Are Forex demo accounts fraudulent by Forex brokers?
There are small differences between demo and real Forex accounts at some Forex brokers, but it is very difficult to understand the purpose of these types of differences.
Differences may arise from a different feed source that a Forex broker chooses to show a particular price to a client. This happens in real Forex trading accounts, the Forex broker has to take the trader’s order, and depending on the types of trades, they send the trader’s order to the bank or a specific liquidity provider or wherever they have to fill out the trade orders, then they take the trader’s order and deliver it to him, of course with a difference or commission.
On the other hand, in a Forex demo account, the trader may be shown a chart with a final result. So he has the same Forex chart but can’t tell if there is a problem like transaction response time, currency re-quotes, or market slippage. If the trader does not know its meaning, he can look for information about the broker through his posts in order to know or if he does not feel it, it generally means a delay in the execution of the trader’s order or an increase in the price margin.
First, these differences do not matter if he is not a scalper and when one does not want to enter and exit the Forex market that quickly with a small pip. This is what the speculator does, so instant execution and a small spread are important.
Contrary to speculation, if traders are swing traders or position traders and take long trades, they probably don’t care about some small pips that some Forex brokers may try to get out of their account. In this case, they may find a delay of a few seconds or a slight nominal starch spread. What will they say now?
The Forex broker may do this intentionally or without any malicious purpose. If this bothers the traders or they are scammers and they don’t want their margins to be dumped when they open their real account in the main trading, first, they trade with a Forex demo account of a Forex broker to see if they face such a problem.
How can the broker be tested?
For this purpose, traders should test the Forex broker on the situation by the situation in order to get a better understanding of how to execute orders by a Forex broker in different trading situations.
First, traders open several consecutive Forex trades in order to know if they find any currency requites or delays in order execution. They should do it for a few days and as much as they can to get a certain number and size that is best and very reasonable to count on. So they shouldn’t do it too many times just for one trading day.
If a trader can’t see any currency re-quotes or any market slippage, they should be very suspicious because they are most likely giving numbers that are offline. Of course, Forex charts and Forex trading numbers are real, but they do not correspond to real Forex market conditions.
Another check that a trader can do is Forex trading on important market news to see how well a Forex broker performs in various situations. Where if their Forex broker is a trading market maker with a fixed spread, they will probably have to give the trader special re quotes for important Forex market news. If the trader does not do that, it will be really fishy because in real Forex accounts the broker will give the trader some special re quotes on those occasions. Of course, the lower the re-quotes.
The broker must have special slippage and widespread trading in such trades, because the Forex market moves on important market news is so fast that it does not give the trader instant execution all the time, if not like this all the time, the broker will make orders With different currency numbers than the first order.
If a trader has tried this for several trading occasions and can’t see these problems, the chance that his Forex demo account is fraudulent, with a special definition of manipulation here, is very high, or until it develops further, as he can make sure that it is and give him a position Trading different from a real Forex trading account. But if the individual is not convinced and thinks that his broker is great, he can move on to the next trading step before he opens the main real Forex account with him.
What else should a trader do to test a Forex broker ?
Now, the trader must open a mini trading account to try out his Forex broker in real trading situations, and he must do so according to the speculative trading strategy at his own discretion. The Forex broker has different types of trading accounts, so he can choose the smallest account and try the same trades he made with the Forex demo account.
If the trader sees an immediate execution or does not find any re-quotes, he may find the successful trade, so he has to stick to it and not let it go from him.
Of course, re-quoting of a single transaction that occurs from time to time, especially in the news of the Forex market, is acceptable, provided that the broker accepts his request afterward. The same may apply to the process of price slippage. Slipping is not always anti-rolling in nature. Sometimes they benefit him and give him some orders of deals better than what he asked of them and sometimes they may go against his favor and the deal gets executed at a price that is worse than what the individual wants.