Demo and real accounts. Why a demo account? What’s the difference?

For every experienced and successful forex trader, there is a plethora of new and/or inexperienced would-be traders out there. We strongly recommend, especially for the novice trader, that you start by using a demo account.

Why?

Simply because it eases you into the world of real forex trading without financial risk to yourself, because you are, in effect, using an entirely virtual money account.

With a demo account it does not matter to you nor anyone else if you happen to lose a fortune on your first trade. You can always open another demo account or ask your broker to top up the accounnt.

Moreover, it gives you time (over how ever long-a-period you feel you need) time to play with all the brokers facilities and become orientated as to how online forex trading really works and can, in fact, work for you – to your advantage.

A demo also gives you time to realise what type of a trader you are and allows you to develop your own trading strategy. In a nutshell, it gives you the time to develop your wings.

Finally, whether or not one is seasoned trader, when using a new Forex site, for the first time, it is our strong recommendation that one should always become acquainted with how each and every Forex site works, by using the site’s demo trading platform – in order to understand exactly how the site’s software works.

What’s the difference?

Simply put, apart from (as mentioned above) you are using virtual money the difference is virtually unnoticeable – all the features are exactly the same, as in the real account.

The only difference being is that your PC is your dealer, which will always open or close your positions automatically – in accordance with the current market rates. In real trading, it is done manually, by one of our traders.

  1. In demo trading, with the benefit of no risk, should you use up your initial credit, you can easily top this up. Simply go to our user zone with the help of your account and password (Section “Demo Account”).
  2. There are almost no delays, between your inquiry and offer of the exchange to open or close a position. However, in real trading there could be delays of 30-40 seconds.
  3. Rubbish quotes (these are single bounces for more than 30 or more pips from current quotes) are accepted by the PC as real ones on a demo account – participating in the quote system. In a live account they are ignored.
  4. With a real account, it could happen that there is market movement, whilst you are in the middle of closing your position, in line with a certain rate. Should this be the case, your order might not be fulfilled. Hence you will be in receipt of an order to close the position at another (current) market rate.
  5. We believe that there are or can differences, in psychological make up, when a player is using virtual money and real money. It is important not to get carried away, when using a demo account, and not to forget that you are there to study and make good on your real objective – of preparing for the day, when you decide you want to try and spread your wings and fly and become a fully-fledged trader; with the objective of using real (your) money, with the sole objective of making more money, via way of return.
  6. You should be aware of the fact that the market is always moving and sometimes very quickly. An exchange rate are by nature, very changeable and subject to world events and breaking news and it is possible for rates to leap either up or down by several pips on breaking news stories. The speed at which you enter your order into the system may influence the rate according to which you can enter the market. This is one of the many factors that influence the results of your trading.

We strongly advice that you learn, develop and trade the market using a planned forex trading strategy- one that works the best for you.

Remember, there is no one plan which fits all. We are all individuals, and what might work rather well for one person, does not mean that it will work well with you. You should also consider what are the up’s and downs of the loss you can stand.

In essence we cannot stress enough, the importance of having a plan and following that plan. This does, however, call for a rather ruthless approach and it is all too easy, for the human emotion to kick in.

However, the other thing is that with real trading, you are using real money and it could be those very human emotions, which could also stop you from making a good kill. Therefore you need to be able to temper your emotions with the cold realisation of the hard facts of what all the indicators/signals are telling you.

Our demo version will give you all the tools and the time necessary, preparing you for the day when you will be ready to take your first flight, into the real world of Forex.

We wish you good luck. As usual, you should always be aware that there is the potential for loss as well as very attractive gain.

Forex trading training in kenya

For convenience sake, let’s say that you’re studying the EURO and your trading strategies are telling you that the prices will rise or rally, during a given time frame. You buy the EUR/USD pair or, technically speaking; you will simultaneously buy euros as the base currency and sell dollars.

So, you open up your trading platform, which is usually provided for you free by your online forex broker, and you then see that that the EUR/USD pair’s are trading at EUR/USD: 1.3242/45, for example. It is important to remember that the quote (1.3242) on the left, is the bit or “sell” price, which you obtain, when in USD’s when you sell EUR’s. the quote, on he right (1.3245), is used to obtain the ask or the “buy” price, which is what you have to pay in USD if you buy EUR.

Based on the belief that the market price for the EUR/USD pair will climb, you then enter a “buy position” in the market. Simply put, let’s assume that you’ve bought one lot at 1.3245 and as long as you sell the pair at a higher price; then you’ve made some money.

This seemingly complicated process is handled and calculated for you, via your broker’s software and trading platform. The charts and quotes board software should be in agreement with all currency sides.

