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The 15 Best Resources to Learn Forex Trading Online

When starting out in online Forex trading, you must understand the mechanics of the Forex market. If you want to preserve the cash balance on your brokerage account, at the very minimum, you must have some concept of economic fundamentals and technical analysis.

The primary influences of the Forex market are global macro-events and news, providing the potential to make significant trading profits from the volatility.

If the FOMC cuts US interest rates unexpectedly, currencies are likely to move wildly. Inexperienced traders may be unsure how to trade in volatile markets and make irrational trades in panic. Experienced traders with a system, trade without emotion and will always benefit when the inexperienced do not.

Without having a robust strategy or trading plan in place, trades are mostly thoughts only, and thoughts are emotions. It is a weak base from which trade. Getting a Forex education and developing a trading plan is vital if you want to thrive as a forex trader. How can you do this?

There are different ways to study Foreign Exchange basics before you dive into the volatile world of live Forex trading. There is also no reason why it should cost you any outlay with an extensive number of free Forex learning resources available on the internet.

An FX trader analyzing a trading strategy

The Best Free Forex Resources Online

Until you understand basics like the Forex currency pair quotation system, trading terms, and market participants, you will not be able to move on and develop a robust strategy for forex trading. Free resources are available online to help you get the basic Forex education necessary to move forward and trade. The top trading resources for mastering Forex basics are:

1. FX Street

The A to Z of everything Forex from the basics to advanced strategies, FX Street is an accessible resource in the online trading community. It has a significant education section providing hundreds of articles and videos and which you can access directly here.

2. Forex.com

An extensive library of educational content is available at Forex.com. This well-regarded CFTC registered online broker caters for all levels of trader from the newbie to the experienced pro and it is free to open an account to access the full suite of educational trading resources. They include, an academy, tutorials, beginner webinars and popular guides. Here is a link directly to the webinar section.

forex.com image of website education section

3. Investopedia

Interactive learning from basic up to mid-level education, Investopedia is an all encompassing bible of financial information which is easy to navigate with a simple to understand layout.

4. Babypips

Great for beginners to understand the basics of Forex by presenting complex information in a simple way. They have their School of Pipsology, an excellent free online course to help newbies learn how to trade FX. Baby pips also have a busy forum where you can ask any Forex related question and expect to receive an answer from a member of this thriving community.

5. Investing.com

A forex trading website that can help beginner traders by providing free to use information and resources, including educational material via their education hub as well as analysis and real-time data.

6. Bloomberg TV

Expert panelists and reporters will provide you with copious amounts of Forex market information to digest. Immersing yourself in Bloomberg TV every day is a necessity to get an understanding of the FX market.

7. Youtube

Learn from Youtube channels dedicated to Forex from researching tools and platforms to videos explaining trading concepts. Here is an example of a high quality beginner Forex tutorial made available on Youtube by Trading 212 which has more than 1.2 million subscribers.

8. DailyFX

A free-to-use site, DailyFX provides real-time news, live market data, and in-depth technical analysis for those looking to build their Forex education. A dedicated education section includes free trading courses, guides and research.

9. TradingView

Excellent for charting, TradingView, through cloud-based software, allows all traders to track and research the Forex market with customizable charts. Importantly, TradingView has sections dedicated to education and research.

10. Forex Factory

Forex factory has a trades section where beginners can watch live trades placed by a more experienced market participant. An excellent forum section hosts a broad range of active Forex related discussions.

The Best Free Online Forex Courses

Online courses train you to read charts, understand price dynamics, open and close positions, and see developing patterns, a further move towards developing your trading strategy. We see courses as an integral step to learn how to trade forex.

There is a number of free online forex trading courses to choose from. We have selected our best five

11. Udemy

Udemy, the well respected learning resource offers free Forex trading courses which you can browse here.

12. Ava Academy

Ava Academy is provided by the online exchange, Avatrade and has free Forex courses ranging from topics such as an introduction to technical analysis and how to start trading-the quick and dirty way.

Here is the link to the online courses at Ava Academy.

13. Class Central

Class Central is an aggregation service that finds free courses including Forex trading from all over the top learning platforms on the internet. Below is the direct link to free online Forex trading courses.

https://www.classcentral.com/subject/forex

14. FX Academy

FX Academy is a highly rated, educational website with a significant number of Forex courses ranging from an Introduction to Forex Trading to Trading With Double Bollinger Bands.

15. Tutorialspoint

Tutorialspoint offer a very comprehensive free multi-chapter Forex trading course covering everything from types of market analysis to fundamental market forces and position sizing and money management. The course can be accessed here.

Finishing Your Online Forex Education

Once you think you have covered the basics through free online resources and furthered your Forex education with online tutorials, it is the time to develop a strategy.

Unless you have done so already, you will need to open an account with an online broker, and the final stage before you start trading with real money will be to hone your strategy on a demo account. A reputable CFTC regulated broker like forex.com will allow you to open an account and practice in their demo environment.

