When should you move from a demo to a live Forex trading account?
It is often said that practice in Forex trading makes the perfect trader, but never has it been told how much training and what kind of practice will make An ideal trader, so when you learn a new Forex trading strategy, you first need to try it out on a demo account to see if it really works and then move to a live trading account. But how much time should a person spend on a demo?
When should I move from a demo account to live Forex trading?
There is no perfect answer to this question as spending too much or too little time both has its drawbacks, and the time required depends on One to One. Let’s understand this first, and then I’ll tell you when you should switch to a live account.
I came across a talk once, and the speaker said that to become utterly proficient at something, one needs to practice for at least 10,000 hours. But the question arises here: Does everyone have this number of hours to practice trading? I want to conclude from all of this that No one other than the trader himself can answer this question.
How long should I use a Forex demo account?
We will show a comparison of two Forex traders to understand this matter well:
The first trader intends to trade Forex full-time and has no other work commitments, while the second trader has a job and wants to trade
Forex part-time.
The first trader has much time to devote to learning and practicing on the demo account compared to the second trader, who has limited time for this purpose and may take a long time.
To sum it up, if one is ready to move on, one can get into live trading from fully demo trading, where the trader will experiment with different setups and strategies, and the broker will test the trading platform to get used to it.
Once a trader sees an improvement in their condition in the Forex demo trading account, they can always start trading on the live Forex trading account. If the trader finds that he can still improve in some aspects of trading, he can also spend more time in the demo account before going to the real account.
When should I start live trading?
It is now a matter of spending too much time or too little time
Its harmful effects. Let’s assume the first trader gives 5 to 10 days of demo trading before switching to a real account.
The problem here will be that he will not be accustomed to different market conditions because he has just started testing the new strategy on a demo account. He will also be unable to establish proper rules for the trading plan because he has not encountered different conditions in Forex trading in a very short time.
Is trading on a demo account the same as a real account?
When a Forex trader switches to a real trading account, i.e., a new one
Forex market conditions may cause him trouble.
Let’s say the second trader decides to spend three months on demo trading. So, while he is in the demo account, he is committed To developing various negative habits that will ruin his trading.
He won’t experience any emotions because it’s just fake money he’s trading. But in a real account, a single loss can cause overwhelming emotions.
So, he cannot control those emotions while trading real accounts. In addition, he will start taking risks recklessly; after all, it is just a demo account. Losing will only hurt the winner significantly and will likely make him feel overconfident. And when he does this for a long time, he will develop a bad habit of taking too much risk.
What happens in the first trading days on a live Forex account?
I was demo trading for a very long time, and in the meantime, I developed the habit of not stopping loss. This habit of not using stop loss was so ingrained in my mind that even when I started using a real account, I kept doing the exact wrong thing.
As a result, I blew up a couple of accounts before I was finally able to kick the habit. It is essential to understand that it is tough to eliminate negative behaviors or habits, and spending a lot of time on a demo account will likely help you develop such habits. So what should someone do if spending too much time or too little are both terrible?
The right way to trade a live Forex account is to set goals.
Set a goal and try to achieve the same goal two or three times with proper risk management, and only after completing this shift in goal can you convert it to a real account.
Like when I’m testing a new trading strategy, I
Set a goal of 20 to 30% as if I was able to make 20 to 30% of my money account at least twice by following my risk management plan.
It is essential to use a demo account to test a strategy before using it for real, as it enables one to become familiar with the plan and evaluate its effectiveness.
