Should You Open a Live Forex Account Already?

Should You Open a Live Forex Account Already?

Should You Open a Live Forex Account Already?If you think you are finally ready to make the transition from demo trading to having a live account, then you should also be psychologically prepared for it. Not only will you have real money on the line, your emotions might also have a bigger impact on your trading decisions.

A good rule of thumb to remember before going from demo to live is to ensure that you have had a good trading run for at least three months. Of course this time frame can vary depending on how much time you spent learning about trading but it is a reasonable length of time to make sure that you have had a strong grasp of basic trading concepts and are able to make consistent profits. This can also ensure that you’ve spent a considerable amount of time getting in sync with market movements and that you can hold your own even when real money is at risk.

Another factor to consider is whether or not you’ve tried various trading styles and found the most appropriate one for you. As mentioned in an earlier section, this has to do with your personality and lifestyle, as you should be using a strategy that you are comfortable with. When you have found the trading style that suits you, it will make for a smoother transition from demo to live, as you simply have to go for consistent execution instead of having to experiment with different trading techniques with a live account.

To make sure that you will be keeping track of your improvements both in profits and in your trading mindset, you should also have a trading journal up for review when you transition from demo to live. Before forking over your hard-earned cash, it would be a good practice to have a quick review of your trading journal from demo to remind yourself of which aspects of your trading you can still improve on and to take note of the strengths you should play.

Lastly, you can gain enough confidence to carry on with your demo success in live trading if you have the numbers to back it up. Unless you’ve been able to make consistent gains and have a good expectancy in demo trading, you might just wind up doubting your trade decisions when you start trading live. This is why it is crucial to get your risk management practices right and have rules for maximizing your winners and minimizing your losses. With a positive track record, you can be able to place full trust in your trading strategies and be confident to put this to use on a live account.

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.