This article looks at the act of switching from forex trading on a demo account to trading on a live account.
When you trade on the forex market you will be told that you need to trade on a demo account first. Trading on a demo account allows you to learn how to trade and practice before you have to risk any money. The safe environment of the demo account prepares you for the live market. However, there are a lot of traders who find it hard to make the transition from demo forex trading to live forex trading. It is important that you know what you should be doing and whether or not you are ready to make the move.
Should You Leave Demo Forex Trading?
The first step in making the move from demo trading to live trading is determining whether or not you should be doing this. There are a lot of traders who feel that they are ready for the live market only to find that they are not. You have to be very sure that your trading is ready for the live market.
One point that you should consider is how long you have been trading on the demo account. It is recommended that you trade on the demo account for at least a month before you make the move to the live market. This amount of time allows you to see if your trading can cope with all the ups and downs that the market goes through in a month. If you have made changes to your trading strategy during the month then you have to consider how long it has been since you last made a change. You have to trade on the demo account for a month without changes before you consider moving to the live market.
The Account You Open
When you move from the demo account to the live account you have to consider the type of account that you are opening. A lot of traders make the mistake of going straight for the standard trading account. This is due to the fact that the standard trading account is the one that all traders will want to use at some point. The problem with this is that the standard account is not the one that you should actually be opening.
When you first make the move from demo to live you should look at getting a micro account. If the broker that you are using does not offer a micro account then you should look at a mini account. These accounts offer smaller lot sizes which decreases the risks that you face when you trade.
The Emotions of the Market
The main problem that traders have when they move from the demo account to the live account is the emotions of forex trading. When you trade on the demo account you are not going to be confronted with fear and greed because you are using virtual currency. However, when you trade on the live account you are going to be risking your own money. This brings a number of emotions to the table that you may not be prepared for.
These emotions can often lead to losses on the market. This is why you need to open a smaller trading account when you first trade on the forex market.
Get a free Forex PDF PLUS:
- 14 Video Lessons
- Free One-on-One Training
- A 5000$ Training Account
- In-House Daily Analysis
- Get FULL ACCESS