Forex resources, ourselves included, advocate getting hands-on experience by using a demo account. Learning not only to develop or fine-tune a strategy but also to familiarize yourself with your broker’s online platform to avoid making order placement errors when you commence trading live.

We wish you happy trading – From everyone at Axcess FX

Written by Chris Gillie

Chris Gillie is the founder of Axcess FX, a forex software review and research website. He is a former investment banker who worked in FX Sales on the UBS London trading floor. Chris has been using forex trading software as part of his trading set-up since the late 2000s and the embryonic days of MetaTrader and the MQL coding language.

An Insight Into The Global Forex Market

Forex, is an abbreviation for Foreign Exchange and refers to the global market where currencies are traded. As the world’s the largest financial market, it is central to global trade, economic growth and investment.

Market participants from governments to individual investors look to profit from currency moves or hedge against them. Forex is also an an important financial barometer as it influences economic policy and global economic stability.

The Size And Scope Of The Global Forex Market

The global Forex market is the world’s most liquid and most significant market. In 2022 the daily trading volume in Foreign Exchange hit a record 7.5 trillion US dollars according to the Bank for International Settlements (BIS) in it’s triennial survey. The next survey will come out in 2025 but just to put the growth in Forex in perspective, in 1998, the daily volume was 1.5 trillion US Dollars illustrated in the chart below.

chart of turnover growth in the forex market from 1998 to 2022

To put this huge figure in context against other markets, as of April 2024, the average daily trading volume of all the U.S. stock markets combined is 478 billion US dollars and the cryptocurrency market, 558 billion US dollars.

With the Forex market representing such massive daily turnover from continuous trading across multiple time zones and borders, it influences economies much more than other financial markets.

Key Forex Market Participants

There are several major players in the currency markets that all play an important role in the market. They are government central banks, major banks, financial institutions like investment funds and large corporations, brokers, sophisticated investors and retail investors.

Government central banks: The U.S. Federal Reserve and other central banks play a central role by setting interest rates and applying monetary policy which directly influences FX rates.

Major banks and financial institutions: These market participants engage in high-volume Forex trading that impacts exchange rates through their speculative trades or hedging activities.

Brokers and retail investors: The advent of online brokers and electronic trading platforms has seen retail investors enter the market, as brokers now provide the same market access, that was previously limited to the large players. It also contributes to the Forex market’s liquidity and dynamism. In 2022, retail foreign exchange was 5.5% of all daily global Forex turnover.

Currency Insights

Forex trading, is a 24-hour market operating across three trading sessions in Europe, the United States, and Asia. Although the trading sessions overlap, the major currency pairs of each market will have more volume during specific trading sessions. Major investment banks like UBS will trade the European session in London from 7 am until 5 pm, upon when the trading books are passed to the U.S. desk in New York. At the end of the U.S. session, the trading books are then passed to the Tokyo office and then passed back to London to complete the loop.

The Forex market can be traded 24 hours around the clock, but not quite 24/7, as Saturday is when no trading takes place in the major markets.

time zone clocks including London, New York and Tokyo

Currency prices can be very volatile, especially in emerging market currencies and cross currency pairs that tend to be less liquid. Factors affecting the movement of currencies include geopolitics, macroeconomic data, unexpected events such as catastrophes, market supply and demand and trade flows.

Currency pairs are crucial for Forex traders as they represent the value of one currency relative to another, offering profitable trading opportunities based on correctly predicting FX rate changes. Understanding the nuances of each currency pair is vital for effective trading.

The Most Traded Currencies And Pairs

Although there are more than 50 currencies traded globally, surprisingly, the market has relatively few major currencies that contribute to its significant daily trading volume.

Currencies that have a major impact on daily trading include Sterling, the Swiss Franc, the Euro, US Dollar, Japanese Yen, and the Australian dollar. These currencies are the base for around 18 currency pairs that dominate volume with the most traded currency pairs being EUR/USD, GBP/USD and USD/JPY.

a currency chart highlighting the volatility of a currency pair

Data from the most recent BIS triennial survey indicates that the US dollar was on one side of almost 90% of all Forex trades in 2022. Furthermore, almost 80% of all Forex trading occurs in major Forex trading hubs which are key financial centers and include London, New York, Tokyo, Singapore and Hong Kong.

The US dollars dominance is due to:

A large presence in offshore funding markets where institutions raise debt with almost half of debt issuance being denominated in USD.
The dollar is popular for global payments and international trade where around half is invoiced in USD.

Forex Trading Mechanisms

Foreign exchange sees currency pairs traded as one against the other. It means that when you buy one currency, you are selling the other currency in the pair. Currencies quote in pips, which are a percentage in points to four decimal places and represents 1/100 of one percent of a currency. The quotation system is entirely different from the securities markets where you either buy or sell a single stock, bond, or exchange-listed fund.

Compared to the thousands of individual stocks that we can buy or sell, the currency market also seems very slimmed down. All the major currencies are available in a variety of trading forms including spot and forward foreign exchange and derivatives, including futures and options.

