Importance of Simulated Forex Trading

Simulated forex trading is a must for anyone who is interested in making a career out of the forex market. Here is what simulated forex trading is and how it can help you.

For those who don't know, simulated forex trading entails using a practice trading account which can be acquired from most online broker sites for free to trade in the forex market but without investing or risking any actual money. Instead traders invest with virtual or fake currency with the aim being enabling the trader to learn the basics of the forex market up through learning how to effectively trade and turn a profit, all at their own pace and for as long as they like. You read the same market graphs and charts, and everything is the same, only again you invest and track your results with virtual currency.

This is important because it encourages you to make the learning mistakes which you would otherwise be unwilling to make had it been your own money. You can trade this way at your own pace for as long as you like until you are ready to make the transition into the real thing with real money. That being said, it's typically recommended that you spend at least six months trading in the safe confines of a simulated forex trading account along with a number of profitable trades under your belt before transitioning into the real thing.

Obviously this requires a good bit of your time and many people simply do not have that time to devote to learning a new trade, even for one as profitable as the forex market. For the casual trader it is recommended that you look into auto trading forex software which is essentially a program which you run on your own computer which automatically places and ends trades on your behalf by reacting to changes in the market. Every step of the process is automated so you don't have to know a thing about the forex market to take advantage of it nor have the time to tend to it.

The catch is that this software will not make you rich. The programs which promise this typically end up trading much too aggressively, so the programs which focus on lower risk/reward trades are the ones which deliver as they trade more effectively and within their means and never take any risks to give them the impressive near perfect winning rates.