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5 Questions to Ask Before Opening a Live Trading Account

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Demo trading is part of the process of becoming a consistently profitable forex trader.

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.

forex experimentMost 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 checklist, where your answer to each question MUST be an unequivocal, resounding, and decisive “YES!”

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

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 in helping your account survive.

2. Have you experimented with trading different styles yet?

There are so many trading styles and forex 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. It’s important to understand all your options and find the method you’re most comfortable with before going live.

3. 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. 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 forex trade after another.

Make sure you’re consistently making pips on demo before you hit up your broker for a live account.

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

This is something that many forex 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:

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

Without a solid forex trading plan and process in place, your account is doomed from the very start.

You need 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 forex 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 forex trading. Don’t hesitate to share your experience!

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About Dr. Pipslow
If you can't keep your emotions in check when trading, you will lose money. Lots of it. The most significant action that you can do to improve trading profits is to work on yourself. Really knowing yourself and how you think can give you an edge that others in the market don't have. My goal is to share practical advice to improve your forex psychology without boring you to death. Hopefully, you can develop the mental edge you need to become the best trader you can be.

Someone's sitting in the shade today because someone planted a tree a long time ago.Warren Buffett