Learn Forex trading first on a Forex demo account
It may be tempting to begin trading with real money, but the best thing you can do for yourself is to demo trade until you develop a profitable strategy before determining if a career in Forex is a good fit for your goals and lifestyle in the long-term.
Most Forex brokers will allow you to open a FREE Forex demo account. These “mock” trading accounts have all of the capabilities of a “real” account and are used by many Forex traders to test their trading methods before risking real money in an expensive trade gone wrong!
The Forex demonstration account allows you to learn about the mechanics of Forex trading for free and experiment with your trades risk-free.
It may be tempting to begin trading with real money, but the best thing you can do for yourself is to demo trade until you develop a lucrative strategy before determining if a career path in Forex is a good fit for your goals and lifestyle in the long run.
Don't trade your prop account until you are winning
You’ve probably heard the adage: “don’t boil your frog too quickly”. If you’re Forex trading live using a Forex demo account and consistently losing money, you should continue trading demo before creating an actual money-making account.
Every Forex trader’s success begins on day one by properly laying the foundation through simulated training. When they feel confident enough in themselves when profit or gains were made online with virtual cash, only THEN should they consider moving on to real-life transactions. As we all know, Forex markets don’t always move the direction we want them to, and it is easy to be caught up in negative emotions.
Build a sample of demo trades on one currency pair
The key to success is selecting the appropriate currency pairings with which to begin Forex demo trading.
To begin, stick to one of the majors, like GBP/USD or USD/CAD, because they are the most liquid and have tighter spreads. This reduces the possibility of slippage when it comes time to execute an order in real-time market conditions without incurring any margin calls.
Next, work on refining your trading methods by developing good habits before diving in head first and risking money that isn’t yet yours. Your money should be saved until after you have had enough practice.
Finally, have experience dealing with different Forex markets so that you can adjust accordingly to what the current data suggests about trends from previous events.
Inability to let go of trades or directions
The markets are complicated and difficult to navigate, especially if you don’t recognize how your own biases might influence your decision-making. Fortunately, there are common flaws in our thought patterns that we should be aware of at all times so that they don’t catch us off guard!
When increasing your confidence in the charts, it’s a good idea to be able to emotionally distance yourself using a Forex demo account and its virtual funds.