A Forex demo account is mostly used by a trader to test a Forex strategy and to get to know a broker’s software. This is one of the fundamental stages of becoming a good Forex trader as knowing the software is vital to success as a trader. A Forex demo account acts like a virtual Forex trading account as the trader will utilise the same functionality they would if they were trading a live account.

The trader will be allocated an virtual amount of trading capital and the trader will use this facility to be consistent with their trading plan.

Once this has been mastered, it is a good idea for the trader to then move on to trading a live account, as some see the Forex demo as unrealistic and not true to trading a live account.