Demo Account Setup

The 5th lesson is finally here! I will show you how to get started trading the Forex100% risk free. After this lesson you will start to experiment with Forex trading.You will not be a master trader the first day. It is important that you persist in yourefforts. You have to keep trying until you succeed. There are a few things that Iwant to explain that you should know before attempting to set up your demoaccount.I want to explain a little more about the currency pairs. Currencies are alwaystraded in pairs in the Forex. The pairs have a unique notation that expresses whatcurrencies are being traded. The symbol for a currency pair will always be in theform ABC/DEF. ABC/DEF is not a real currency pair, it is an example of a symbolfor currency pairs. In this example ABC is the symbol for one countries currencyand DEF is the symbol for another countries currency.Here are some of the common symbols used in the Forex:USD - The US DollarEUR - The currency of the European Union "EURO"GBP - The British PoundJPN – The Japanese YenCHF - The Swiss FrancAUD – The Australian DollarCAD - The Canadian DollarThere are symbols for other currencies as well, but these are the most commonlytraded ones. A currency can never be traded by itself. So you can not ever trade aEUR by itself. You always need to compare one currency with another currency tomake a trade possible. Some of the common pairs are the EUR/USD, GBP/USD,EUR/AUD, USD/CAD, etc...The currency pair looks like a fraction. The numerator (top of the fraction) is calledthe base currency. The denominator (bottom of the fraction) is called the countercurrency. When you place an order to buy the EUR/USD, you are actually buyingthe EUR and selling the USD. If you were to sell the pair, you would be selling theEUR and buying the USD. So if you buy or sell a currency PAIR, you arebuying/selling the base currency. You are always doing the opposite of what youdid with to base currency with the counter currency.If this seems confusing then you're in luck. You can always get by with justthinking of the entire pair as one item. Then you are just buying or selling that oneitem. Thinking like this will still enable you to place trades. You only need to beaware of the base/counter concept for fundamental analysis issues. S o why is it important to know about the base/counter currency now?The base/counter currency concept illustrates what is actually taking place in a Forextransaction. I mentioned before that short-selling was restricted in the stockmarket. Short-selling is where you sell a stock/currency/option/commodity firstand then try to buy it back at a lower price later. But in the Forex, you are alwaysbuying one currency (base) and selling another (counter). If you sell the pair youare simply flipping which one you buy and which one you sell. The transaction isessentially the same.This allows you to short-sell with no restrictions!You want to be able to short-sell with no restrictions so you can make moneywhen the market drops as well as when it rises. The problem with traditional stockmarket trading is that the market has to go up for you to make money. With Forextrading you can make money in all directions.Another important concept for Forex trading is the leverage. Leverage is whenyou can use a little money to control a lot of money. The Forex market is probablythe highest leverage market in the world. There are different types of leverageavailable in Forex trading. The highest leverage possible is 200:1. This meansthat if you put up $1 margin, the trading provider will allow you to trade with $200.So if the price of the currency pair goes up 1%, you make 200*1%=200%!The margin for Forex trading is a good faith promise to the trading provider. Othermoney in your trading account also insures your transaction. You only need toknow that the margin is the amount of money you need to place a trade.Another important piece of lingo is the term "pips". Since we have the EUR/USD,EUR/AUD, etc..., we need a way to talk about the number or price. When you seea Forex currency pair price quote, the last digit of the price is commonly referredto as a pip. So if you see a price quote of 1.6118 and then a price quote oneminute later of 1.6119, the price rose 1 pip. Similarly, if we see a price quote of187.50 and then another one 5 minutes later of 187.58, the price rose 8 pips. Thepip is always the last decimal place of the currency price quote.These lessons literally could go on for several years and you still would not knoweverything. At this point, you are ready to start demo trading. Once you begin toplace demo trades, you will learn a lot about how Forex transactions are placed.This is an important step for you to be able to learn how to become a trader.Important Note: Just fooling around in a demo account can be a great learningexperience. You will not learn how to become a trader this way. You need to havea trading strategy, like the ones at trend strategy store.Here's how to get started with your own demo account.Go to http://fxcm.com/mini-demo-registration.htmlThere you can sign up for a free mini-demo account. A mini account is just like areal demo account, except the trade sizes are smaller. In a real account the smallest trade size is $100,000; in a mini account the smallest trade size is$10,000 (this can be done with a $50 margin, the power of leverage!).There are several other places online to sign up for a free demo account. I usefxcm, because they have the best overall reputation online. Fxcm has built itself tothe premier Forex trading platform. I don't get paid anything to endorse them, butthey are currently the best.Once you sign up for your mini-demo account, you will need to try out one of thetrial charting packages. Any of these will do because they all have the SMA. Youcan then set up your demo account and use the SMA crossover method fromlesson #3. This is a good way to get used to how orders are placed. Once youhave a real trading system, you will already know how to place orders properly.Everyone makes mistakes placing orders. You need to experiment in a demoaccount to make your mistakes without losing money.At this point you have to make a decision about how fast you would like to learnhow to become a trader. The truth is that the longer you wait to get in on thismarket, the more potential money you are missing out on. You need to decidewhat time frame is right for you to begin trading.You need to decide if:1. You want to place real trades within the next 3 months (or sooner, dependingon your desire)2. You want to build your knowledge for several months before placing realtrades.The choice is entirely yours. No-one else can make that decision for you. Youneed to make a plan and stick to it. It is important not to put off your success.Success requires action.If you want to place real trades within the next 3 months, you should check out4xtrend. There are some great resources at extremely affordable prices that canget you trading in a very short amount of time.At this point, I would like to congratulate you on completing the Insider Secrets ofOnline Currency Trading course! You have already showed a level ofperseverance that most people lack.I would also like your input on any aspect of Insider Secrets of Online CurrencyTrading. I am interested in any parts you found helpful, insightful, confusing,etc... Any feedback about this course would be extremely helpful for all of thereaders. This is largely a collective effort; by contributing you benefit yourself andothers. Simply post your questions to commentsHere is a recap of what you should be doing right now to pursue your Forex trading goals:1. Setup a free demo account by going to:http://fxcm.com/mini-demo-registration.html2. Decide your time frame on when you want to enter the market. If you want toget there as quick as your heart's desire, go to www.4xtrend.com. If you want totake your time, sign up for the Forex system course.3. Be persistent and never give up!