Are you ready to trade live?
A Demo account offers a safe place for traders to hone their skills without the fear of losing money. But what is next after trading a Demo account? What factors will you consider before moving from a Demo account to a Live account?
This article will help guide you. Here is what to consider as you advance into Live Trading.
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 able to generate consistent profits.
Do you trade profitably on a Demo account? This is crucial as it can be used as a measure to determine whether you will be profitable 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.
Do you trust your broker?
Another factor to look at is whether you are comfortable trading with your chosen broker. There are numerous Forex brokers and finding a legitimate one is of great importance.
Something to look at is whether the broker regulated by a relevant regulatory body. You should also be able to know how to use your broker’s trading platforms. For example; how to enter and exit trades, using different charting tools, etc.
Can you trust the broker with your money? What payment methods do they offer? Before moving to a Live account, make sure to monitor if depositing and withdrawing money is stress-free without any complications.
Finally, you should ensure the broker’s customer service is reliable and can respond to any issue that arises.
TradeForex recommends only trading with the best brokers, and you can find our list of best brokers here.
In Forex trading, managing risk will help as a cushion against heavy losses. Trading in a Demo account is different from Live trading since one involves virtual money and the other involves real money.
There is 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 in 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.
Adhering to Your Trading Rules
With the risk of losing real money, some traders may abandon their trading rules and try to formulate new ones. This may result in losses since they did not trade as per the rules they followed in their Demo accounts. This is why you may get reports on traders being successful on Demo accounts but unsuccessful on Live accounts.
If you were successful on a Demo account, it is best to apply the same rules you used to the Live account. In this way, you’ll monitor if you will be profitable in a Live account following similar rules.
Moving from a Demo to a Live account is a crucial step. It will involve traders investing and risking their money in an unpredictable market. It is therefore important for them to be well prepared. The above points are very important factors for you to consider before trading in a Live account.
Want to keep reading? You can find lots more Forex Education articles here.