It is widely known and essential for all new and beginner forex traders that you begin with demo trading.
Demo and practice trading accounts operate with real market data and give you, the trader, a real and complete experience of trading without having to risk real money. Every trader will need to eventually graduate to real live trading – the time it will take depends on the individual and how long it will take for you to be fully prepared.
There is nothing lost by continuing to trade on a demo account, but there comes a time when you won’t have anything else to learn from a demo trading experience. With a real trading account it will give you far more insight into how the foreign exchange market truly works.
Learning all the Essentials from Demo Trading
By the time you’re done with your demo account you should understand all the mechanics of the market. You should have an extremely thorough understanding of how the market logistically operates, how to use a brokerage account, how to use your trading software, and how to initiate trades. No trader knows absolutely everything about the forex market, but you will need to understand the fundamental basics of how to trade.
This is what demo accounts are generally for even for BitCoin Learning Guides ( CryptoCurrency )
In addition to understanding your trading platform, you should also know which currency pairs you’re interested in trading. Each currency pair operates in unique ways and strategies that work with one may not work with another. This has a practical aspect too: certain currency pairs may not be supported by a brokerage, affecting where you can open your account. You should have practiced trading with these specific pairs and you should feel confident in predicting these pairs.
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Before you start live trading, you should be showing consistent levels of profit. You should not be on a down turn; even if you have made money overall, you shouldn’t begin investing in a live account if your recent trades have been failing. Your strategy may no longer apply to the current market. Generally a trader wants to show anywhere from three months to a year of solid, profitable trading, depending on their confidence and risk level.
Finally from the essentials, you need to have enough money to start trading : Cryptocurrency Signals, BitCoin, Dash, Ethereum, Ripple etc
The forex market is special because you can get started with such a small amount. However, starting with a small amount also means that even with leverage you won’t be profiting much. The more you can invest the more money you’ll make, but as with all investments you should never risk more than you can afford to lose.
Developing a Working Trading Strategy
Coming up with some kind of working strategy is probably the most tricky part.
Once you’ve determined your currency pairs that you’re going to trade, you need to track them so that you can perform analysis on them. Your trading platform will provide all the tools necessary to identify trading indicators, but you’ll need to develop working plan and trading strategy regarding when to trade and how much to trade.
See our article that covers choosing a trading strategy for help.
Every trader tailors their strategy to their own personal risk levels and knowledge, even though they may start out with research and analysis gleaned from other sources. Developing a working trade strategy requires creating and developing an account with proper money management and implementing a working process to find, monitor and place profitable trades.
Not every trade will be a win; in fact, that is virtually impossible. The overall goal is to ensure that there are more wins than losses, and even a slight margin can lead to incredible profits over time. If your strategies are profitable and you understand why they are profitable you should be ready to begin live trading on the forex market.
Get as much Market Knowledge as possible
Knowledge is crucial in forex trading.
The more insight you obtain prior to placing each live trade, the better. The market and each currency pair change significantly over time, and this is why it’s so critical to be able to adjust your strategies. It’s not enough to know just how the market is now; you need to have avenues for updating that knowledge.
You should know exactly where to go to find out the newest information regarding the forex market as a whole and the currency pairs that you’re following. As in many fields, what is important is that you understand how to do research, rather than having specific knowledge that may eventually become outdated. As a trader, you will need to constantly modify and up date your trades, and even strategy – to compensate for new and more accurate data.
It is vitally important to resist the urge of jumping into live trading too soon also. To have a greater understanding of the market, you need to practice trading for a considerable amount of time so you can to see the seasonal market fluctuations and turns the market may make. You will need to experience upswings and downswings and see how the market has a tendency to both evolve and adapt. You will also learn critical lessons regarding money management and potentially overextending yourself. The market acts like a living, breathing entity, and it goes through phases.
Knowing about Money Management
Everyone can perform a successful trade from time to time.
Successful trading is often more about account management and money management than it is about being able to identify specific successful trades. You need to be confident in your ability to manage money. You should be operating with the same amount of leverage in your practice account as in your live account to test your ability to manage trades and leverage fully.
A small difference in available leverage could throw off your money management strategies. You must be able to avoid over extending yourself or involving yourself in too many trades at once, and you should be able to confidently capture profit rather than letting trades ride.
Money management is all about establishing discipline as a trader.
Without money management and discipline, you will still be able to make money on a winning strategy but it will not be sustainable. You can eventually lose everything because you aren’t protecting your profits in your account. With appropriate money management techniques, you can truly secure and retain your profits while minimizing your losses.
This is what enables you to survive unsuccessful trades.
So, are you Ready to Begin LIVE Trading?
There are some very real experiences that a trader simply cannot establish through the use of a demo trading account. Even if you think you’ve appropriately managed your emotions and psychology as a trader, you won’t really know until you’ve traded in a live trading environment.
It’s often better to get started small with your live trading rather than waiting too long and being “too” prepared, then moving into live trading being overconfident to find out it is a whole new ball game. A profitable trading account largely comes down to a working trading strategy, but you need to constantly evolve — as trading strategies, analysis, and theories can all become outdated over time.
If you have confidently covered all the aspects mentioned, you should be well prepared to take your trading to a live account.[/vc_column_text][/vc_column][/vc_row]