One of the most useful features that a new trader can use is the demo account. Before the evolution of technology, traders didn’t have online accounts and they were writing their trades on paper rather than introducing them at the market. This is why the term paper trading is often associated with forex demo account trading. The demo or practice accounts allow new modern traders the opportunity to paper trade. It has the advantage of not requiring any deposit, since the trading is simulated and account balance is virtual.
Trades can be initiated and positions closed as usual, but no money is at risk. All losses are simulated, but all gains are also simulated. This has the advantage of allowing traders the opportunity to practice their strategies in a simulated environment without the fear of losing their initial investment. This is a very useful tool to learn, because traders will look at the indicators and try to determine when they should open a trade, how long they should keep it open and also when is the best time to close that position.