Lesson 2: Preparing Your Arsenal
2.1 Live Account vs Demo Account
When you register with an online broker, you usually get two account options: Live Account and Demo Account. Each serves a different purpose.
Key Differences
| Live Account | Demo Account |
|---|---|
| Used for real trading | Used for practice |
| Requires real money deposits | Comes with virtual funds |
| Profits and losses are real | No financial risk |
| Affects your account balance | Ideal for learning and testing |
When to Use a Demo Account
A demo account is a practice version of a trading platform that works like a real account but uses virtual money.
It is highly recommended if:
You are new to trading
You want to learn how the platform works
You want to test strategies without risk
You want to improve confidence before going live
Even experienced traders use demo accounts to experiment with new strategies or test market ideas safely.
Although demo accounts use historical or simulated data, they are extremely useful for understanding risk, probabilities, and trade execution.
When to Use a Live Account
A live account allows you to trade in real market conditions using your own funds.
Use a live account only when:
You understand how trading works
You know how to manage risk
You are emotionally prepared for profits and losses
Remember, profits belong to you, but losses are also your responsibility.
2.2 Trading Platforms: MT4 and MT5 Explained
What Are MT4 and MT5?
MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are the world’s most popular trading platforms, especially for forex trading.
MT4 – Best for forex-focused traders
MT5 – Supports forex + stocks, indices, commodities, futures
If your main focus is forex trading, MT4 is more than sufficient.
If you plan to trade multiple asset classes, MT5 is a better option.
How to Set Up MT4
Download MetaTrader 4 from your broker’s website
Run the setup file
Accept the license agreement
Choose installation location (optional)
Complete installation and launch the platform
Once installed, log in using your demo or live account credentials.
How to Set Up MT5
Download MetaTrader 5 from your broker’s website
Run the installer
Accept the license agreement
Choose install folder (optional)
Finish setup and launch MT5
Enhance Your Platform with Extra Tools
Many brokers offer advanced tools such as:
One-click trading panels
Economic calendars
Forex news terminals
Advanced order management
Account management tools
These features can significantly improve your trading efficiency.
2.3 Other Trading Platforms You Can Use
WebTrader (Browser-Based Trading)
WebTrader allows you to trade directly from your browser without downloading any software.
Key Features:
Works on any operating system
30+ indicators
Multiple timeframes
One-click trading
Access MT4/MT5 accounts online
ProTrader (Advanced Charting)
Powered by TradingView, ProTrader is ideal for traders who rely heavily on technical analysis.
Highlights:
12+ chart types (Candlestick, Renko, Kagi, etc.)
Advanced drawing tools (Fibonacci, Gann, Elliott Wave)
View up to 8 timeframes simultaneously
Mobile Trading App
Mobile trading apps allow you to trade anytime, anywhere.
Features:
Access to 1,000+ instruments
Trade directly from your phone
Live charts and indicators
Custom watchlists
News and market updates
Perfect for traders who want flexibility and quick market access.
2.4 Recommended Websites to Learn Forex Trading
Investopedia
A trusted learning platform for understanding trading and investing terms. Ideal for beginners and professionals alike.
Seeking Alpha
Provides market news, analysis, and insights from financial experts, including forex market updates.
BabyPips
One of the best forex education websites for beginners. Offers structured lessons, quizzes, tools, and community forums.
Trading Academies & Learning Hubs
Professional academies provide:
Step-by-step trading education
Technical & fundamental analysis
Risk management lessons
Trading psychology guidance
Live webinars and expert sessions
Module Summary
Demo accounts help you practice without risk
Live accounts involve real money and real emotions
MT4 is ideal for forex traders; MT5 supports multiple assets
Web, desktop, and mobile platforms offer flexible trading
Continuous learning is essential for long-term success