We are about to begin a 10 post series that we are really excited about. In this series we will go over the importance of demo trading as part of a traders educational process. We will release one post on it for the next 10 tens. Demo trading should not be taken to lightly. Take Demo Trading Seriously We feel that demo trading is one of the most important parts of learning how to trade the forex market. A trader can learn how to use the platform, learn how to spot trending markets and flat markets, learn how to use good money management techniques, and learn how to take a loss and get right back in the market on the next signals. Perfect practice makes for perfect execution in trading. It is a common belief in this industry that traders experience superb performance when trading in a demo account then go on to experience significant loses in their live trading accounts. It is good to experiment in the demo account but you need to take every trade seriously. This is the time to learn how to overcome emotions, the feelings of greed, the thoughts of trying to get even with the market, and it’s only a demo account thinking. Yes it is only a demo account but this is where you learn your strengths and weaknesses so be vigilant at all times as to what the market is willing to give and what you are seeing. NEVER take demo trading lightly. Think of every trade as if it were real money. Demo trading is a critical factor for success in trading as it is in many other industries. You would never want a doctor to operate on you without prior practice and experience. What about letting a young person drive a car with out some practice and instruction. The results are not going to be good. You can be a little more aggressive than you would in a real account. This is where you can stretch you skills and go from 1 lot to 2 or 3 lots. Learn how to add onto a trade when it is going in your direction to maximize profits and when to cut a losing trade and get out. You may blow up the account but take it seriously. Practice and develop the skill of where to place your stop loss. We know that you are going to try trading without a stop loss. Put a stop loss on even if it is 100 pips away from the entry of the trade. I had a trade on the other day that had a stop loss of 93 pips on a 15 min time frame. The market came down by 85 pips then went up to hit my take profit. I had confidence in the trade because of experience and practice. What if I had been taken out for a loss? Well, I would still have had money to take the next trade with no emotional baggage of a losing trade still taking me down. When you get out of a losing trade it seems to clear up your thinking just like the “Claritin” Ads on TV. We have made a list of things that need to be on your awareness list.