Spot market: Spot Foreign exchange is where currencies trade at current market prices for settlement in 2 trading days and is the most liquid and popular instrument.

Forward foreign exchange: Forward FX is where currencies trade at current market prices but settle at a time in the future, like 3 or 6 months. The price is adjusted to take into account the time differential in interest rates between the two currencies in the pair.

Futures and options: Futures and options are derivative contracts (which means derived from the underlying currency pair) where margin or premium is agreed to buy or sell currency at a predetermined price at a future date.

Leverage also plays a key role in Forex trading as it allows traders to control large currency exposure with a small amount of capital, amplifying profits but also losses!

Strategic Approaches In Forex Trading

Success in trading Forex requires the ability to create strategies using techniques including fundamental, technical and sentiment analysis. Understanding and implementing these methods enhances a trader’s means to make informed trading decisions in a volatile market.

Fundamental analysis: This is the evaluation of economic indicators, geopolitical events and central bank policies all of which influence currency movements.

Technical analysis: The focus on using charts and mathematical indicators to predict future price movements based on previous trends in the market.

Sentiment analysis: Gauging the market’s mood and positioning through various indicators, assisting Forex trader’s in spotting potential market shifts.

If you are interested in learning more about Forex, below is an excellent video that covers all the basic knowledge to start you on your Forex trading journey.

Written by Chris Gillie

Chris Gillie is the founder of Axcess FX, a Forex software review and research website. He is a former investment banker who worked in FX Sales on the UBS London trading floor. Chris has been using Forex trading software as part of his trading set-up since the late 2000s and the embryonic days of MetaTrader and the MQL coding language.

Our Fap Turbo 3 Review (updated 2024)

The FAP Turbo 3 is the most up to date version of the Forex Auto Pilot (FAP) series of forex robots. It follows on from the original FAP and FAP Turbo 2. The FAP Turbo 3 is another of our robot reviews (updated for 2024) where we will look at the strategy employed, evaluate performance and look at trader feedback.

Our review, together with the full facts at the official website will help you decide whether FAP Turbo Version 3.0 can help you trade profitably.

History

The FAP Turbo has been around for over ten years, with the original FAP launched in November 2008. It was developed by a team of professional forex traders and programmers and is one of the earliest forex robots made commercially available for purchase. FAP Turbo 2.0 followed, and we are now on the current version 3.0. FAP 3 which has over 85,000 worldwide users.

The FAP is a fully automated forex trading robot meaning that both identifying and placing trades are done automatically. It differs from semi-automatic trading software where the decision whether to place an identified winning trade remains with the human trader. FAP Turbo 3.0 runs on the MetaTrader trading platform.

What Trading Strategy Does The Fap Turbo 3 Use?

The FAP Turbo 3.0 provides users with two different forex trading strategies available in separate trading modes. The legacy scalper strategy from previous FAP models is still available and is known as Scalper Mode. Version 3 now includes the new Medium-Term Strategy (MTS mode) algorithm. The aim of FAP Turbo 3.0 is to move away from scalping to medium-term trading.

Scalper Mode

The Scalper trades more frequently than the MTS mode, and like many forex robots, the legacy scalper works best in rangebound conditions. The developers have built the Scalper algorithm to trade the night session in the cross over between the US and Asian trading sessions, which is known to be a quieter trading session.

The Scalper targets opening between 1 and 5 trades targeting small take profits on each trade. Algorithms uses a specific 15-minute chart timeframe, indicators, and filters to create trade signals. Signals include RSI, MA, and also volatility filters and opening time filters.

The Scalper is programmed to trade eight currency pairs in the same way, including EURUSD, GBPUSD, USDCHF, GBPCHF, EURCHF, and USDCAD.

MTS Mode

The MTS strategy opens trades during the day employing different trade timings for different currency pairs. The MTS does not tie to specific chart time frames like the Scalper. The MTS algorithm is continuously monitoring the markets and will open trades only when its internal indicators identify conditions that indicate a high probability of success. The aim is to trade profitably and not to open trades up in conditions that are not optimal. It employs more substantial take profits and stop-losses of between 20 and 100 pips.

The Expert Advisor works right out of the box with default parameters; however, these can be substantially altered to align closer to a trader’s required risk and leverage levels. More information about strategy and settings are available at the FAP Turbo site

How Good Is The Performance?

The developers of FAP Turbo 3.0 provide performance backtesting using the MetaTrader strategy tester. Below are the performance results from over six years employing the Medium-Term Strategy across the eight currency pairs the forex robot is programmed to trade. The performance does not take live account spreads, slippage, commissions, or live tick data. Furthermore the modelling quality is only at 90%. Best practice back-testing using a tool like Birt’s tick data suite can get modelling accuracy up to 99%. For scalping strategies, not testing at 99% can make a seemingly profitable strategy unprofitable. The below results appea impressive at 90% we would hope this is also the case at 99% where every tick is taken into account.

