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Differences that Matter: Demo vs Live Forex Account
August 2, 2018

In the last article,  we spoke about becoming a full-time trader and if you really have what it takes to be one. One of the points we had mentioned in the article was about how trading on a demo account is different from a live Forex account in terms of capital requirement. However, we had not mentioned the differences between these types of accounts in terms of trading psychology. Let’s see:

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It will be haywire if we say that you need to control all your emotions while you’re in front of your trading screen, even though it is the sane thing to do. Once you can manage your emotions well, it will definitely help you become an actual professional trader.

On the other hand, it is a piece of cake to stay emotionless on the virtual or demo account since you trade in a risk-free environment. When it comes to trading your real money, emotions play an intoxicating role which takes a heavy toll on your portfolio.

Building Risk management skills

When it comes to a demo account, you don’t have any liquidity issues. In about 5 minutes, your account receives $ 15,000 for trading.  As everything moves so easily, you don’t care about your trade sizes. Until you are hit by the markets and you start loosing.

The issue here is, in case of a live Forex account, you can not hit restart and begin over. This is the reason why you SHOULD practice risk management skills even while you are trading on a demo account. This will give you a notch above the others.

Things get crucial when the real money strikes. By changing your mental outlook and psychology, you can treat your demo account more like a live trading account.

You should build the habits of a professional trader, i.e. you need to be consistent, disciplined and focus on cutting your losses.  Keep an eye on the market at all time, build a simple yet strong profitable strategy and never get lazy.

Just like a pro, you should at all times practice your risk management skills. Straighten out your stop loss and seize profit orders. Never ever risk more than 1% of your total capital in a single trade.

Take control of your financial future

For the past 11 years, Professional Traders Club has been helping people like you learn and reach their financial goals. Register for our free trial class to see how financial markets can change your future. Don’t worry, we don’t bug people with our sales pitch. If you’re really looking forward to learning something new, we encourage you to attend these classes!

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