Transition from Demo Trading to Real Money Trading

There are a couple of issues to deal with when it comes to switching from a demo account to a real forex account. The most important is the ability to be able to read market signals and understand fundamental and technical analysis. You also have to constantly keep up to date with political and economic events and news. This gets even more complicated if you trade more than one currency pair. Then you have to be able to take these skills and recognize market signals to buy or sell a given currency pair. This skill can certainly be taught. However, there is a second issue that can make or break new traders. This is the issue of fear as well as greed.

Every day there are many new traders signing up for forex brokerage accounts in the hope of making their fortune with currency trading, all from the comfort of their home. Most brokerages let you open a demo account so you can practice trading without spending any of your money. You can get the same experience and excitement that you get with real forex trading and many traders are able to earn sizeable profits without too much effort. Continuing this same success on a real account often proves much more difficult. So, what is the reason for this since the trading is done on exactly the same platform? The markets are still behaving exactly the same way as they were on the demo version, but the trader is now allowing new factors such as greed and fear to affect their judgment.

Demo versions allow you to understand and learn why currency rates move and why the forex market reacts in certain ways to specific events. The only difference is that you have now stopped trading with pretend money and are using your own funds instead. When you trade with pretend money you have no fear of punting $60,000 to go long or short on certain currency pairs. Whether the trade nets you $2,000 or you lose $2,000, you never feel fear. You may feel some greed, but you never have to feel fear, as there is no possible chance you can lose your real money. The emotions of fear and greed are certainly never combined when you pretend trade currencies. You feel good when you make a winning trade and when you lose money, you calmly analyze the reason for the loss or even open a new demo account.

The successful transition from making winning demo trades to making winning live account trades depends a great deal on the psychology of the trader and how well they understand themselves. It is very easy to learn the skills of successful trading and to intellectually understand you have this skill. It is not so easy when real emotions are involved. Fear and greed are powerful motivators for good or bad and if you let yourself be ruled by your emotions you will never be one of the really successful traders.

You have to ask yourself if you have what it takes to remain emotionally detached to a certain extent when your own, or someone else`s, money is involved. When you truly analyze yourself and your capabilities under stress and come to terms with your limitations you may be able to make a successful transition to a live trading account. Successful traders are not without fear or greed, but they do not let those emotions rule their trades and they stick to the plans and objectives they have set for themselves. Anyone wishing to trade forex has many brokerages to choose from and they will guide you.

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