The forex training and practice that you complete all leads up to trading on the forex live market. However, you have to be sure that you are ready to trade on the forex live market. There are many traders who think that they are ready only to find themselves unprepared for the forex live market. It is important that you understand what to look for in your trading before you take the final step to forex live trading. You should also consider what the first step to forex live trading is.
Using a Demo Account
Before you trade forex live you need to use a demo account. Demo accounts offer a simulation of the market that allows you to hone your skills and prepare for the market. There are some traders who forgo the demo account and find that they are extremely unprepared for the live market.
Demo accounts must be used to hone skills, test strategies and practice on the trading platform that you are going to be using. If you do not know how to use the trading platform that your broker offers then you are going to have some difficulty placing orders.
Many traders are confused about how long they should use a demo account for. It is recommended that you use the demo account for a full month. This allows you to determine whether your trading is ready for all the movements that happen during the month. There are a number of news releases that come out each month and other events that affect the market monthly. You have to be able to trade at these times to be successful on the market.
What Demo Trading Does Not Prepare You For
There are some points of live trading that a demo account cannot prepare you for. It is important that you know what these points are and how they affect your transition. The emotions of trading cannot be replicated on a demo account. This is due to the lack of risks that you face on the demo account. As the demo account is a simulation you do not have to worry about losing money.
You have to be aware of this lack of preparation when you move from demo to live trading. If you do not consider this then you will not be prepared for the emotions of the market.
The First Step in Forex Live Trading
When you take the first step into forex live trading you need to know what this is. The first step would be to open a micro or mini account. If your broker offers a micro account you should use this, but if they don’t then you need to look at a mini account. These accounts offer lower risks than the standard account.
These lower risks are needed when you first start trading live. Most new traders will lose on the market when they first move from demo trading. This is due to the emotions of the market and the slippage that occurs with the order execution. When you have a low risk account the losses you face will be lower.