Are you ready to trade on a live account? A demo account offers a safe place for you to hone your skills without the fear of losing money. But how do you know when it’s time to start trading real money? And what do you need to consider before moving from a demo account to a live account? This article will help guide you through the process.
Have you learned how to use the platform?
Are you comfortable making trades? While many forex trading platforms are quite user-friendly, it’s still important to make sure you know how to use them properly before moving to a live account. It’s also important to learn how to get the most out of the platform. By learning how to use all the available chart analysis and risk management tools, you can further improve your trading strategies and chances of success.
Do you have a trading plan?
As you know, the Forex market is unpredictable. You can’t always correctly predict future price movements. However, as a Forex trader, you should be able to develop a trading plan that helps you generate consistent profits. This confirms the importance of testing your trading plan on a demo account. This way you can monitor through your trades, whether or not your trading plan will be successful.
Does this plan make consistent profits on a demo account?
Do you trade profitably on a demo account? This is crucial as it can be used as a measure to determine whether you will make profitable trades in a live account. If you are still not profitable on a demo account, improve your skills and find better strategies to maximize your profits and minimize your losses. It’s really important to make sure you are profitable on a demo account before moving to a Live account.
Are you trading with a trustworthy forex broker?
Can you trust the broker with your money? What payment methods do they offer? Before moving to a live account, you should make sure that you are trading with a regulated forex broker. You should also make sure that you can easily deposit and withdraw your money from that broker without any complications. Finally, you should check that the broker’s customer service is reliable and that they respond quickly to any questions you have. Unsure which brokers you can trust? You can also check out our list of best online forex brokers here.
Have you learned how to manage risk on a demo account?
In Forex trading, managing risk will help as a cushion against heavy losses. Trading on a demo account is different from trading on a live account, as one involves trading virtual money and the other involves trading real money. There is a lot more pressure when it comes to trading real money because of the risk involved. As a trader, setting up and following your risk management rules can help you improve your chance of your success. This may be through the use of stop losses, trailing stop loss, take profit levels, etc. Before trading on a live account, make sure you have well-set risk management strategies that worked on your demo account.
Do you always stick to your trading plan when on a demo account?
When the risk of losing money becomes real, some traders abandon their trading plans and try to formulate new ones. This often results in losses, as they did not trade as per the rules they followed in their demo accounts. And this is why you often hear about traders being successful on demo accounts but unsuccessful on live accounts. If you are successful on a demo account, it is best to apply the same rules you used to the live account. This way, you’ll be able to monitor if you are still profitable in a live account when following similar rules.
Moving from a demo to a live account is a crucial step for all new traders. It involves investing and risking your money on an unpredictable market. It is therefore important for you to be well prepared, and for you to time it right.
Want to keep reading? You can find lots more Forex Education articles here.