Forex trading nowadays is one of the most popular businesses around the world. It used to be an opportunity only for big financial institutions. However, because of technological advancement, it has become possible for the retail traders to trade in the market and make money out of it. What really significant is there is a number of retail traders who have made their fortune by Forex trading. Any trader could be one of them even if he does not know anything about trading or does not have a huge investment to employ in the market. To make this happen, there are steps that a trader needs to follow from the very beginning. One of the steps is trading on the demo account and getting well acquainted with what trading is all about without losing real money.
In reality, the importance of trading on a demo account is often ignored. This fact not only makes traders lose real money but also makes them become demotivated as far as trading is concerned. I have come across a few traders who do not trade anymore. In fact, they hate Forex because they lost a lot of money. One thing I have found common in them is that they did not trade on the demo account as much as they should have done.
Many traders complain that they do not get the real heat on the demo account. This is true. Demo trading cannot be exactly the same thing as live trading. However, demo trading has to be done in the way as if we are trading on a live account. Only then a trader will learn from it. Balance, Trading lot, Time Frame, Trade Management have to be maintained without keeping in mind that it is a demo account. Trust me you if a trader does not feel the heat by trading a demo account; he will not feel the heat by live trading too. He gets burnt straight away. Thus, while trading on a demo account, a trader must assume that he is trading on a live account.
A question may be raised that how long a trader has to trade on a demo account. It depends of course, but on an average, a trader should trade on demo account at least for six months. By trading on a demo account for six months, a trader gets oriented with things such as volatility, trading sessions, chart patterns, risk management, trade management etc. Another thing will he surely develop which is patience. Patience is the key to be successful in trading. This means if a trader can stick with demo trading for six months, he passes the first exam. In fact, this is the hardest exam that a trader needs to pass.
If you are about to start Forex trading or just have started, you know what to do now. Yes, go and get a demo trading platform downloaded on your trading station. Start demo trading and evaluate your performance after every month. Most probably you will lose 2/3 demo accounts in the first month. Do not fool yourself by saying that I was not serious or I could have done this or that. Until you don’t make money consistently on a demo account, you will not be able to make money on a live account as well. In fact, making money on a live account is even tougher than making money on a demo account because of the higher spreads. Do not get disappointed though. Work hard with patience on demo trading. You will surely make it.