Performance Results

Find Out How The Fap Turbo 3 Works in 3 minutes

If you have found this video useful and need more information about FAP Turbo 3 you can visit the official website.

Setting Up FAP Turbo 3.0

Implementation

The FAP Turbo 3.0 can be set up with any MT4 Broker. Once purchased, the product comes as a .ex4 downloadable file, a script for MetaTrader, and can only run in MetaTrader 4 software. Therefore, MetaTrader must be already set up on your computer for the EA to operate smoothly at an optimal level.

Once the Robot successfully activates, it needs attaching to the relevant chart from where it will analyze the Foreign Exchange market and trade automatically on your behalf 24/5 as long as your computer is always on; otherwise, you can still use a VPS for continuous robot trading.

Trade settings

FAP Turbo 3 allows you to choose to either run with the default recommended Scalper or MTS settings or tweak the parameters to align closer to your forex trading strategy. A large number of parameters exist; including manually setting lot size which increases the leverage on the trade (making it higher risk), selecting specific days to trade and adjusting take profit and stop-loss levels.

Key Features

Once a customer takes out a subscription, FAP Turbo 3 comes as part of a comprehensive package:

FAP Turbo 3.0 Robot
Free Forex Brokers trading account registration with MyFXChoice and Tallinex
Comprehensive 100-page user guide
Video Tutorials
Optional Virtual Private Server (VPS)

Buying FAP Turbo 3.0

Unlike many forex robots which offer a one-off purchase price, FAP Turbo 3.0 has a different pricing model.

It is available on a monthly subscription of only $39.95 a month including 7-day trial for just $1 to see if the robot works for you & 60 day 100% money back guarantee.

The Robot is available as a direct download from a third party marketplace who will process your payment for purchase.

Forex Trader Feedback

Online trader feedback for FAP Turbo 3 is mixed. Some traders report the EA trading profitably on the default lot size of 0.1 and point to lower leverage levels producing excellent performance. Other traders say performance is erratic across different currency pairs.

Summary and Rating

The refund rate is low; the subscription package is very comprehensive and includes a 100-page guide. There is also a 60-day money-back guarantee offered on the software. Performance appears solid over the six years of backtesting provided by the developer; however, it is not based on real-time quotes and does not take slippage and commissions. Backtesting quality is also only at 90% and not our preferred 99% which is crucial for any strategies where scalping is involved.

We have mixed views on the monthly subscription pricing model employed by FAP Turbo. On the one hand it might be considered more expensive than buying a robot outright; however with constant monthly income streams from subscribers, it allows the robot developers to continually reinvest in software development, keeping FAP Turbo always up to date.

Trader feedback is also mixed. We could not find consistency in the reviews. Instead, a multitude of different areas received feedback, some good and others bad.

Based on our review, with everything considered, we rate FAP Turbo 3.0 with a 3 1/2 out of 5-star rating.

Area Reviewed	Star Rating
Customer Support	3
Price	3
Performance	3
Usability	4
Axcess FX Rating	3.25

Written by Chris Gillie

What Are The Benefits of Forex Trading Tutorials

The benefits of forex trading tutorials range from getting beginners quickly up and running with trading basics, to advanced training for seasoned traders, looking to improve in a specific type of technical analysis.

Tutorials are sufficiently insightful as the people behind them usually come from a trading background and with the varying methods of delivery, tutorials can make the learning process exciting and motivational.

In this article, we will look at the main benefits of forex trading tutorials, but also, the different ways you can take a tutorial and where to find the best forex trading tutorials online. Read on and start your trading journey on the correct path to success.

How Are Forex Tutorials Delivered And Who Would Each Method Suit?

Forex trading tutorials can be delivered in differing formats, catering for varying learning styles and preferences. Each delivery method offers unique benefits and suits the different needs of traders, from newcomers to experienced traders, looking to refine their technique and strategy. In our easy to read table we list each tutorial method to give an instant overview of what might work best for you.

Tutorial Method	Description	Who Would It Suit
Online courses	Online platforms provide structured courses for all levels of trader. The courses can include a blend of written material, video lectures, quizzes and interactive components	Great for self-paced learning
Webinars and live workshops	Live webinars and workshops are conducted by educational platforms and trading experts. They offer real-time interaction with instructors, allowing for immediate Q & As	Those looking for specific topics or strategies
Video tutorials	Platforms like YouTube offer video tutorials, ranging from comprehensive guides to shorts, focusing on specific aspects of trading	Particularly helpful for visual learners
E-books and digital guides	E-books and digital guides offer easily accessible information in written form, serve as handy reference materials and range from basic guides to advanced trading concepts	For those who prefer reading to other learning formats
Interactive trading apps and games	Apps and games are designed to teach forex trading in an interactive and engaging way by gamifying the learning process to make it accessible and fun	For learners who find standard methods overwhelming
Demo trading accounts	Most online brokers provide free demo accounts where traders can practice with virtual money. These platforms are providing the chance to apply knowledge in a risk-free environment	For newbies wanting hands-on experience and knowledge
Mentorship programs	Some traders chose personalized mentorship programs where a seasoned trader gives one-on-one guidance, bespoke advice and direct feedback	For those seeking in-depth, customized learning
Trading forums and online communities	The participation in online communities and forums is a form of tutorial as members share advice, strategies and experience that gives valuable insights and peer support	For those that like to learn through community participation
Seminars and conferences	Attending conferences and seminars affords opportunities to hear from multiple experts, network with other traders	Traders wanting to stay updated on the latest trends and strategies
Workbooks and exercise sheets	Exercise sheets and workbooks provide a hands-on approach to learning, including trading scenarios, strategy planning exercises and calculations	For those who learn best through practice

