/ What Is

Trading Simulator - Should you use it?

The Forex and CFD’s (contracts for differences) markets are the largest capital markets in the world in terms of volumes. However, it is not easy entering those markets and understanding all the complexions and risks involved in the process.

For those who have no experience it is advisable to start with a forex trading simulator, in which the trader can experience with various strategies of trading, and view first hand how changing certain parameters in his chosen portfolio can affect the trading results.

Many novice traders tend to jump straight into the markets and start trading without enough prior knowledge or designing an appropriate trading strategy. This practice holds many risks and might result in unnecessary losses.

Over the years, the trading markets have evolved, and designated tools were developed to help traders and teach them how to trade smarter – one of these tools is the trading simulator.

The trading simulator is a tool that helps practice and get familiarized with the world of trading. It was built by traders for traders and may assist to strategize and create a more efficient portfolio, avoid trading mistakes as much as possible and hopefully increase profits.

It’s considered to be the best learning tool for novice and professional traders alike, since it creates and shows simulations of the real trading results of strategies that were used in real trading conditions.
This helps with demonstrating the feeling of trading without the need to risk their own funds in the process.

Using a trading simulator before or even while already actively trading the markets enables traders to generate various simulations of automated strategies view their actual trading results and refine their settings.

This can be done on multiple time frames and in the various available markets such as stocks, Indices, Forex, commodities and more.


Trading Simulator Advantages

  1. Understand if you can really connect to the concept of trading with your own money - Anyone planning to enter the trading world can use a simulator to understand if they are emotionally built for this type of trading, which can sometimes be a bit complex. Some people may enjoy trading, and others may find it inappropriate for their personality and lifestyle.

  2. Risk-free trading - New traders who are still learning how to trade can feel more confident about opening a trading account once they reviewed simulated trading strategies results. The trading simulator helps gain confidence without risking real money, and not having to worry about making costly mistakes.

  3. Developing skills for managing money properly - One of the best ways for successful trading is working according to risk management rules – The simulator shows virtual profits or losses, which the traders can learn and draw conclusions. This enables both novice and experienced traders test and optimize the strategies they want to include in their trading.

Important things to know before using a trading simulator

  • Track Your Transactions, even though it is not real money, it is critical over time so you know which strategies to focus on and which ones to avoid in advance.
    It is also recommended to keep track of transactions in orderly tracking tables.

  • Consult an experienced mentor who would understand you and which will provide you with answers and advise you on how to maintain your profitability.

  • Make sure your simulator shows accurate results based on real trading conditions - that is, when you run simulations of various strategies make sure they are showing results from actual trading accounts and not of back testing simulations that are much less effective.

  • It is not recommended switching to real money trading until you gain enough confidence and ready to invest your own money. It takes a lot of patience and a lot of practice, but it will ultimately provide the best possible results.

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