The forex market is diverse in many different ways, particularly in terms of the types of traders active within the space.
From those with a short-term outlook (such as scalpers and day traders) to position traders (who can maintain open positions for years in the pursuit of scalable, long-term profits), each type of investor has a different outlook and will deploy alternative strategies to achieve their aims.
To help with this, there are various types and levels of forex trading in the marketplace, each of which has its own unique benefits. Here’s a brief breakdown of your options and a review of how automated trading can boost your activity levels.
The Forex Demo Account
Let’s start with the forex demo account, which provides access to a simulated, real-time marketplace where you can trade without putting your hard-earned capital at risk.
As a result of this, a forex demo account enables each trader to test their trading plan for viability and profitability, while also allowing them to evaluate other performance metrics over a period of between three and six months.
Another key advantage of a forex demo account is that it allows you to evaluate the brokerage firm behind it, without requiring you to provide huge swathes of personal and potentially sensitive data.
Of course, there are limits in terms of how much virtual capital is provided, but you should still have ample opportunity to hone your preferred trading strategies and provide a practical outlet for your theoretical knowledge.
The Live Forex Trading Account
You’ll only be able to use your demo account for a finite period of time, before you’ll be required to switch to a live trading alternative. This may be after six months, although some brokers may restrict access even further.
In the modern age, you can access and operate a live forex trading account with as little as £50, while there may be an upper limit imposed by the brokerage site in question.
Once this type of account is opened and funded with real money, it’s possible to apply the lessons learned through the demo account and by initiating (and liquidating) corporeal trades in real-time.
In some cases, this type of account can enable you to trade currency pairs in full lots, although mini and micro lots are also available depending on your broker and investment level.
What About Automated Trading?
Once you’ve graduated to a live trading account, you can also utilise your chosen platform to benefit from algorithmic trading and automated risk management tools.
These features help to reduce the risk of human error, paving a way for increased and more consistent profits over time.
The popular MetaTrader 4 platform is one that allows for automated trading, as it utilises so-called “expert advisors” (EAs) to speculate on markets in a profitable and lucrative manner.
This platform, which has been specifically designed to trade currencies on the forex market, can also be customised in terms of its interface and how it delivers information, while it’s ideal for established traders with large and relatively diverse portfolios.
This is definitely the best platform through which to access your forex trading account, especially as it can sustain you throughout every stage of your investment journey.