Often times people judge themselves wrongly and rush into trading real money in forex. I had this naive assumption that, making some few pips on a demo account was enough to start trading on a live account. I was dead wrong and I crashed really hard. You, at one point in time had the same issue like most traders do.
So when is the right moment to actually put some real, hard-earned cash onto the table. Well, it’s definitely not when you’ve traded a demo account less than half a year. Yeah, this sounds boring. But too much adrenaline can kill you. When I started learning to trade forex, I knew I had to practice and practice and practice on a demo account but I had had enough after about 2 months. I had made lots of profits on my demo account within the first couple of months so I foolishly thought, “Oh, now I think I’m ready”. There’s one name for this – inexperience. And it costs a lot of money.
When you start new in the forex game, it’s good to have enough practice on a demo account. How much is enough? I would say 6-8 months of regular trading, everyday, till you start making consistent profits. Through these months, save all your cash for the game later when you’ve mastered a strategy or two. Half a year sounds like a long time staring at screens for no profit but will pay off later when you have taken time to test and learn about most indicators and picked out a few that suit your style and earns you money.
Knowing how to manage risks can’t go unmentioned here. I would say not to risk more than 2% of your total margin for each single order. Learn to use stop losses, know to take a break from trading after a losing streak then come back again. If you get to know and abide by simple risk management rules, then for sure you’re on your way to becoming a good winner.
Managing yourself emotionally also counts as a factor to reaching maturity in forex trading. In forex, it’s best to stay neutral emotionally. When you win, keep your cool, count it as if it’s nothing big and repeat the strategy again, being more careful each time you repeat the same thing. Likewise when you lose. If it affects you so bad, just take a break and bounce back. Forex is not for the faint-hearted and that’s why I always advise not to trade with more than you can afford to lose.
You should be able to tell if you’re happy with your broker and their services, how they respond to clients and if you’re comfortable at all with their trading platform. I trade on MT4 and I know it very well. You should make sure you’re happy with and understand your platform.
It takes some time and dedication, humility, passion and austerity to be a good trader. Don’t call yourself a mature trader if you lack any of the above points. It’s after these that you can tell you’re ready to go pro.