Table 1

What Are The Benefits Of Forex Trading Tutorials

Here at Axcess FX, we strongly believe in the merits of forex trading tutorials and have identified several key benefits that traders of all levels can enjoy from participating in tutorials.

Constructing a trading mindset

Having the right mindset is just as important as knowledge and strategy to become a successful trader. Forex tutorials typically emphasize the significance of patience, discipline, emotional control and ongoing learning. Tutorials instruct traders to deal with wins and losses objectively and to adhere to a focused approach to trading.

Access to expert knowledge

Many tutorials are produced by industry professionals and expert traders, providing access to real-world experiences and expert insights. Such varied perspectives and advanced trading techniques are not always available in standard texts.

Staying updated

Forex trading tutorials often provide insights into current market trends and how to adjust strategies and trading systems to respond to any changes. As the forex market is so dynamic, it help traders stay relevant and responsive.

Personalized learning

Forex trading tutorials, as we have evidenced in Table 1, come in various formats, from online courses to interactive webinars and video tutorials. The variation really allows traders to select learning resources that best fit their learning preferences and pace to learn, enabling different learning styles and time schedules.

Avoiding common pitfalls

Particularly, for newcomers, it is easy to fall into common forex trading traps. Tutorials, presented by seasoned professionals are well placed to educate about these mistakes. Learning upfront about pitfalls like overtrading and having a trading plan in place can save traders from making costly oversights.

Understanding the basics

Forex tutorials are a great resource for grasping the fundamentals of forex trading. Key topics like how the global currency market works and essential trading terms is crucial foundational knowledge for new traders to successfully navigate the forex market.

Developing trading strategies

Tutorials will explore a variety of trading strategies from both a short-term and a long-term approach. It will include strategies such as day trading, swing trading and position trading. It allows traders to try out different strategies and find one that ties to their goals, risk tolerance and investment time-line.

Risk management

A vital area covered in trading tutorials is managing risk and includes:

Learning about leverage, its risks and how to use it wisely
Understanding how to use stop-loss orders to limit any sudden loss to capital on your trading account
How to trade with just a small percentage of your capital

Finding The Best Online Trading Tutorials

We have outlined the significant number of tutorial methods that exist, ranging from online courses, to webinars and E-books. With such a wide ranging choice, how do you find suitable trading tutorials for your needs?

Don’t worry, if you struggle to find suitable tutorials, we have also done some heavy lifting for you and have drawn up a short list of options for different tutorial methods.

Online course options

Babypips.com offer an excellent free online course for new forex traders at their School of Pipsology

Udemy is a great resource for high quality well-priced forex courses

Webinars

Forex.com offer a range of forex webinars for both beginners and experienced traders and you can find the webinars at this link at their trading academy.

Video tutorials

YouTube is an excellent source for forex video tutorials and an excellent one for beginners, is the Ultimate Forex Trading Course by Raynor, who has almost 2 million subscribers. The course is 2 hours long and the video is below for your convenience.

Demo trading accounts

Reputable online forex brokers offer free demo accounts for beginners to trade with virtual money in a simulated environment. Interactive Brokers, Oanda and Forex.com all offer free accounts for simulated trading.

Mentorship programs

Forexsignals.com offer one of the most comprehensive mentorship programs with access to mentors, a live trading room and proprietary trading tools. We have written a review of Forexsignals.com which you can read about.

Other options include Traders Academy Club and Asia Forex Mentor.

Trading forums

Well known forex trading forums and online communities that are worth checking out include Forex Peace Army, Reddit, Forex Factory and Babypips.

Final Thoughts

Trading tutorials are essential, as without learning the basics of forex, you may incur losses on your forex broker capital account. Armed with knowledge and employing a coherent trading strategy, including risk management, all of which you can learn through tutorials, means you will be well placed to trade proficiently.

Additional Resources

Written by Chris Gillie

Simulated Forex Trading: Why It Is Vital For Traders

Simulated forex trading, also known as paper trading or demo trading, refers to a risk-free environment where forex traders can test strategies, study market dynamics, and navigate trading platforms with no risk of incurring real financial losses.