Let’s have a look at this type of scenario, involving the USD/JPY currency pair. Remember, selling (“going short”) the currency pair implies selling the first base currency and then buying the second, quote currency. If you believe that the base currency (USD) will go down, relative to the quote (JPY) currency or, equivalently , you believe that the quote (JPY) currency will go up, relative to the (USD) base currency, then you sell or “go short”.

NOTE: while the Profit Calculations, on the Short-sell trade scenario below, may seem somewhat complicated if you’ve never been in the FOREX market before, trust us when we say, “this process is nearly seamless through your broker trade station (software). We’re just showing you this thought-process below so you can SEE how a PROFIT occurs even when. also view Forex Education.

Selling a Currency Pair. The current bid/ask price for USD/JPY is 105.26/105.30, meaning you can buy $1 US for 105.30 Japanese YEN or sell $1 US for 105.26 YEN. Suppose you decide that the US Dollar (USD) is overvalued against the YEN (JPY). To execute this strategy, you would sell Dollars (simultaneously buying YEN), and then wait for the exchange rate to rise.

So you make the trade: selling US $100,000 and purchasing 10,526,000 YEN. (Remember, at 1% margin, your initial margin deposit would be $1,000.). as you expected, USD/JPY falls to 104.26/104.30, meaning you can now buy $1 US for $104.30 Japanese YEN or sell $1 US for 104.26.

Since you’re short dollars (and are long YEN), you must now buy dollars and sell back the YEN to realize any profit. You buy US $100,000 at the current USD/JPY rate of 104.30, and receive 10,430,000 YEN. Since you originally bought(paid for) 10,526,000 YEN, your profit is 96,000 YEN.

To calculate your P&L in terms of US dollars, simply divide 96,000 by the current USD/JPY rate of 104.30. Total profit = US $920.42.

In a nutshell forex trading is really just that – foreign exchange currency trading, which today we know as Forex.

The forex market found popularity in the mid nineties and has gained in sophistication and momentum since then. It has become something of an immeasurable entity, with millions going online to trade on the forex market on an almost daily basis.

As a result, the forex market now trades billions of dollars, pounds, or whatever currency you care to name twenty-four hours a day, and the only time it’s closed is at the weekend.

However, worldwide time differences, mean that the shop, which is forex, is hardly ever closed. Therefore, the forex market is not a fixed, physical, entity.

And here is the difference between online currency trading and a physical trading market place like say, the New York Stock Exchange, The City of London, or the Tokyo Stock Exchange, where the traders are limited to the trading hours of these places.

In contrast, the world of the internet forex trading has no such limitations. The internet market permits one to trade from anywhere there happens to be an Internet connection; be it from home, an Internet cafe, or even from one’s work place, in the office.

There are numerous online currency trading platforms, from which to choose from, and it could be said that each online currency trader, has his/her favourite. For those new to forex trading, however, the choice should be made with care, and it is always advisable to try the various “demo” versions as fully as possible.

It must be said, thought that as well as having the possibility to make and take profit(s) from on-line currency trading, it is also possible to incur losses as well, so be careful and never spend more than you can easily afford to lose.

In Summary

Internet forex trading is purchasing one currency, for another, with the view of making a profit against the weakness of the currency one’s purchasing.

However, because the market can change within the wink of an eye – one has to have an agile mind, confidence, and to possess awareness of world and up to the minute financial affairs.

The online forex market can and will have sharp reactions to terrorist acts, for example and/or acts of God, for example hurricanes, which could upset crude oil supply and delivery.

And, although the markets now readily adjust to such affairs these days; the sudden drops and spikes, as a result, very often could and do, take one by surprise, nevertheless – even the most experienced of traders.

An average of $1.9 trillion is traded on Forex market daily, thus making it the world’s biggest market, and although anyone can now join in on online currency trading, the biggest players – day in day out, are the banks, which range from commercial to investment institutions as well as, registered, futures commission merchants.

How to start earning from forex trading in kenya

Forex trading in Kenya has in the last ten years taken off as a result of penetration pf internet. Unlike the years gone by, almost every Kenyan has access to the internet.

Additionally, the options and trading applications and platforms, now on offer from the abundance of web sites promoting their services – quite literally spoils one for choice.

But what is Forex trading?

Forex trading in its simplest form is trading one currency against another currency. Traders profit from the fluctuations in the value of the different currencies.

The internet forex trading of today can be traced back to the time when man first started trading one or several items in exchange for others. This was and is known as bartering and that’s how things continued until the introduction of money.

The origins of the word money stem from the Latin word, “moneta,” which in turn comes from the Greek temple of “Hera the Moneta.” And this is where money first came from, in the early days of Rome.

Money, in itself, must be a scarce good and many items have been used as money, from naturally scarce metals and minerals, to conch shells and cigarettes, to artificial banknotes; i.e. paper money.

