Most people who starting to engage into forex trading will start their practical journey with a demo/dummy account.
There are many ways to success in forex, from reading a lot of forex trading book, learning fundamental and technical skills, discussing certain topics in forums, using custom indicators, and off course many other skills that I have not included above.
This time I will cover a slightly different side of unsuccessful of forex trading. Do you ever realise why you can make a big profit in demo account but blown up your live account within month or week or even day or worst in a hour? Simple because you are not yet ready for a real live trading eventhough you might think it is a good time to go live.
Newbie/beginner traders often do not realise that demo and live account has a very big difference in terms of emotions of greed & fear, anger, self pity and many other psychology related. A wise trader often once says that there is only a thin of paper barrier divided between a good trader and a bad trader which called emotions.
We are human and it is normal to have a desire of winning every trades and getting a big positive number in trading forex but is there a holy grail in forex? Will there be a best system that can generate a 100% winning ratio? The answer is NO.
Let's be honest to yourself and answer the below questions, if your answer is YES to one or all from the below means you are not ready for a live trading.
1. Do you enter the trade because of your feeling says that it will go up or down?
2. If you have a signal generated from a system you have, do you do a cherry picking and thought that its going to work instead of taking every single signal generated by your system?
So what do you think you are? If your answer is NO then you may go live but not guarantee of profitable trading yet but if your answer is YES then practice in demo a little bit longer.
Emotion, emotion, emotion !!! How many times do you hit a margin call because start with small account? How many times do you play big lot with <$1000? and you can name it all the rest.
You need to build a good and positive confidence in yourself and your plan and your strategy without involving your emotion during trading. Yes, there are many reasons for you to believe that you can someday success in forex but demo is important if you treat it as a live account.
You can never have a good stage of emotion if you are trading demo with a dummy money without serious intention to it. Do not risk yourself by training your emotion in a live account. Your emotional psychology might be different between demo and live account but your commitment, it is the one most important step to success.
Trading successfully is no simple and easy task as it requires a lot of works, patience, discipline, and education. By completing the basic steps outlined in an above examples, you have a chance to make profitable results. Remember to treat your demo as if it is a real account so you can master your emotion well before actually jump in to a wild arena of the game. Good luck ...