Unless you’re some uber-genius who can predict what will happen in the next two minutes, chances are that you started your forex trading career with demo trading. There’s no shame starting with a demo account – it’s where all the pros first honed and developed the skills that made them mad moolah later down the road.
The problem starts when, after just a couple of months (or even just weeks) of demo trading, some traders start to slack off and not take it seriously. They think, “Why am I wasting my time on demo? I can learn this stuff with a live account! I gots to start making money!”
More often than not, these traders end up burning their first account, as they fail to develop the necessary skills, mindset, and discipline needed to successfully trade a live account.
Truth is, losing enthusiasm while trading demo is perfectly normal. It can be mentally taxing and boring when in the back of your head, you know that you’re not making any real money.
This is why I have come up with three exercises to help you take demo trading more seriously.
1. Feel the pain
One of the main reasons why some traders decide to jump the gun on live trading is because they no longer “feel the pain” when it comes to demo losses. Others feel that they are no longer progressing, as they know that it’s just fake money on the line. They no longer take it seriously, and they end up making bad trade decisions and/or not practicing good risk management techniques.
In the long run, this can be very damaging to a trader’s development.
One way to counter this is to put real-life penalties on your trading mistakes. Every time you don’t follow your trading plan, you can do 10 pushups, wash the dishes, or even deny yourself your usual second cup of coffee, just so you can feel the impact of your trading mistakes.
This is very similar to what professional athletes do to push themselves to get to the next level. A basketball player may run a sprint for every missed free throw, while a tennis player may do 100 pushups for every service error.
This will help ingrain the losses and mistakes into your mind, helping you focus and pay attention to the task at hand, which is to improve with each and every trade.
2. Treat it like an exam
Another good way to help you take your demo trading seriously is to treat it like it’s a “trader’s final exam.” After all, if other professionals like law students have their bar exams and potential drivers have their drivers’ tests, why can’t traders have a “traders’ test?”
Though there’s no official test in becoming a retail trader, a profitable demo account is a good indicator that you have the trading know-how to handle live trading.
3. Join a forex trading contest
The last, but definitely not the least option to make your demo trading more interesting is for you to join forex trading contests. Whether it’s being hosted by your broker, joining a trading competition can motivate even the least competitive trader.
Of course, just because some contests offer prize money it doesn’t mean that you should ditch your well-crafted trading plans and bet the farm on your trade ideas! You can join a forex trading contest, but you must make sure that you FOLLOW your trading plan AT ALL TIMES. Just because you can risk your whole account while trying to win the prize money doesn’t mean you should. Demo trading is all about building good habits and best practices; trading recklessly just to win the contest just ain’t worth it in the long run!