Before you start trading with a live account, it’s advisable that you first try your hand in a demo account. A demo account presents all the market conditions as found in a real account. However, your account is filled with virtual currency. Therefore, you can execute orders without actually risking your money. A demo account is absolutely the best way of kick-starting a career in forex trading. When is the best time to shift from a demo account to a real account?
From experience, we can say that there is no definite time to change from a demo account to a live account. The best approach is to practice and sharpen your strategies until you feel comfortable enough to start live trading. And, you should be cautious not to start demo trading too soon. Some traders quickly start live trading once they make some few profits in a demo account. If you’re not able to make profit consistently in a demo account, then there is no need to start live trading. If you do this, you may blow out your live trading account very fast.
Importantly, when switching from a demo account to a live account, you should do it in stages. You should start with a micro account, then a mini account and finally a regular account. If you switch this way, you can limit your losses and develop the confidence of navigating the markets. The mistake most forex traders make is to shift from a demo account to a live account and trade using high leverage. However, if you shift as in the aforementioned stages, you can greatly reduce your losses and you will eventually find forex trading to be enjoyable.
Before you switch to a real account, you should ensure that you have fully grasped how the forex market operates. Lack of knowledge is one reason why most forex traders fail. As such, you should stay abreast of the happenings of the forex market. And, since the forex market is very dynamic in nature, constant education is key to reaping big profits in this business.
Lastly, before you shift from a demo account to a real account, you should ensure you have a profitable strategy for trading currencies. Trading using a demo account enables you to perfect your strategy before subjecting it to live market conditions. If you’ve a profitable strategy, then you can trade with it in a live account.