We here are Babypips.com are big fans of demo trading before risking real money on the line.
Problem is, lots of traders slack off after a while. They question why they should even waste their time on demo trading when they can “speed up” the learning curve by going live already.
But demo trading is IMPORTANT to trading skill development.
It not only familiarizes you with a trading platform and the mechanics of placing and exiting trades, but it also protects your hard-earned moolah when you’re just starting to develop your trading skills.
This is why I’m sharing three exercises that might help when you find yourself losing enthusiasm for your demo trades:
Put real-life “penalties” on your trading mistakesWhen you no longer “feel the pain” when you take demo losses, you lose the motivation to stick to a trading plan.
You end up making poor trading decisions and very likely build bad trading habits. To counter this, I suggest putting real-life “penalties” on your trading mistakes.
Didn’t move your stop loss like you said you would? Clean that stack of dirty dishes! Gave in to FOMO and entered a trade without a plan? You don’t deserve that delicious slice of cake for lunch!
Just like athletes can gauge their progress by measuring their speed, time, and reps during training, you can also start giving yourself “grades” to quantify your demo performance.
For example, you can give yourself a rating of 0 through 10 (0 being the lowest) using the following:
- Adherence to entry rules
- Adherence to exit rules
- Adherence to risk management rules
- Amount of missed trades
- Amount of taken trades
These are just examples though, and you can customize the questions depending on the rules of your trading system.
Share your trade ideas
Sharing your demo trade ideas with a trading community is a good way to make sure that you’re still taking your best ideas each time.
Not only that but sharing ideas with other traders will also help you refine your trading processes AND get you to talk to living beings other than your cat and your plants!
Just remember, though, that there can be some haters here and there, but you shouldn’t let this stop you from trying better each time and improving your strategies.