Retail investors are in a great position to take advantage of new innovations in tradin technology. In the past if you had to learn the basics of trading you had to go to the broker office and learn how the currency market works. Technology has revolutionized the way trading is done. With demo trading, you can actually experience and learn trading. If you want to be a good trader, you should first trade virtually. You will lose this game if you take the plunge directly with real money.

Benefits of Demo Trading

Demo trading allows you to get familiar with the trading environment. Things like how to place order, how to put a stop loss, closing the trade etc can be learned without a penny. If you want to test a new trading strategy, you can do so with the demo account. Even experienced traders use demo account to test the new trading strategy first. You will save a lot of pain if you trade with demo account first.

Open a Micro Account

Now that you have traded virtually with a demo account for sometime, you must be itching to trade live. There are few things you need to know before you put the money in your account. Demo trading is a must thing. But trading live is completely from demo trading. Emotions can come into play if you lose money on some trades. You can work on controlling the emotional decisions. Before opening a real account with the full amount, you can open a micro account with a very small amount say $ 200. Almost all the brokers allow you to trade with a small account. By trading with a small account, you will get acquainted with the emotional aspects of trading real money. This way you ensure that you don’t lose much if do wrong. But make sure that you don’t expect to turn $ 200 account into a million dollar account within a year.

Fund Half the Amount

Once you trade with the micro account successfully, you can open a real account. Fund your account with half the money you intend to invest. This way you don’t risk much if you commit mistakes. At this stage you are still a beginner. It will take time before you can make a living out of trading. If you do well in this phase of trading and also in previous phase of trading micro account, it will boost your confidence tremendously.

Trade with Full Amount

If you trade successfully for 3 months and make profits with half the money, then it is time to get in with the full force and put all the money you decided initially. If you don’t do well in trading live and lost 10% of the account, it is time to stop and go back to the demo account again. This is difficult decision as most people can’t admit their failure. They end up blowing the account completely. You don’t want to do that mistake. Do you?

It is long process till you become a successful trader. Only those who are willing to stay in for a long haul win in this game. You will already be in the top 10% if you understand this fact. With meticulous effort of improving your skills as a trader will make your dream of making serious money come true.

End up being a good trader and get acquainted with exactly what how to day trade is all about. You can also improve your trading efficiency by checking out Ava FX review.

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Filed under: Currency Trading

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