We have written this article to underline why, if you trade, it is vital to simulate all aspects of your forex system, from strategy to execution, before trading with real money. A simulated environment acts as such a safeguard.

Read on to learn about the merits of simulated forex trading and why it is crucial for traders of all levels.

Understanding Simulated Forex Trading

A simulated trading environment acts as a bridge, enabling traders to transition from theoretical knowledge to practical application. Seven key advantages of simulated trading compared to a live trading environment are highlighted in Table 1 below:

Advantages Of Simulated Trading Over Live Trading	Simulated Trading	Live Trading
1. Fosters a deep understanding of market dynamics with no risk	✔	✖
2. Engagement with real market data without financial exposure	✔	✖
3. Allows for error and learning without financial repercussions	✔	✖
4. Builds confidence in a trading system including trade execution & decision-making	✔	✖
5. Develop, test and refine trading strategies in a secure and risk-averse setting	✔	✖
6. Analyze and learn from trading results without actual financial implications	✔	✖
7. Learn the functionalities of a trading platform before using real money	✔	✖

Table 1.

Most reputable online brokers offer simulated forex trading, each with a varying degree of features and user interfaces. We will cover this in the section about which platforms provide the best simulated forex trading.

The Benefits Of Simulated Trading For Traders: In-Depth

In this section we will cover in detail, each of the seven benefits of demo trading identified in table 1.

Build a deeper understanding of market dynamics without financial risk

Simulated trading platforms allow traders to encounter market dynamics where currency movements, affected by geopolitical events and macroeconomic indicators, can be observed. Without the threat of real financial losses, traders can focus purely on market education including:

Developing a real sense of market trends and patterns
Navigation of varying market conditions and scenarios
Understanding volatility and how to manage it effectively

Engage with real market data without exposure to your capital

Although actual capital is not at risk, simulated forex trading is not just a hypothetical scenario; it is based on real-time market data.

Forex traders are still engaging with live market conditions and, witnessing first-hand how various currency pairs move in response to actual economic data and news events. Being an FX market participant without the risk of capital exposure still provides a genuine feel of the market’s nuances.

Allows for errors and learning due to the risk-free environment

Mistakes are an inevitable aspect of any learning journey. Unfortunately, mistakes in financial trading have consequences, namely a fall in capital on your trading account.

Within the safety of a simulated environment, currency traders can make errors without catastrophic consequences; instead, the mistake turns into a lesson that can be learned from. It nurtures growth, resilience, and a deeper understanding of trading.

Builds confidence in your trading system, including trade execution and decision-making

Continual practice in a simulated setting will solidify a trader’s conviction in their trading system. As they continually apply, test, and adjust their approach in a demo environment, confidence in executing trades and making timely decisions will grow.

Trader confidence, honed risk-free, is a significant advantage when transitioning from simulated to live trading. Compare this to a newbie trader throwing themselves straight into the pressure of a real money-at-stake environment with no practice. Indeed, the confidence derived from successful simulated trading:

Reduces the likelihood of impulsive and emotionally driven decisions in the real market
Prepares traders mentally and strategically for live market scenarios

Enables the development, testing and refining of trade strategies in a risk-averse setting

A simulated trading platform acts as a sandbox for forex traders. Within its confines, you can:

Develop new trading strategies
Test and validate the effectiveness of strategies
Make necessary adjustments and refinements based on outcomes
Ensure that the strategy is robust and applicable to real market conditions

By optimizing their approach without financial setbacks, FX traders can ensure when trading with real money, strategies are well-calibrated.

Analyze and learn from trading results without financial implications

Post-trade analysis is a cornerstone of effective trading. In a simulated trading environment, a trader can dissect their performance, understanding both trade successes and failures. Without the emotional strain of real money at risk, this introspection is more objective and constructive, setting the stage for continual improvement.

a forex trader analyzing trading results

Permits familiarization with trading platforms and tools

Every trading platform has its unique layout, tools, and features. Etoro has its own proprietary trading platform which is different to Interactive Brokers, which in turn is different to Forex.com. It is vital to master your chosen platform to maximise trading efficiency. Forex demo-trading accounts serve as a testing ground, giving forex traders the time and opportunity to familiarize, practice, and master platform-specific functionalities; ensuring they are platform experts ahead of trading a live FX market.

What platforms offer the best simulated forex trading?

Most reputable online trading platforms cater to the needs of traders looking for simulated trading functionality. Some of the notable ones include:

Etoro: A broker with its own propriety forex trading platform that provides demo trading accounts
MetaTrader 4: A platform used by many online brokers in the U.S., including Forex.com and IG, and renowned for its user-friendly interface and comprehensive analytical tools
Interactive Brokers has a proprietary platform called TraderWorkStation TWS with a simulated trading environment.
TradingView: Known for its wide variety of technical analysis tools and social networking capabilities

Each platform comes with its unique features and capabilities, catering to different needs. For more details on forex trading software including platforms, we have a written a guide here.

