Starting with a demo account is one of the most strategic approaches to understand forex business as a newbie.
Yes, you were told that forex trading is a very profitable business, but before you succeed, there are risks in this business you have to consider carefully.
However, there are sure ways to plan an effective trading strategy. First, by understanding the forces behind the market, by developing an effective trading plan and also by knowing the way market operates through constant practice with the demo account.
You have to understand that the forex business is a very volatile business; market can change at any time, which deems it very important that you understand how it operates to a certain level– where you can confidently trade independently.
Are you worried on how important trading demo could be to you? Read more on the interview with an experience forex trader.
Have you also wondered why almost all brokers offer a free demo–account section? It’s because with it, you could easily practice and understand how the market operates.
Here are 4 killer reasons why it is advisable for new traders to start by trading demo instead of live account.
#1 For you to know what forex business Is all about.
As aforementioned, fx business is a very volatile business. You can make much profit within a short period of time and you can also lose much within a short period of time.
Still on demo trading, one of the main reasons why brokers designed this platform is because they knew that you need a lot of understanding before you invest fully on it.
This is why you have to make a good use of this platform to really know what forex is all about, and also how the market operates.
However, new traders have this common pitfall of seeing the fx as a simple market. Their perception of the fx business it this– just roll in with few dollars and roll out with thousands of dollars.
This perception is wrong. If this should really be the case, everyone will be competing to become the world richest.
The fx business is a very risky business. To be on a safer side, it is advisable that you start with the demo account until you are fully enlightened and confident to trade the live account. Don’t risk your money when you are not confident about trading
Surely, as an investor, you are here to make profit which is the more reason why you have to start this business by trading on the demo platform. Also to understand the ins and out of the market.
#2 For you to sharpen your skills on trading.
I totally agree with Mahatma Gandhi, when he said;
“Man often becomes what he believes himself to be. If I keep on saying to myself that I cannot do a certain thing, it is possible that I would end up by becoming really incapable of doing it. On the contrary, if I have this believe that I can do it, I shall surely acquire the capacity to do it even if I may not have it at the beginning”.
The demo platform is primarily designed for you to acquire, and also to sharpen your knowledge and trading skill.
Sincerely, it is very much advisable that you sharpen your trading skills because fx trading is very complicating. And it requires a lot of strategic approach to analyze it.
The fascinating part about sharpening your skill through trading demo is that you are not losing money; everything you are doing on a demo account is based on virtual money.
#3 For you to develop your own trading strategy.
Through demo trading, you could easily develop you own trading strategy. Just like I said earlier, it cost you zero money.
To develop your own trading strategy is very important because it defines your own way/style of tackling trades. (Read more on how to develop a trading plan)
In forex, it’s interesting to know that there are specific approaches towards developing a good and profitable trading strategy. Just like the saying goes, he who fails to plan, plans to fail.
Obviously, nobody wants to wait for many years to become a successful trader, even though they know that great achievement requires hard work.
It’s quite common that many traders are enticed by the achievement of making up to $xx,xxx in a day trade, by just following the strategies of successful trader. They practically roll with this mindset.
How many of these methods (or Fast-track) have you tested and it worked perfectly?
Do you know that a newbie trader made over $400 in 30 minutes? Something in your system changes immediately you heard it.
Curiosity starts burning inside you, how did he make it?
Another; make up to $1000 dollars a day, using our simple trading strategy.
Honestly, most of them are marketing approaches to lobby your money. My advice is this. Don’t subscribe to a software or robot or EA (Expert Advisor) that you are not sure about.
This is why you have to develop your own trading strategy and practice intensively till you are convinced about the method.
Always adjust with the market, for the market itself is full of uncertainties. Success depends on prolific probabilities.
Remember, what works for A might not work for B.
Why is it so?
Because, market itself is very volatile and it is full of uncertainties. Your focus should be on how to develop an excellent skill that will pour in money now and in years to come.
There is no sin in learning from professionals.
#4 You lose nothing.
Yes, demo trading cost you nothing. No real money is involved, which is the more reason why you are at no loss.
The money involved is usually tagged as virtual money by brokers. It is intriguing to know that you can trade demo as the real market. It really requires a lot of discipline. (Read more on how to trade demo as real account)
Advice: Always open a demo account with the amount you intend to invest into the fx business. Don’t always fall into the temptation of opening a $1000 demo account, when you know within yourself that your intended amount is just $100.
Hopefully, as a forex newbie, these reasons we’ve discussed above will enable you see why you have to start the fx business with demo trading.
NB: It’s important to know that it is not always easy at the beginning but as time goes on you will smile at your trades, if you play by the rules.
Always trade responsible.