Opening a Demo Trading Account

Spread Betting Demo Trading Accounts: There are now a wealth of trading companies and bookmakers out there that offer demo trading accounts. For the novice these are a fantastic idea as these will not only teach you the basics of trading practices and terminology but also open your eyes and mind to the skills required for the nerve jangling world of trading investments and spread betting. As much as we could write a book about the thrills and spills of minute by minute trading, demo accounts are a good way to learn that different companies and platforms will work, not surprisingly, differently from each other. Spread betting can carry a lot of risk so knowing your own style and strengths and weaknesses is crucial but not every trading company will fit your ways. Shop around.

Spread trading provides you access to trade a wide range of global financial markets not normally available to retail investors:

  • Commodities
  • Softs (coffee, cocoa, orange juice, sugar)
  • Agriculture
  • Energy
  • Metals
  • Foreign Exchange
  • Treasuries
  • Sectors
  • Global Indices
  • Global Equities

Share spread bets are some of the most common type of spreadbets. However, there are many other types of spreadbets that can be traded and the list keeps growing. Most providers nowadays will list all the constituents making up the FTSE 100 and FTSE 250. However the list is constantly being expanded due to demand for other share spread bets and a number of providers now will also quote AIM and Small Cap Shares that may not be offered by existing providers

Apart from UK stocks, many spread betting providers also quote share spread bets on international shares including USA, European, Australian and Asian shares. This
means you can trade share spreadbets on Google, Amazon, Wal-Mart, Honda, Toyota, BMW, Porsche and other big brands that are not available in the UK market.

Many providers will also offer index betting. An index is basically a collection of shares and the corresponding composite value of its components. In the UK we have the FTSE 100, FTSE 250 and FTSE 350. Major indices in the international financial markets include the Dow Jones Industrial Average (USA), Nasdaq (USA), FTSE 100 (UK) CAC 40 (France), DAX (Germany), Nikkei 225 ( Japan), Hang Seng (Hong Kong ).

Try spread betting with a demo account

The second thing to think about when considering demo accounts is that most systems require rigid and repetitive tendencies so where better to try these out than with a demo account at zero risk to your own personal finances. You may be surprised how robotic and repetitive some systems need to be to turn a profit so live number crunching without the risk is definitely the way to go here.

Try the platform without risk before you spread bet

Many successful systems and traders possess dedicated discipline to a high degree so this should be copied to see if the chosen system stands up to thorough testing. One slip and it could be curtains so demo trading can help show your own levels of discipline. When real money is involved the figures on show can take on a whole new perspective. Would you want to risk that before trying risk free?

Demo trading can be a false economy because without that real risk of losing your own money you just don’t fully know if you or your system is watertight and bulletproof. You will tend to miss many smaller losses when it doesn’t matter what the figures are fluctuating at. Professional traders will always recommend there is nothing like real life to teach you.

Having said that there is a lot for the novice to take from seeing how intricate investments can react to real live markets and also it’s important you fully understand the platform of your choice.


Using A Demo Spread Betting Account To Test Your Trading Strategy

So you’ve had an idea for a new trading strategy and have back tested it using historical charting. Now you need to forward test your idea to see if it actually works in real time. The best way to do this is to use a demo spread betting account which most brokers offer for free.

Inside a demo account you will find a fully functional working version of the spread betting platform loaded with a virtual balance. With this balance you can place demo trades and see profit or loss from these virtual trades in the exact same way you would with a real deposit. Using a demo account allows you to forward test your trades and tell for sure whether your method is going to make you money or make you lose.

You will find real time prices to trade and be able to place stop losses, limits and other types of orders just as you would with a full account. Please be sure to test your strategy fully over a decent period of time. Testing it for just one day will not be enough. Market conditions can vary from week to week and become more or less volatile with news and economic decisions by governments. What works one day may well not work the next.

If you have researched your strategy properly you will understand that when spread betting you will need to take losses to eventually gain profits. The key is to have system that can make more on winning trades than it will lose on losing trades. Sounds easy? Well it isn’t. You should use a demo spread betting account for a sufficient amount of time that has enabled you to see how the strategy works during fast moving markets and slow ones.

Once you are convinced your strategy is working how it should be, you can then move to opening a full account. Try to move slowly. There is no reason to hurry, the markets are not going anywhere but your deposit might if you do not start off by trading small and getting used to it slowly and in a controlled emotionless way.

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