply to client registered under the EU regulated entity of the Group. The maximum leverage for Trading Point of Financial Instruments is 30:1.
- Opening a Demo trading account with XM
- 3 Steps to open XM trading account in Demo
- Demo MT4 and MT5 trading accounts are for practice
- Can I open multiple XM MT4/MT5 Demo accounts? Any limitations?
- What you must know when trading in Demo accounts
- What is online Forex trading?
- Why you should trade Forex with XM?
- Example of Forex Currency Trading
- 7 things you must know before trading Forex online
- Access to XM’s Forex Educational Materials for free
In this article, you can find out how to register for XM Demo (virtual) trading account.
Opening a Demo trading account with XM
XM provides its traders free Demo trading accounts.
By opening a Demo trading account with XM, you can experience their trading environment without risking your own funds.
At XM, demo accounts do not have an expiry date, and so you can use them as long as you want.
3 Steps to open XM trading account in Demo
To open XM’s MT4 or MT5 Demo account, please follow the steps below.
- Signup and Register for XM online
You need to fill in some personal information. The online registration may take only a few minutes.
- Install MT4 or MT5 trading platform
The download links for XM’s MT4 and MT5 platforms can be found in XM Official Website.
- Login and Start trading risk-free
The virtual money is already there as you have chosen. Now start trading to practice and experience the trading condition of XM.
After opening an account with XM, you can also access to XM MT4 and MT5 platforms through their mobile apps.
The download links for the XM apps can be found in XM Official Website.
Demo MT4 and MT5 trading accounts are for practice
One of the most important things to do before starting to trade with your own money is to use a demo trading account – no doubt about it.
Because a demo account is the place where every new Forex trader learns how to deal with the ups and downs of Forex trading.
However, demo accounts don’t always offer the same market situations as real trading accounts in terms of trading conditions.
Things such as initial trading capital, slippage, re-quotes, latency time in execution, spreads and liquidity gaps aren’t factors in demo accounts.
So, how can a trader best transition from a demo account to a real account and deal with these challenges?
Can I open multiple XM MT4/MT5 Demo accounts? Any limitations?
Yes, you can do that.
There is no restrictions on the number of Demo accounts you can open.
Demo accounts will expire if the account is inactive for longer than 90 days.
You can use it longer as long as the account is active.
To open an account, please visit the XM’s official website and proceed to register online.
For the account comparison table, please visit the page here.
What you must know when trading in Demo accounts
1. You need first to understand what demo accounts are used for
XM’s Forex demo accounts offer FX traders the opportunity to learn more about the trading platform, as well as to get familiar with the different types of orders and trading conditions they offer.
They also help FX traders get a feel for trading and market dynamics to avoid basic and unnecessary trading mistakes that might trigger avoidable losses.
New traders should, however, be aware that demo trading is limited.
For instance, they can’t properly validate your trading system and its profitability, because you do not have the same trading conditions as a real account – there are different psychological factors at play because it’s not your money.
Even though making money on a live account should be as simple as it is on a demo account, it’s not uncommon to hear traders say their strategy that made money on their demo account, is now not making much money at all after transitioning to a real account.
2. The difference in performance is mostly due to technical and behavioural differences
Brokers often offer demo account balances that are way higher than what you would normally deposit.
These unrealistic balances affect your risk, money and position management.
And these large virtual sums encourage traders to make riskier trades than they should.
This is an unrealistic basis on which to start trading, and it can also become a habit that might be hard to break.
3. Changing market conditions
Market conditions also constantly change, which can be relatively hard to manage for new traders, such as ranging versus trending markets and volatile versus quiet markets.
Not to mention demo accounts simulate an ideal trading environment, which you’re not likely to find in the real world – especially regarding processed orders, with your positions being executed at the exact price and time specified.
For these reasons, performance in demo accounts tends to be better than in real accounts where you have to deal with supply/demand constraints, your psychological issues and information transfer limitations, as well as other technical issues that can pop up from time to time.
