For most forex traders, before they play and use forex signals in foreign exchange trading. The first thing to do is start the demo or trial because it will help them to do trading later. By running a trial, they can do trading without the risk of losing any money. The trader also can learn to design trade strategies, getting know the broker, and also familiar with the marketplace.
Therefore, it is necessary to know more about the concept of paper trading that common in the forex trading field. Because, when the traders can be profitable in paper trading, it doesn’t mean that the traders can be profitable too in forex trading. It might be, but not the guarantee.
What is Paper Trading?
First, let’s talk about what is paper trading? It is known as a trading simulation that assists the trader to practice buying and selling without risking real money. While studying forex instruments, they also can run the trading by using the simulator and analyze their trading portfolio. So, it can facilitate decisions when trading.
Paper Trading Benefit
Doing paper trading would improve the strategy that will apply in foreign exchange trading. Paper trading also helps the new trader to getting know the forex trading instruments, such as the broker, the forex signals, and train the trader to record the portfolio based on market movement. By doing a lot of paper trading, it will indirectly make it easier for traders to formulate strategies and analyze forex trading
How to Choose the Best Simulator?
It is essential to choose the right paper trading to be a partner to train the trading strategy and analyze the market. Here the following steps to select the best paper trading.
- Recognize the features and tools that used in the trading simulator. Better for the new trader to choose the simulator that offers information about currency changing in real-time and other features that required when trading.
- Recognize the broker. Generally, trading simulators are provided by brokers online. Then, the trader must recognize the simulator is provided by a trusted broker or not. Because each simulator has different features and instruments. Find out the broker’s regulation, what features and instruments that they offer? Are they cooperative and have good customer service? That will determine the smoothness of trading training later.
Paper Trading and The Real Money Trading
Between paper trading and foreign exchange trading, of course, there is a big difference. Trader considers that paper trading relatively easy to do. Then, this trading also safe and good for making and applying new strategies. Even this trading not able to gain profit, but when it runs seriously by doing technical analysis or fundamental analysis, it will help to gain the profit in real money trading.
Those are information about paper trading, the benefit of paper trading, and how to choose the best simulator for paper trading, which recognizes the features and instruments of trading like forex signals, brokers, and real-time currencies information are required to make a perfect decision in trading.