5 Questions You Should Ask Yourself Before Trading Live

Demo trading is all part of the process of becoming consistently, profitable traders. It’s there to help us become the traders we want to be without risking a dime. It’s there to help practice proper discipline and strict risk management rules. Most importantly, demo trading helps provide the needed experience in different market environments for each trader to find his trading niche.

But how do you know when you’re ready to let go of the training wheels and start trading with real money? Here’s a nice little trading experience check list, where your answer to each question MUST be an unequivocal, resounding, and decisive “YES!”

Have you been trading on a regular basis for six months or longer?

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This is a very important question. The forex market is always changing, which means that a system that is working for you on demo may not work as well six months down the road. Having enough experience to gauge when market dynamics are changing is extremely important to helping your account survive.

Have you experimented with trading different styles?

Experiment There are so many trading styles and systems out there. Are you absolutely, positively sure you’ve found the right one for you? Make sure you’ve at least tried scalping, day trading, mechanical trading, etc. You’ll have to stick with a system during both the good and bad streaks, so it’s important to understand all of your options and find the method you are most comfortable with before going live.

Are your winning trades outweighing your losing trades over a long term?

If you haven’t been profitable during demo trading, then you probably shouldn’t be trading live. Tug-o-war Live trading is a completely different animal. Once you see that first extended losing streak with real money, emotional decisions may overtake rational ones, leading to one bad trade after another. Make sure you’re consistently making pips on demo before you hit up your broker for a live account.

Do you have a process for recording and reviewing your trades to improve performance?

Measurement This is something that many traders overlook, simply because they don’t have the time and/or discipline to maintain a journal. I guarantee that if you put in the time for recording and reviewing trades while on demo, your live trading will benefit immensely.

And this leads us the most important question of all,

Have you developed a trading plan and process that works for YOU?

DiscoveryWithout a solid trading plan and process in place, your account is doomed from the very start. You’re your own trading plan that will keep you in check and prevent you from taking haphazard trades.

If you are leaning more towards “No” or a feeble “I think so,” you may want to reconsider going live. If you’re already trading with a live account but you’re feeling the heat after a couple of losses here and there, maybe you should take a step back and reevaluate. After all, there’s no shame in staying in demo trading until you feel ready.

By the way, I wanna hear how long you were in demo and how you knew you were ready for live trading. Don’t hesitate to share your experience in the comment box below!

5 comments

  1. papi13

    great advices you are giving, iam on demo for the last 3 month, trying to learn as much as i can before to go onlive, i didnt thought un instant it will be so difficult to deal, its not a casino game, its a buisiness, a proffession and only learning , practising will make later a difference, so easy to think money its easy to make, no it is not easy if you dont bend for it, a lot of learning, hard work, patience, and luck, sometimes i beleived that buisiness its not for me, because so far no positif result, i gat sometimes tired of it but when i read you advice i feel iam just in the continuation of normality episodes i will keep trying because you always answer all my wondering, keep that good work for me and others of course the frenchie

    Reply
  2. Michael Stone

    very nice set of questions, certainly all worth consideration before transitioning from demo, even if your just moving on to a micro account. Another that is good to ask yourself when you begin and again when you have been tradign live for a few months, is ‘What are my experctations for the next 12 months’. Its amazing how much the answer to this question changes as your journey evolves.

    Reply
  3. Pingback: Forex: What You Should Ask Yourself Before Every Trade - Forex Grapevine

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