Trading financial markets on demo accounts are also psychologically different than with real accounts, which most traders underestimate, if not outright misjudge.
While the mechanics are the same, behavioural changes happen, and your emotions often take over your reason, technique, and trading strategy.
This is because, with a demo trading account, you are using virtual money, while if you’re trading a live account, you are using your own money.
And there is no doubt that fear of losing money is the single biggest factor that affects every trader.
4. How to seamlessly transition from demo to live account
First, you need to recognise and accept you will face losses because they are inevitable at some point and they are a part of your learning curve.
It’s also important to only risk the money you can afford to lose.
Start small and always continue to trade small.
Then, it’s vital to trade according to your investment strategy described in your trading plan, with a focus on risk management rules with small positions and a risk/reward ratio of 1:3.
This trading plan will help you be more consistent with your profits and reduce your emotional engagement while trading, as it’s important to protect your emotional capital too.
Even though you might think to move from a demo to a real account is an easy step, it’s usually a struggle that can lead to avoidable losses.
Always remember to
“plan your trade and trade your plan”
based on logic and reason, not emotions.
What is online Forex trading?
Forex refers to trading in foreign exchange markets, i.e. trading with currency.
The name Forex originates from the English term FOReign Exchange, which means: currency or coins.
With daily sales of more than 5 trillion US dollars, it is the largest liquid financial market in the world.
You can also take advantage of the changes in value in the international foreign exchange market.
Make the most of the advantages offered by XM.
- Excellent profit opportunities
- Leverage effect of 1:888
- No intervention from agents (execution of orders through NDD)
- Low spreads, No costs or commission
Why you should trade Forex with XM?
The trading of currency is based on the simultaneous nature of the purchase and sale of different currencies on the interbank market.
These transactions generate the exchange rates, therefore the value of any currency can be expressed in terms of any other currency.
Currencies are always traded in pairs. Therefore, it is not possible to buy or sell just dollars. Euros are bought or sold for dollars, dollars for yen, etc.
Currency trading uses the so-called leverage effects.
XM’s highest leverage of 1:888, for example, means that the trade becomes effective on the amount of capital invested multiplied by 888.
Thus the opportunities of making a profit increase substantially.
The decisive advantage of trading currency is in the limitation of losses (stop-loss-orders), whilst the opportunities for making profits are unlimited.
Example of Forex Currency Trading
When trading with a batch (100,000 units of currency, for example USD) the value of the Pip (smallest possible change in the value of a currency) is 10 USD.
You believe that the Euro will increase against the USD, you buy the Euro for 1.1605 and sell it for 1.1625.
Your profit: 20 Pips (difference between 1.1625 and 1.1605).
20 * 10 USD = 200 USD.
Which is a profit of 40% on an investment of 500 USD.
The usual changes are normally about 100 Pips per day.
7 things you must know before trading Forex online
If you are new to Forex trading, then you may want to learn about the market, platforms and create your strategy before.
By opening an account with XM, you can also access their educational materials for free.
XM will educate you to get started, and will continue informing you with the latest market news and trends.
Here are 7 things you must know before start trading Forex online with XM.
1. What is Forex currency pairs?
This is the most critical instrument for trading in foreign exchange markets, the most traded market in the world.
Currency pairs can be described as the rate of currency exchange relative to another currency.
Some of the most traded pairs of currencies in the Forex market are; GBP/USD – Pound, EUR/USD – Euro, USD/JPY – Yen, USD/CAD – Canadian Dollar, USD/CHF – Swiss Franc and the AUD/USD – Aussie.
It is estimated that these currency pairs constitute up to 85% of the entire volume in the global foreign exchange market.
2. What is Bid and Ask Spread?
Most currencies are quoted with a bid price and an ask price.
