Binary options trading demo account
The modern world offers many online learning options - courses, video lessons, online lectures, webinars and so on. Trading platforms are also equipped with whole training sections. But the most effective training method when it comes to trading is the use of a demo account.
A demo account is an exact replica of a real account, the only difference being that by trading on a demo account you are not using any real money. For training purposes, the system deposits virtual, fictitious money into the demo account, and you can simulate real trading by using it. Demo trading allows you to get hands-on experience with all of the platform's features, and allows you to try real-time trading using real quotes, trying out different trading tools and analysis.
How to use a demo account to trade binary options? What to learn, what options to test and what to look out for?
The topic of our review is a demo account for binary options trading in Malaysia.
To begin with, let's understand what binary options are.
Binary options are one of the most popular financial instruments among modern traders. By trading options you have an opportunity to earn up to 80% profit in a relatively short period of time.
A binary option is a digital contract that makes a forecast of the asset's price direction at the selected time interval. The idea is to correctly predict one of two possible market developments: whether the resource will rise or fall. They are called binary because they have only two results - winning or losing, i.e. 1 and 0 - as in binary notation.
The underlying asset can be anything - stocks, currencies, cryptocurrencies, indices, commodities and so on.
That is, your task is as follows: to choose an underlying asset, choose the direction of the price of this asset with the help of buttons: "Above" or "Below" (Call and Put) and open a deal.
The potential profit in the trade is known in advance, before you buy the binary option. And since binary options can be traded on almost any financial product and in any direction (Call or Put), trading binary options can be easy and profitable, generating high returns, which the trader receives immediately.
In addition to good earnings, binary options offer traders the following advantages:
- the ability to choose the duration of the trade (expiry time) according to different strategies;
- you execute all the operations on the trading platform yourself, at a convenient time and place, without having to use the services of a broker - it is convenient and with lower commissions;
- possibility to open several trades at once and choose different underlying assets;
- small initial investment amount - trading binary options does not require big investments, you can start with a few dollars.
Intelligent traders always keep an eye on the market trends and use analysis to predict the price movement of the chosen asset. Once they understand which way the market is moving, they can earn a steady income, without changing their chosen strategy. But if it does not work for a short period of time, it can be changed quickly to minimise losses.
Choosing a binary options trading platform
An online trading platform is a special trading software with which you can access all transactions in the online investment market.
It is important that the brokerage company that provides you with this platform is licensed and reliable and has positive feedback from trading experts. In addition, important points when choosing a good platform are:
- simple and easy registration;
- a demo account and tutorial section;
- convenient options for deposit and withdrawal;
- acceptable commissions for the services rendered;
- presence of all necessary instruments for the market analysis and trade;
- chat with 24/7 online support.
All you need to do is to click the "Registration" button on the broker's official website, fill in the simple registration form and confirm your registration with an e-mail (you will automatically receive instructions how to do this) or with your mobile phone (you will receive an activation code via text message).
The methods of deposit and withdrawal should be convenient for you, so choose a platform that offers you the use of payment systems you are familiar with. Click on the 'deposit' option on the platform and see what deposit options the platform offers.
Probably one of the best features of a good trading platform is the availability of a demo account. If you are just starting out in trading, then being able to open a demo account is probably the number one consideration when choosing a platform. With the help of a demo account you will be able to test all the functions you need, learn in practice how to use certain tools and develop your own trading strategy. Moreover, you will not be risking any real money. Using a demo account is free and unlimited in time, and the amount of fictitious money can be reactivated, if desired.
What and how to test using a demo account? Let's see below.
Binary options market analysis: types and tools
As mentioned above, traders use market analysis to correctly predict the direction of asset prices.
There are two main types of analysis: fundamental and technical.
Fundamental analysis - collection and analysis of information affecting the price of an asset. Macroeconomic indicators of the states influencing the market condition.
The purpose of the fundamental analysis is to help the trader to be prepared for unexpected price changes, by understanding the reason why it happens. And the reason is, as a rule, external.
So what events are taken into consideration during the fundamental analysis?