Drawbacks and Criticisms

Despite the obvious benefits we have identified, simulated forex trading, it is not without its criticisms and drawbacks.

The lack of emotional involvement in a simulated environment can be a drawback and may:

Lead to a lack of accountability for trading decisions
Result in a skewed perception of trading risk and reward

Successful trading in the confines of a demo trading environment may result in overconfidence in live trading due to:

Success in a risk-free environment not necessarily translating to live trading success
Possible neglect of risk management strategies due to simulated success

There are limitations in simulating real market conditions and include:

An inability to replicate the psychological and emotional pressures of live currency trading
Potential discrepancies in data and market conditions between the simulated and live environments

A very good resource is available at Investopedia that further highlights not just the pros but also the cons of paper trading.

The Difference Between Backtesting and Simulated Forex Trading

Another type of strategy affirmation is backtesting, and like simulated trading is an important verification process used by traders before deploying a new forex strategy in live trading.

Whereas simulated trading, is trading a non-live version of the current forex market, backtesting is the use of historical price data to test a strategy and see how it would have worked in past market conditions. The two however, do work hand-in-hand.

The MT4 and MT5 (Meta Trader) based platform used by many online brokers has their own strategy tester that can be used for backtesting with historical data. It has a 90% modeling accuracy and although useful is not as reliable as the 99% accuracy available through external backtesting software that interprets data, such as Birt’s Tick Data suite.

Many traders will use both testing methods. They will put a prospective forex strategy through a rigorous backtesting trial to see if it is profitable. They can then undertake further diagnostics by putting the strategy through it’s paces in a simulated market environment using live current market prices. The trader can then adjust and improve the performance of the strategy, all in a safe no risk environment.

A notable concern with backtesting is overfitting. Overfitting happens when a strategy is fine-tuned to perfection on historical data but fails to replicate those outcomes in real-world markets.

We have an in-depth written resource here at Axcess FX about backtesting as part of creating a profitable and reliable automated trading strategy.

How To Transition From Simulated Trading To Live Trading Effectively

We have identified four areas you should focus on to ensure a smooth transition from simulated to live trading. If you can adhere to them, you have given yourself every chance of making real money.

Gradually introduce real capital into the mix by starting with a smaller than normal trade size. It will allow you to open the door to live trading while maintaining an even more conservative risk management strategy than you are used to.
Continue to analyze and learn from a live trading experience instead of reducing focus on this important part of a robust trading system.
Be mindful of the psychological and emotional differences between simulated and live trading. It may not be evident at first, but if you start entering and exiting trades without adhering to the rules of your tested strategy and risk management process then take a step back.
Ensure all forex trading strategies tested in a simulated environment are adaptable, with room for adjustment and not overfitted before you start trading live.

Conclusion

We hope that this article has convinced you of the merits of simulated forex trading before moving into a live trading environment.

It is all too easy, especially for newcomers, in a desire to start making money quickly, not to build a reliable forex trading system. Simulated trading is your safeguard to jumping the gun. If you combine it with backtesting you will be well placed for a chance at success.

Related Resources

How to troubleshoot a forex robot that is performing badly

Written by Chris Gillie

Considerations When Buying Forex Trading Software

Purchasing the right forex trading software at the outset is crucial if trading software is part of a broader FX strategy that you want to pursue. Opting for the wrong software and your forex trading career could go from very good to very poor in a short time.

The concept of using forex software, which provides you with charts and graphs and sends signals, may seem desirable. However, to justify the implementation of software, your sole concern when undertaking research should be functionality alone.

Search online and find out as much as you can. Do your homework and make sure you understand what you need to know. Unless you know how all the features in forex trading software works, you will not be in an excellent position to analyze the software by backtesting and paper trading as part of a broader strategy.

Forums as soundboards

If you feel you may have identified the right forex software package, hold off instead of purchasing it immediately. Authoritative reviews and forum feedback on the software are essential reading. You need to invest in the software only when your exhaustive research has identified that it is the best option for any more comprehensive trading strategy.

We have a detailed guide that covers the merits of thoroughly using online reviews to identify the best software.

The best forums for foreign exchange where you can interact with the Forex Community, including for trading software include but are not limited to the following:

EarnForex

A forum with a large community ensuring quick answers to your questions

MT5 Forum

A valuable forum dedicated to software around the MetaTrader trading platform

Forex Abode Forum

A forum with a large community with a heavy emphasis on the subject of analysis

Babypips Forum

A forum focusing on the needs of beginners which is the overall aim of the Babypips site

Forex automated trading systems and software explained

No product becomes popular without possessing something attractive and beneficial for the targeted user. The industry of trading has become quite popular and there are number of reasons for this popularity. Some of the benefits include the fact the foreign exchange market is open day and night all over the world and is extremely liquid. Currently, it has been reported that every day 2$ billions changes hands.

Automated trading systems play an important role in this industry. Through the program you can trade currencies online on autopilot, without needing any human supervision. The aim of the program is to maximize your profits to its full potential. It achieves its purpose by identifying and capitalizing on signals when to initial or exit trades as per the parameters initially defined.

