Many forex traders complain about their trading results on a live account compared to when they trade on a demo account. Most of them are easier to profit on a demo account than when using real money.
They suspect that it is a trick of forex brokers or brokerage companies to manipulate their funds when they have actually entered a real account by changing servers, slowing order execution and so on. Some even have the opinion that when they enter a real account, market conditions suddenly turn unfriendly.
Psychologically, our minds tend to be more relaxed and flexible when trading on a demo account, so that we can be more open and objective in responding to market conditions.
On the other hand, we tend to be tense and anxious when using real money in a live account. In metaphysics, a relaxed brain wave is more able to think logically, while a tense mind tends to use simple and primitive ways that rely on instinct and are more emotional.
Reality When Trading With Real Money
The first fact is that the market doesn't care and never knows our account, whether it's a live or demo account, whether our balance is increasing or decreasing. The market will stay that way, up and down, trending and sideways.
If we lose in trading, we shouldn't blame the market, but because of our wrong way of responding to market conditions, maybe we are less objective and try to control the market with excessive predictions.
The second fact is that when trading on a real account we do not focus on the trading process, but rather focus on the amount of profit or loss that we have and will earn.
Even though we have made a trading plan and implemented the exact same strategy and money management as on the demo account, we don't always do what we should do.
The risk we set will greatly affect our emotions. We feel unprepared when our funds suddenly disappear quickly. People's behavior can change when it comes to real money.While on a demo account, maybe you can be disciplined in carrying out a trading plan, but it's your turn to jump into a real account, you get emotional and always intervene in your trading position. You tend to ignore trading plans until the trading process goes awry.
That's the reality especially if it's your first time opening a real account and trading with funds that you didn't allocate for forex trading or funds that are "ready to lose".
So, how to take advantage of the Demo account?
In forex trading forums, courses or seminars and webinars about forex trading are always recommended and even required to trade on a demo account for a certain period of time before opening a live account.
Forex brokerage companies always provide a place to open a demo account even with a separate server from the live account. A demo account is really needed, especially for beginners to explore trading methods and test trading strategies, so that when we trade on a demo account we can control our emotions so that we are not really one hundred percent involved.
Regardless of the benefits of the trading methods or strategies that we have learned, or a separate demo broker server so that the demo account is always smooth in order execution, the main benefit of trading on a demo account is to train not to involve our emotions in trading.
We must treat the demo account as if it were a real account. That's the most realistic way of not involving emotions in trading, and that's the main benefit of a demo account. Trade on a demo account for as long as possible before opening a real account. Make sure first that you can trade without emotion.
Some Tips for Trading on Real Accounts
If you feel you can trade without emotion on a demo account, but when you have opened a real account you can find it a bit difficult to adjust because of the real risk factor of losing money. Maybe the following tips can help you to reduce the feeling of tension or anxiety when trading on a real account:
1. Use the funds that you have allocated for forex trading or funds that are 'ready to lose'. Never use funds for daily living expenses. Forex trading is a business and consider it your business capital.
2. You need to accept the fact that you are very likely to lose in trading, and be prepared for it.
3. Make sure the amount of risk that can make you comfortable every time you open a trading position. Always ask yourself whether you are comfortable enough with the percentage risk for the position.
4. Know that the measure of success in forex trading is not the result of one or two market entry, but the accumulation of trading results over the long term. So stick to your proven trading plan in a demo account.
0 Response to "Trading on Demo Account VS Real account what's the difference? | FOREIGN EXCHANGE"
Post a Comment