Money is, in its crudest form, a token – an abstraction and perhaps the most popular of that is the form of paper money, in the design of banknotes, which is the most common sign of physical money. Gold and silver retain, however, many of the essential properties of money. An example of cigarettes, being used as “money,” may be found in many prisons, where the usual forms of coins and notes are prohibited, from being held by their inmates.

Bartering, however, has several problems, most notably timing constraints. If you wish to trade fruit for wheat, you can only do this when the fruit and wheat are both available at the same time and place. That may be a very brief time, or it may be never. With an intermediate commodity (whether it be shells, rum, gold, etc.) you can sell your fruit when it is ripe and take the intermediate commodity. You can then use the intermediate commodity to buy wheat when the wheat harvest comes in. Thus the use of money makes all commodities become more liquid.

Forex trading is where (as already mentioned), one currency is bought and sold against the fluctuation rate of that of another, on the international currency exchange market, with the idea of selling one currency against the other for profit. Money has always been traded, through the centuries. However, this was, until the advent of the Internet; usually the exclusive domain of the rich and that of their brokers. Before the Internet, anyone wishing to make a currency exchange, went through an agent, known as a broker, who bought and sold, at what he thought were the best rates of exchange. For this, they extracted a fee, unusually via of a percentage of the total sum of the deal.

The forex trading market I always in a continuous state of flux due to the continuous rates of variability on the foreign markets and this as a direct result of supply and demand and, amongst other things, domestic stocks, and international trade patterns, tendencies, and movements.

Today, with the richness and abundance of the Internet, anyone can become their own forex trader, from the comfort of their own home, start trading and stand a good possibility of making money, after a little trail and experience.

Forex trading, on the Internet really started to take off, in the mid-nineties and at that time there were only a handful of web sites, with (in comparison to today’s usage) a handful of people. These people started trading from home, during the day, and rapidly became known as Day Traders and all of this really got started in the US. For many forex trading even became a way of life, with many giving up their regular jobs, and making money for themselves, in real time and at home.

With the advent of broadband, with good and secure high speed connections becoming a forex trader is not difficult and simply requires a degree of understanding of how the markets work, spotting what the tendencies are and making a trade on what you think is going on in the forex market. Forex trading is no longer the exclusive domain of the rich and their brokers – rather it there to be used by one and all, with a degree of intellect, and an aptitude for spotting market trends, and making a trade on what he or she thinks will happen to that currency next.

Breakout Identified in EURUSD

Signal ID: 42290
Time Issued: Monday, 08 February 2016 16:12:15 GMT
Status: open
Entry: 1.11577 – 1.12034
Limit: 1.12685
Stop Loss: 1.10856

The Breakout Opportunities system has just bought EURUSD at 1.11817.

The system recommends entering this trade at any price between 1.11577 and 1.12034. The signal was issued because the EURUSD has broken its 24-hour high while our Speculative Sentiment Index was at -1.6938, suggesting that the EURUSD may have further to rise.

A stop loss has been set at the 24-hour low of 1.10856 and a profit target has been set at the 1 Day ATR level at 1.12685. The system will move the stop to the next 24-hour low every time that 24-hour low is higher than the previous 24-hour low.

Breakout Opportunities is a breakout strategy that aims to catch the significant moves that typically happen when currencies break through technical support or resistance. The SSI Breakout strategy tends to work well in volatile market conditions.

Hey, I am a Beginner. How Do I Invest in Online Forex Trading in Kenya?

Have you ever come across a person who asks this question? Maybe you haven’t because you are also new to online forex trading. You are probably also looking for a person to guide you.

But if you were in my position, this type of questions has everything skewed up. I normally do not answer such questions, but if I could, I would have only one answer for such people: “What…? You mean you are a newbie? Well, go and invest your money elsewhere. You will never become a profitable forex trader!”

Asking questions like this one is utter nonsense.

You may call me rude, pessimistic or arrogant, but such a trader will lose. Yes, you will lose, if you are the kind of person who asks such questions.

It is obvious that such a person has not bothered him/herself to even push a single keyboard key to find out about online forex trading.

Such a person does not want to tire their brain doing research for themselves and gathering information about online forex trading.

Such a person does not consider other people’s time to be valuable. How can s/he expects other people to be the ones to answer these basic questions about forex trading?

And this is the sole reason why they will lose. A person with such an attitude and ‘exceptional’ research knowledge may never become a profitable forex trader.

An investor is a die-hard researcher at heart. An investor keeps an open mind and has the ability to find all the answers by him/herself.

Before you ask such dumb questions, remember that Google is your best friend. Type your question on the search engines, and 10/10 times, the answer will be right there in the search engine results.