Tag: Learning

Demo vs. Real Trading: Things to Know Before Making the Switch

It is generally suggested to practice your strategy and accuracy on a demo account while you are new in forex until you know inside out of all the conceptual strategies and nuances in this typical world of trading. And of course, demo account and real account are not different, means you can learn everything you need to learn to make profitable trades. In fact, it is always suggested to that trader’s transition to real account only after they have realized consistent results on a demo account.
New traders generally tend to start their journey with a demo account and yes, it makes sense practicing on a demo account as it is convenient and a practical way to gain knowledge and basics of trading. Here, things get a little tricky. Once the traders have consistent profit, they start expecting the same results from real accounts. But, not only these expectations are unrealistic, but they will also set you up for failure.
It is obvious to understand a sort of psychological block, and fear of losing real money can be scary and distracting. After some period of trading simultaneously, the thought of real losses won’t actually affect the traders’ minds much. If the trade fails traders unconsciously think of a better position with a new opportunity so that they can recover the loss they made instead of being agitated about the losing positions.
Before making the switch from practicing in a demo account to real trading, it is vital to understand and experience what makes these accounts different from one another. Considering these points and planning accordingly will better prepare you and give you the confidence to shift into a real account.

Let’s be conscious of some of the essential points:

Know the risks

You don’t have to face a monetary risk when trading demo. Losing streaks on a demo is not upsetting or discouraging as you have the comfort of knowing you can replace your account with more funds whenever you wish to do so.

Understand the psychological difference

The bottommost line is that trading on a real account reminds the rollercoaster of emotions, especially, during the first shifting from demo trading to real. You are bound to feel uneasy, restless, excited, nervous throughout your first couple of trades. Exaggerated feelings of frustration or anger may also make an appearance.

Accept the volatility of the market

The Market is volatile as it changes in the blink of an eye. Lots of traders are not prepared to handle volatility, while some traders may find it difficult to trade when the market is a little slow or within its sideways. Make sure you have plenty of plans and strategies for all types of market conditions before taking the leap into real trading.