can be extremely difficult if you don’t know how to trade the market properly.
The forex market is a dynamic market and its gives profit to perfect traders in
the world. If you are thinking to start your trading career only to make some
quick bucks in the market than trading is not the right job for you. The
professional traders have spent month’s years after years to master their
trading strategy in the financial world. So if you are thinking that you will
get rich quick without having a prior knowledge of the financial industry then
you are completely wrong. Most of the rookie traders fail to make money in the
online trading world since they start their trading career based on false
confidence. Every single movement in the market can be interpreted with
rational logic. As a trader, you need to find a rational logic behind every
single trade in the market. You need to develop a strong trading foundation
before you start trading with real money. If you follow proper method then you
never have to lose a single penny at the end of the month since your trading
system will ensure your profit in the longer time frame. Let’s discuss how we
can master the art of forex trading without losing real money.
Three major types of analysis: There are three types of major
analysis in the forex market. Most of the professional trader uses the
technical analysis to execute their trade in the market. But in order to
execute the perfect trade in the market, you need to assess the market based on
three major types of analysis. Once the technical analysis is done then you
should go for the fundamental analysis in the forex market. Fundamental
analysis is the study of the economic performance of the country and it helps
the traders to get a general overview of a certain currency strength. Last but
not the least in the sentiment analysis. After all three types of analysis, you
should execute orders in the market with proper risk management factors. If you
are a new trader then you should open a demo trading account and trade the live
market based on this three types of analysis. Never let your emotions to take
any trade in the market. The moment you start trading with emotion is the very
moment you will start losing your trading capital. So make sure that you demo
trade the market for at least three months before you go live and if you do so
you will be able to gather huge knowledge in the financial industry without
losing any real money.
Know your trading environment: The forex market is extremely volatile
and it exhibits different movement at different times. Most of the time it
becomes extremely volatile during the event of the major news release in the
market. So if you don’t have any prior experience in news trading then you can
open a demo trading account and trade the news with your virtual
dollar. This will allow you to adapt the extremely volatile conditions of the
market without risking your own trading fund. Most of the novice traders incur
heavy losses during the event of the major news release in the market since
they totally don’t know about the market behaviors. As a full-time professional
trader, you need to know about your trade execution speed and leverage so that
you can scale your lot size under different market conditions to reduce the
risk in the market. And always make sure that you are trading with no dealing
desk brokers and all your orders should be directly executed in the market
because if you don’t do so then very often you will have high slippage even
during low volatile market conditions.
Find the perfect leverage for your
Leverage can be double edge sword in the market. Most of the novice traders
think that high leverage will make them rich in the forex market. But in
reality, leverage can be extremely dangerous if used in the hands of untrained
professional. So before you start trading with real money make sure that you
open a demo trading account and understand how the leverage system works.
Leverage plays a crucial role in the in controlling the trader sentiment. If
you think that you are an aggressive trader then you need to trade the market
with low leverage but if you think that you can manage you risk very
efficiently and take a trade with proper risk management factor than high
leverage will help you in a diverse way. In the eyes of trained professional
leverage is the most dangerous thing in the trading world since it directly
impacts your potential earnings in the market. So you should try to trade the
market with different leverage and find the best leverage for you. You might be
thinking that you can control your emotions even after taking high leverage but
when it comes to real life trading it’s really hard to control your emotions in
the extremely leveraged trading account.
Summary, Forex is just like any other business
in the world. In order to make consistent profit in forex trading, you need to
have a valid trading strategy and you need to learn how to control your
emotions in the market. As a full-time professional trader, you must know your
trading environment very precisely and manage your trade under extreme market
conditions with proper risk management factors. And always make sure that you execute
your trading orders in the market based on major three types of analysis in the
Greetings, I believe the Demo Account is helpful just for mastering the strategy (entry, exits, position sizing and managing the trade). In order to achieve complete control over your trades and account Live account is needed (even a small would be better then Demo).
Bottom line: Just demo would not be enough. Cannot reach professional level of trading just via demo.
I do agree that the Demo account could help you to become well acquainted with the environment, to know the trend to see how the leverage work, but it could not make u professional. As FrancoisT sais – it won’t be enough. Plus, most of the demos are without slippage when the order is executed and that may not show the reflect of the real market.
Certainly when you have no experience at all trading on Demo is a good foundation. But as you guys have said it is not enough in order to become a successful professional trader. Demo does not provide the same conditions as the Live account such as prices, stop out level, order execution, therefore no emotions are involved.