In another post in the series about forex demo accounts, a serious question is: when to go live? When do you leave the practice account behind, and put real money in forex? I’ve already written that a demo account isn’t only for newbies, so the answer depends…
If you’re a seasoned forex trader, you’re probably trying out the new broker with a demo account. Also for you, it’s important to learn the software, get acquainted with it and especially get to “feel” the broker.
In an industry that has more than bucket shop and some indecent people, feeling comfortable with the broker is essential before depositing money into a real account. But since you already have plenty of trading experience, this process should take no more than one week. Some will settle for one day.
If you’re not a newbie, but this is only the second forex broker you’re with, a little more time might be necessary. You can easily fill in two weeks with getting used to the software. Since you’re used to only one broker, moving to a second one might feel like a big change.
For new forex traders
If you’re a newcomer in forex trading, starting with a demo account is a must. Apart from getting used to the software and feeling the broker, you have lots to learn about ways to trade.
The best thing you can learn with a forex demo account is technical analysis. Since you perform the technical analysis before making a trade, the psychological difference is relatively small. I would recommend between one and a half to two weeks for this stage, depending on how well you do. It’s important to feel stable at this stage.
Basic forex trading has other aspects as well. Another rather useful thing is using a forex demo account for learning money management. Despite not risking real money, you can adopt good habits for money management. You might not be that strict with yourself when moving into a real account, but it will still be in your mind. Many forex traders don’t do any money management, and it sometimes burns them out quickly. A week to a week and a half of focus on money management should work.
The third aspect is in-trade psychology. This is quite hard to learn when practicing. Still, there are some things you can do to help you stay in control when opening a position in a real account. Read more about using a forex demo account for in-trade psychology. Since this stage isn’t so efficient, one week is more than enough.
All in all, the general recommendation is between three to five weeks of practicing on a demo account before going live. These are general guidelines. Everyone has their own pace. Some will feel confident enough in a week, while others will be cautious and take two months or more before putting money inside.
Forex trading isn’t easy as some companies may suggest. Take your time practicing before going live.
For more on this subject, check out the page that concentrates everything about a forex demo account.Get the 5 most predictable currency pairs