By Dragan Lukic
Once you decide to become a Forex trader the number one notion in your mind should be to devise Forex trading strategies that work and suit your personality. In fact, it is more common to devise only one strategy and stick to it until it becomes second nature. Whether you wish to simply stick to that one strategy or devise others, it is completely up to you, but before you release it into the live markets it needs to be developed and confirmed. This is where demo trading comes in.
Broker demo accounts
Every good broker allows access to a demo account. Whilst it is a sales technique for them, it is an opportunity for you do start developing the very thing that will generate success in the markets. Some demo accounts may have an expiration date while some have a life-long shelf life so make sure that you check this before signing up. Demo accounts vary from the brokers own software to more popular software such as MT4 or MT5. Whatever the software is, it is the same as the live platform you will eventually use.
Once your Forex training begins and you have a few Forex trading strategies in mind, it is time to start. Make sure that you firstly familiarise yourself with the software itself first making sure that you know about every attribute you will use such as drawing of trend lines or installing indicators. Once this is done, start trading your strategy with the notion that it is not bullet proof. Every time you make a trade, take notes of why you think it did so. Every time a trade fails, take note and devise alterations that will make it more successful next time. The key here is patience and your ability to read your own work in a critical manner in order to devise the perfect formula for the live market.
When you trade in live markets one of the most important characteristics you should have is confidence in your own Forex strategies – there are a few others but during your initial Forex training this is the one to master first. If you do not believe in your work, nobody else will. Once you have enough wins under your belt and a solid trading record this ‘confidence’ will come naturally. These are the first signs that say you are ready to trade live markets.
To summarise, if you wish to minimise your risk it is crucial that you begin with a demo account. Some people find this hard because they want to start making money straight away but little to their knowledge they have become gamblers. If you don’t want to gamble your money or rely on luck it is imperative you practice first until you are ready (no matter how long it takes) and benefit later.