Unlike the stock market, thanks to forex, it allows you to open a demo account for free to trade in forex. Some newbies become too excited after making a few bucks on the demo account and open a real account. They started to lose money and soon lost their investment capital. Before you consider yourself to trade the forex market, you need to practice in demo account. But how long will you practice in demos?
The general time period for demo trading: This answer is very hard to give in a one-word reply. In fact, practicing in demo account sometimes takes years. Yes, you have read it right. It will take you years and you will find that you are often placing a wrong trade and losing money. Be grateful for your demo trading account since offering you a virtual dollar to learn the art of trading.
Practice until you make your own winning recipe
Do not get worried if you lose money on your demo account even after you have built a solid plan or strategy. In fact, if you have a solid rule, losing money in the demo account will not have an impact on your profit. Let’s consider an example how rules can bring you money even if you lose trades than winning.
Let’s say, you place 10 trades a day and you have the rule to stop loss at one dollar and stop profit in 3 dollars. If 7 out of your 10 trades have lost, because of your stop loss, you only lost 7 dollars. But 3 of your trades have won money and they have brought you 9 dollars. Your profit, at the end of the day, is 2 dollars. Though you have lost 7 trades and won only 3 trades, you have to make the profit for your ground rule. It is the miracle of solid rules. You need to have a rule that can do a miracle. Demo trading account is the key to your miracle making rules.
Losing trades are inevitable: There are some novice traders in the financial market who often try to avoid the losing trades in the market. But if you trade the financial instrument than no matter which trading strategy you use in the forex market you will always have some losing trades. Even the most professional traders in the financial market have few consecutive losses in their portfolio very often. In order to become a profitable trader, you need to make sure that you winners are bigger than you losers.
Conclusion: You need to practice in a demo account before you establish a solid rule like this. If you make only a few bucks and become happy, forex trading is not for you. Until you have established your own winning strategy, do not trade with real account and real money. In order become a profitable trader you need consider forex trading as your business and need to learn how to run your business properly.
