The foreign exchange market or forex in short is perceived to be one of the most popular online money making opportunity if you know how it works. If you are thinking of starting a forex trading business, but have absolutely no idea what forex trading is all about and how forex trading can make you money, using a free forex demo account to learn how to trade forex can be a good idea. Most online forex brokers nowadays offer some form of online real time currency trading system where the traders can trade forex 24 hours a day at the comfort of their homes. A lot of these brokers offer free forex demo account or a practice trading system to allow you to get familiar with their trading systems. You can take the opportunity to learn about forex trading by using these free forex demo accounts or practice trading systems.

A forex demo account or practice currency trading system normally offers you some "practice" money to start off your forex trading with actual quotes and price movement charts in the real market environment. Using a free forex demo account is the most cost effective and risk free way of learning how to trade forex. There are two main purposes you should start forex trading using a forex demo account if you are a novice trader:

Firstly, you can find out if the trading platfom suits your needs based on your trading experience. You can run and test the system and see if the functionality suits your requirements. You can also find out the user friendliness of the trading platform and decide if there are sufficient tools provided to help you succeed in forex trading. You can try a number of currency trading systems to determine which system suits you the best before committing any real money to trade forex with the trading platform.

Secondly, use the "practice" money to start trading risk free and in the process learn how you can profit from long or short positions. You can test out your strategies and learn how to pick up forex signal without any risk. This way you can work out the best strategy including using stop loss limits to minimise losses and profit calls to maximise your profit. You can also learn how to read charts or use other technical analysis tools provided by the system to sharpen your forex trading skills.

You may find that some of these currency trading systems not only allow you to trade forex with a range of currency pairs, they also allow you to trade a selection of shares/stocks, financial indexes or even commodities. So, while you learn about forex trading, you can also pick up trading of other asset types to see if they complement your forex trading using the demo forex account without risking any real money.

If you are new to forex trading, I strongly suggest that you start off with a free forex demo account to find out how it works before you make your first real investment.