They are scripted and encoded in a way that the mathematical algorithms are able to produce money-spinning results. It is worthwhile to mention that functioning of these systems is dependent very much on the extent of how well the system has been executed and programmed.

Although the systems work on autopilot, your trading skill and the experience you have as a trader is also important as it increases your chances of finding and exploiting more trading opportunities. Trading programs can be aiding tools in the process of your earning money, but your trading skills remain your most important assets.

They can only help but not lead the way to success. Also, you have to understand that there are no immediate returns, systems can be beneficial in long term and you must understand how they function.

It is generally claimed that most programs can generate a regular income for $100 or so to say the least. But that is not always true. The back tests that they offer as a proof are not actually a proof. The reason being those tests are conducted in only favorable conditions without projecting the element of unpredictability of the market. Often it is assumed that the simulation profits of the software will actually repeat itself in real life. However, it is not history. Simulation track record never repeats itself.

It is a very difficult choice as in which autopilot system is suitable for you. There are numerous trading systems available. Not all of these trading systems are useful. Some of them are just worthless pieces of software. But is it not like going to the moon and back to find an affordable system which actually performs well. I would suggest that you choose systems, which has good price and all the functions are as per your business needs.

Avoiding Mistakes – Forex Tips for beginners

Depleting your capital account with your online broker is undesirable.

As an inexperienced trader, what are the ways that you can cut out mistakes and limit trading losses?

We highlight what essential controls need to be maintained to at least give yourself a chance to make profits as a forex trader.

Essential controls to avoid trading mistakes

1 Master one strategy at a time

If you are new to forex trading, trying to learn too many strategies could slow up your learning process and cause losses on your trading account.

As you become more experienced, it is reasonable to use different trading strategies, but at the beginning, master one strategy at a time.

2 Simplify your trading

Novice traders tend to overcomplicate trading creating technical indicators and trying different expert advisors. If you use chart software, your chart may obscure by all the technical indicators flashing up on the screen.

It is best to focus on the raw price action that presents itself on every chart. Learn what the price is telling you, and the simplicity of trading will become apparent to you.

3 Avoid trading in different markets

Novice traders tend to trade on multiple markets with little understanding of the market. Known as noise trading, traders enter trades without the proper technical or fundamental research to justify the trade. If you want to trade on different markets, it is essential first to trade them on a demo account.

4 Over leveraging positions

Inexperienced traders are often susceptible to using too much leverage in their trades. Online brokers offer levels of leverage that put the capital account of a new trader at risk. Leverage of more than 100:1 is not uncommon. As the amount of leverage magnifies the profit and loss on a trade, it needs monitoring.

5 Lack of research

Proper research of a currency pair or currency market is essential to trade successfully. In-depth analysis should shed light on entry and exit timings and market trends. There may be slight differences between currency pairs and how they work. Detailed research is essential to put a proper strategy in place.

The Importance of Demo Trading in Forex

A vital forex tip is to use a demo account when you first start trading online.

Undertake demo trading for the first three months before you start trading with real money. All good online brokers will offer a demo account.

It is a crucial tip to cut your teeth on the forex trading demo account. Familiarize yourself with the software and the platform. It is essential only to study one or two of the major currency pairs; the major currency pairs are the best to follow as they are the most liquid.

Demo trading allows you to develop a feel for the market

A demo account allows you to get a feel for your chosen currency pairs’ movements. Demo trading also allows you to hone your wider forex strategy through backtesting and paper trading until you are ready to progress to real money. F

or example, Cable or the GBP/USD can be very busy in the morning European session but is quieter once the American market gets into full swing. Learn and get a feel for these and other such trends before you start trading with real money.

The best way to trade forex is to confirm a trend. A trend is confirmed by looking at a chart, a process known as technical analysis. Many traders make it their business to predict where the market is going before it happens and trade accordingly. It is a crucial and essential for forex trading.

Bonus tip

Depending on what time frame you want to take a strategic position will make a big difference for your overall strategies. A bonus tip is if you are taking a position over the short term, perhaps one week to one month, then you do not want to be looking at a long term chart. When you are starting, have a plan, and keep everything simple.

Historical charts, patterns and signals

Professional forex traders use charts to check the markets daily, and view historical data to make informed decisions as part of their overall trading strategy.

Basing decisions on historical forex charts, records and patterns in order to make sound and rational decisions is common sense. For example, cable has sat below 2.40 since 1980 and has never been back to the same spot ever since. Such data, must be valuable to a position trader.

Charts can give you a long term report of the position and strength of certain pairs. Inevitably there will be pairs that remain strong throughout.

Charts are crucial for making rational decisions based on signals and patterns

As well as trading software, credible historical forex charts are made available by economic institutions that have been involved in the long term analysis of fundamental and technical trends.

It is important that you derive your historical charts from a reputable institution as the value of the chart is diminished based on the lack of accuracy.