This is the third article in our series of Forex for Newbies.

(To get maximum benefit from our `newbie` articles we recommend you read them in the correct order: to read first article click here and the second article click here).

Once you have familiarised yourself with the Elliott Wave Principle (article 1), and with the basic jargon and concepts of trading Forex (article 2), you will be ready to open a demo account, which is what this article is about.

It really does not matter who you open the demo account with because you will be trading with `fake` money. The main purpose is to use the demo accounts for practice, practice, practice. As you will see there are some major online forex companies and many minor ones and at this point in your forex education it`s a good idea to go ahead browse through the websites of all the major online forex companies to get an overview of what they provide.

It is important that you sign up for more than one demo account because this will give you a wider perspective of forex trading platforms. Beware, some of these companies will actually phone you after you have filled in your registration form for a demo account. Be prepared, and jot down some questions you may have regarding the trading platform so that if you do get a call you can get answers to your questions.

Before you begin, we first recommend this online review as a good place to start. You will find the reviewer`s opinion on some of the major online forex platforms and their performance and it also covers issues such as pip spreads and ease of platform use. A second place to look for great reviews is here.

As Elliott Wave traders there are a couple of points we are interested in that the aforementioned reviews do not cover. First, the charts provided with any online forex trading platform must have the option of Fibonacci ratios, and thankfully almost all of them do. But more important, what we are looking for are safe banks where your money is held.

As this article at The Deflation Times shows, the number of bank failures is steadily increasing despite less shrill cries from the media. We expect this trend to increase markedly over the next three years, so it is very important that you don`t find your funds suddenly unavailable due to the bank your broker uses suddenly experiencing liquidity issues.

We take this issue seriously. Once you have identified a platform that you like, ask the name of the bank client funds are held with and check out that bank`s reputation thoroughly. For us this is a major requirement, not to be overlooked in favor of any other advantage a company may offer.

If you`re serious about finding the best online forex platform for trading currencies, then check out the forex broker table below which shows our overview of some of the major forex players with the banks they use (click on image to see full table):

For a beginning forex trader, the minimum deposit is very important. We recommend you start out small, and a few companies offer micro accounts which can be opened for as little as USD 25.00. A rule of thumb would be that if you can double your initial deposit, you may be ready to move to a regular account and trade full 100,000 lots.

FIFO rules are `First In, First Out`. All American trading platforms will operate with this rule. What this means is that the first position placed will be the first position closed when you choose to close a trade. You cannot have total choice over which position to close and when. So, if your strategy is to have a long term trade, letting it run over weeks or even months, with shorter term trades running over days or weeks, then FIFO will not work for you. With FIFO rules you are unable to place a buy and a sell for the same currency pair, not that this is a very good strategy anyway, but that`s another story. So we personally prefer to trade with platforms that do not use FIFO rules, if only because it allows more choice and flexibility. For a beginner it is also much simpler.

Additionally, we take into consideration the location of the head office. We prefer an office not located on Wall St., for financial reasons which should be obvious in these tight economic times. We prefer companies based in Switzerland because they have a good track record regarding safety of client funds and their trading rules allow for some flexibility. An additional benefit of a Swiss based institution to consider is their banking secrecy laws.

Once you have found an online platform that performs well for you, with a broker who puts your funds in a safe bank, the next step is to develop a trading strategy. Our next article in this series will cover trading strategies and tips.

By the way, for those who are Apple Macintosh users it can be difficult to find a platform that performs well so we have checked out to see if the trading platforms offer Mac compatibility and have added this information to our forex broker overview table.

This article comes to you from elliottwaveforex.com. We use the Elliott Wave Principle to predict market trends and movement.