If you have decided to finally step out of the protection of a demo trading account then you are on the verge of making a huge decision in your trading career. Typically, once a forex trader makes this leap, he does not like to come back unless it is to test new strategies.
Forex live trading, however, is a complicated affair which requires deliberation and a lot of care from you if you want to succeed. You will have to consciously try to avoid making mistakes in the market. Thus, knowing what to avoid can stand you in good stead in the long term. Consider the following.
Having a Poor Internet Connection
The forex market is very volatile. This means that forex rates change drastically from one moment to another. In order to succeed in forex live trading, you will need to have a good internet connection because without real time forex rates updates you will make some very bad mistakes.
Using All Saved Money
Before you place your first forex live trade, you have to sort out how much money you will invest. It is advisable for you to not invest all your savings and, instead, only invest your risk capital so as to keep the pressure off you. If you invest all your savings then the pressure alone will see you make mistakes while trading.
Account Capital Too High
In addition to only investing risk capital, you also have to make sure that your account balance is not too high. Initially, you will spend a considerable amount of your trading time in learning the practical aspects of the market. Most new forex traders suffer losses in the early stages of their forex live trading careers for this reason.
Lack of Education
You should never enter forex live trading unless you are absolutely sure that you have learnt all there is to learn from forex trading courses, mentorships, and even demo account trading. Without proper knowhow, forex trading can be very risky for your financial well being.
Relying on Demo Account Too Long
However, it is also important for you to not rely on your demo trading account for too long. The reason for this is that initially demo trading would be beneficial, but if you do it too much then you will start adopting bad habits which would not help you while forex live trading.
For instance, your stint on the demo account will make you feel very invincible because it is very easy for a trader to become prosperous through a demo account. This would cause you to have unrealistic expectations from your forex live trading efforts. Unrealistic expectations, when not realised, would lead you to financial ruin.
Not Matching Trades with your Personality
Finally, throughout the time you spent on the demo account, you should have worked out what type of forex trading suits your personality so that your forex live trading efforts are less stressful. Your options include scalping, day trading, and long term trading.
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