The bid price is usually quoted lower than the ask price because the bid price is the price at which the broker is willing to buy; it is therefore the price that the trader receives if he wishes to sell.
On the other hand, the ask price is the price at which the broker is willing to sell; this price should entice the trader take the marked-price and buy.
For example EUR/USD 1.2546/49, or 1.2546/9, means that the bid price is set at 1.2546 while the corresponding ask price is set to 1.2549.
3. What is Pip?
This represents the smallest incremental move that is made possible through currency trading on the global futures exchanges.
Many brokers quote currency pairs to one extra decimal place so that the price can actually move in fractions of a pip.
The term stands for price interest point. For example a change in EUR/USD currency pairing from 1.2747 to 1.2762 is a move of 15 pips.
4. What is Margin Calls?
If the balance available in the trading account falls short of the maintenance margin, which is the required capital for keeping a position open, a margin call will occur.
When a margin call arises, the broker will either buy back in the event where a short position has been taken by the trader or sell-off the entire trades if the trader has bought.
If this occurs, the trader is left with only the maintenance margin left in his account, which is a stable low risk holding position.
Margin calls can also occur in situations where there is an occurrence of improper money management.
5. What is Margin Leverage?
In trading many financial markets, it is often a requirement to pay the full value of the trade before it is executed by the broker.
However, in forex trading all that is required for you to have available is a deposit for the margin and the remaining amount is covered by the broker.
XM offers leverage up to 1:888.
6. Forex Exchange Market Dynamics
To demonstrate the market mechanics of a foreign exchange market trade, a situation may arise where a trader believes that the British Pound is likely to rise in value.
The trader then decides to take action and put to risk 30 pips, thereafter in an event that sees the market move in the opposite direction to the trader’s position, the trader will end up losing 30 pips.
On the other hand, if the trade moves according to the trader’s beliefs, the trader will gain 60 pips.
Recent developments in technology have seen a rise in accessibility of the forex market. This factor has resulted in the growth in trading opportunities such as on-line trading platforms.
Another huge benefit today concerning currency trading is that players do not have to be big money hotshots or money managers to begin trading.
What this means is that any willing investor can enter and trade in this huge market.
7. Currency Trading Precautions
Traders and investors willing to invest in the Forex market should understand that trading in foreign exchange on the basis of margin calls carries with it a high level of risk.
This essentially means that the Forex trading market is not meant for every interested investor.
Potential Forex currency traders should carefully consider their investment options, risk appetite and level of trading experience before taking up currency trading.
It is always critical before you decide to indulge in currency trading to have a good grasp of the foreign exchange trading basics, including the basic concepts and more complex strategies.
Some of the pertinent issues that you need to focus on prior to opening a live currency trading account include; risk management and trading psychology as well as any dynamics of the financial markets.
Forex trading may lead you to lose part or your entire investment portfolio; this means that traders should be careful not to invest money they believe they cannot afford to risk.
In case you are in doubt about any trading move or if Forex trading is suitable for you, it is recommended to seek advice from a qualified independent financial advisor or an investment authority.
Access to XM’s Forex Educational Materials for free
It is quite easy to learn how to trade on Forex market – said on the websites of many broking companies.
Also it is confirmed by the experience of thousands of private traders worldwide.
However, there are many ways to learn Forex trading.
For example you can visit special seminars held by professional traders to learn their methodology of trading and their vision, their experience, and probably you will be missing the core part of success – the elaboration of your own unique vision and trading strategy that can suit you much better and that can be much more beneficial for you.
You can learn on your own, searching for the right information in the internet, separating the truth from the lie, and wasting a lot of your time.
Or you can use the information provided on the website – XM have collected for you all, that will help you learn the basics of professional trading and to improve your skills and abilities, thus avoiding the many mistakes that beginners frequently make on the market.
All information on XM’s official website was collected by experienced analysts and traders, therefore, all the information will be accurate and relevant.
Have you already been trading with XM?
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