- Economic, geopolitical and social phenomena;
- The economic outlook and general market sentiment for a particular country;
- Natural disasters (extreme weather events, earthquakes and hurricanes which cause serious damage);
- Wars and periods of conflict between countries;
- Political events (presidential elections, referendums, forums);
- The publication of important statistics (economic indicators) for a sector or country.
Most fundamental analyses are used for long-term trading. Tools of the fundamental analysis on the trading platform are an economic calendar and newsfeed.
Yes, advanced trading platforms for binary options trading are equipped with an informative news section, so you will always be aware of all the current economic and political news, being able to analyse what is happening and make correct predictions when opening a trade.
Economic Calendar: this is the ultimate tool for fundamental analysis. See what news about the country you are interested in has already been released, what is coming soon and what is due tomorrow. It is often the case that in the run-up to major events, assets are already forecasting values into quotes.
And short-term trading is less sensitive to global market changes, so technical analysis methods based on mathematical correlation of different indicators are used.
Technical analysis is a complex of tools for forecasting probable price changes based on regularities of price changes in the past under similar circumstances.
You can use ready-made solutions, i.e. technical analysis indicators, to simplify the application of this method of analysis. With these tools you do not need to calculate complex formulas on your own, all you need is to choose the indicator you need on the trading platform toolbar and activate it. These indicators are superimposed on top of the chart of quotations, which gives you a clear picture for your analysis.
A good trader is a good analyst, so it is important to learn how to analyse fundamentals as well as using the right indicators.
Use a demo account to test how certain indicators work. Also, try to predict the price of an asset based on market news.
Depending on whether your test operations are successful or not, you will be able to draw your own conclusions, and either hone these tactics in the future, or change them.
Using the same demo account, test the multiplier option. This option helps you activate the leverage feature with a single click, just select the multiplier value.
Leverage, or financial leverage, is a trading tool that allows a market participant to use borrowed funds to increase transaction size and profit without having sufficient capital to do so. By analogy with the physical law of leverage, leverage in trading enables a trader to "raise" an amount that is tens or even hundreds of times bigger than in a natural way.
However, in spite of the fact that this function is easy to use from the technical point of view, there are certain risks in using this kind of loan. Therefore, it is important to understand how the leverage mechanism works before using it in live trading.
Open a trade using a demo account and switch on the multiplier. Try to select multiple multipliers for different trades. Evaluate the benefits of increasing your investment amount with leverage. Figure out the refund mechanism in case of unsuccessful trades.
Only after a sufficient number of test trades with leverage, understanding the mechanism of this function, can you apply leverage in binary trading.
Why choose a trading platform with a demo account?
Binary options trading attracts many traders because it gives them the opportunity to make good money.
But at the same time you are likely to see a lot of positive and negative feedback about trading with this financial instrument. Why so?
The reason is that the high level of profit per trade and also the often several minutes duration of a trade make many traders think that binary options trading is a kind of gambling on guessing bets. Therefore, guided by this principle, these traders, of course, suffer losses.
In fact, trading binary options, as well as any other financial instruments, is subject to the laws of the financial investment market and requires careful study and deep understanding.
That is why reputable broker companies offer you the possibility to open a demo account and practice trading without risking real money.
This is a great offer and should not be missed out on any account!
Open a few practice trades. Try to analyze the situation on the market, using methods of technical and fundamental analysis. Test trading tools. Look at the results of your test trades and draw conclusions. Are your assumptions working and have you correctly predicted the behavior of the price of the underlying asset? If the result is correct, it is worth honing your trading skills by performing similar operations over and over again, so that you can formulate your own trading strategy.
If the test operations were unsuccessful, it is worth analyzing your actions and drawing conclusions. Change your strategy and try again.
Also, advanced trading platforms are equipped with entire training sections with video tutorials on trading. Studying these lessons and practice on a demo account is a good way to quickly learn the ins and outs of trading.
So, it is really hard to overestimate the benefits of having a demo account on a trading platform. Only after you have mastered all the peculiarities of trading, open a real account and trade real trades.
Choose a reliable trading platform, open a binary options trading demo account in Malaysia and try your hand as a trader today - it is absolutely free and safe!