Learning Forex trading from scratch with minimal financial commitment
Forex trading, as mentioned in the introduction section, is quite a challenging financial exchange that requires a lot of time and energy from traders. While the most successful Forex traders get massive payouts from this exchange, they also put in massive funds, risking their financial stability and security.
This goes to show how Forex works: in order to succeed and make serious gains, traders usually make thousands of dollars of deposits on their accounts. That’s what makes Forex trading a high-risk, high-return exchange.
But this doesn’t mean that beginner traders cannot learn Forex trading step by step without risking too much money. And while there are many ways of accumulating knowledge in this field, some traders prefer to start small with minor financial commitments. This way, they don’t risk too much and are able to acquire real-life experience in Forex trading.
On the other side of the spectrum, there are traders who want to do Forex without depositing any money on their account. It’s yet another way of stepping into the complex world of Forex and not risk your finances. So, there are two popular account types that allow minimum/no deposits requirements:
and there are also:
- Micro accounts
- Demo accounts
- Mini accounts
- No deposit bonus accounts
And while many service providers also offer the mini and no deposit bonus accounts, the micro and demo accounts are more popular in the industry. So, let’s take a look at both of them.
Minimized deposit sizes with micro accounts
As noted above, trading Forex with smaller deposits is possible via micro accounts. Various financial institutions that deal with Forex trading, as well as other types of financial exchange, offer micro accounts to their customers that are specifically designed to make trading easier for beginners.
So, how to learn Forex trading with micro accounts? In many cases, micro accounts have no minimum deposit requirements, however, in rare cases when they do, it usually revolves around $50. And when it comes to making lots - buying actual currency pairs - micro accounts allow users to make lots as small as $10.
This is usually why many beginner and even experienced Forex traders choose micro accounts in the first place. They require very minimal financial commitments from the customers but still remain realistic because even when choosing a micro account, it’s still possible to lose funds.
Another reason why traders opt for micro accounts is the availability of comprehensive trading tools and platforms. Even though Forex traders are buying the least amount of currency pairs, the account providers still allow them to use various tools such as spreads, leverages, analytics and charts, etc. This way, traders usually gain more experience and risk considerably fewer resources.
Demo account - learn Forex easy without investment
One of the biggest fears of many beginner Forex traders is the risk of losing funds. And while they’re not the only ones being afraid of a financial loss, they’re usually more susceptible to it because of their lack of knowledge and experience.
In the previous chapter, we talked about micro accounts and how they enable Forex traders to minimize risks by making deposits in incremental sizes. However, there are some traders who want to completely eliminate the risks and use the platform given to them for practice.
But can you learn to trade Forex for free? It turns out that yes, and one option that is popular among beginner traders is called a demo account. The biggest difference between the demo account and any other type of account is the lack of financial commitment from the Forex trader. This means that traders can use various trading tools and mechanisms while paying nothing in return.
Experienced traders also use demo accounts
Not only that, even some experienced Forex traders find demo accounts useful. You see, there are many strategies that can be used in Forex trading and more often than not, putting those plans in motion proves to be the best way to test their effectiveness. And here’s where demo accounts come in: traders execute their plans on a virtual Forex market where charts and prices are real, while there’s no financial commitment or gain associated with trading.
But again, the beginner Forex traders tend to use demo accounts more often because they gain knowledge and experience of the most crucial elements of this type of financial exchange while risking nothing in return.
But it’s not like demo accounts don’t have their drawbacks. Some traders stay away from this method because, in their opinion, it’s totally separated from real life and evokes no emotional response from traders.
They argue that the real losses and payouts are the main reason why people learn and get more experienced in Forex. And having no incentive of winning or no fear of losing breaks the emotional connection. This, in turn, makes the learning process less effective.
That’s why when searching for the best way to learn Forex, some traders tend to avoid the method of demo trading because they prefer the risks that force them to make more calculated decisions; while others tend to go easy and acquire knowledge step by step using demo accounts.
Can you make a living trading Forex?
The two account types mentioned above - micro and demo - have proven to be quite useful for many Forex traders who want to make initial steps in this business. And while even some of the most successful traders tend to use these accounts for various reasons, there’s one significant downside with them:
The accumulated payout from trading using micro accounts is quite incremental, not to mention the absence of it in demo accounts. And since many traders usually get into this business to make a living, these accounts are probably not very helpful in the long run.
But it doesn’t mean that Forex trading doesn’t lead to massive payouts at all. As mentioned earlier, it’s a very speculative and risky exchange that also leads to gains in some cases. And to make it possible, almost every financial exchange offers standard accounts with real-life payout possibilities.
The standard accounts are usually ranged in different experience levels, starting from beginner all the way to the VIP. But one has to keep in mind that almost all of them have larger deposit requirements that seldom go below $200. So, if you’re interested in getting a Forex trading training for free, there might not be many options on this front.
But again, as some traders tend to point out, getting a real-life exposure to real payouts and losses is more effective in accumulating knowledge in Forex trading. Truth be told, there’s no one well-tested method that works perfectly for everyone. It’s usually all about testing out different methods and seeing what works best for you.