From a demo account to real account trading

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Moving to trading on a real account is the goal of all novice traders. If you read this page, you’ll discover the importance of a demo account for learning how to trade. The differences between a demo account and a real account are important. But when do you know that you are ready to switch from demo account to trading on a real account?

Questions to ask before switching from demo account to real account trading


Am I able to generate earnings on a regular basis?

: Having a positive demo account is not enough to justify switching to live account trading. It all depends on how.If you've just carried out a few trades and your trading account is positive, you're not ready for the real thing. To switch to real trading, you must be able to generate regular profits over a long period (at least several weeks). This does not mean that your demo account should only rise, but you should have an upward performance curve at the end of your test period.


Do I apply money management?

: If you don't know what that is, immediately forget about real account trading. Good risk management is as valuable as a good trading strategy. Money management limits damage during loss phases (which are an integral part of trading). This implies appropriate position sizes and therefore realistic performance targets. If you see trading as a way to make a fortune, make money quickly or double your capital, then you have understood nothing about trading. It would be easier to go to the casino.


What is my trading strategy?

: A trading strategy is a kind of checklist that you must apply for each trade. You should only take a position in the market if your trading strategy gives you a clear signal. A position should never be based on your market sentiment! If all your positions on your demo account are part of your trading plan, you can switch to live account trading. If you still have parasitic positions (out of strategy), you must absolutely eliminate them completely. On a real account, this kind of position usually does a lot of damage. The question to ask yourself to know if you follow a trading strategy well is: "Are you able to explain objectively the reasons for each of your positions?”

When I say trading strategy, I mean yours, not a trading strategy that you copied from another trader. Every trader is different because of his trading preferences and his psychology. So you need to find the strategy that fits your investor profile. With time and practice, you will evolve this trading strategy on your demo and real account based on your financial market experience.


On what time units do I process?

: Having a strategy is good, but you need to know on which time unit to apply it. Choosing a time unit in trading depends on the time you have available and also according to trading preferences. Short-term trading is often much more stressful than long-term trading.


Am I sure of myself?

: If you have any doubts about your trading strategy, if you don't feel ready to switch to a real account, then stay a bit longer on the demo account. To move into reality, you have to have confidence in your strategy. It will allow you not to question it with each series of losing trades on a real account. You must also feel capable of managing any market situation. For example, what do you do in the event of an explosion of volatility (when a news item is published) on the financial markets? Do you still trade, or do you stop trading until things calm down? Your demo account experience should allow you to answer this type of question.


Do I accept loss?

: Losing is part of trading. If you do not accept losing, you cannot win in trading. You must be able to put your ego aside and not lose your temper if a trade is losing, never move your stop loss if the price moves in an unfavourable direction, accept that it is the market that has the last word. The best analysis in the world does not guarantee a winning trade. In technical analysis, you establish scenarios and you favour the one that has the highest probability of coming to fruition. If a trade loses, it's not that you're a bad trader, it's just that the market didn't prove you right. It'll happen almost every day. It shouldn't make you change your trading strategy.

The differences between a demo account and a real account

The advantages of a demo account are numerous but answering all these questions does not guarantee that you will be a winner in your real account trading. A demo account is a way to learn rigour and discipline in trading, these are two basic qualities to succeed in the financial markets. They allow you to manage your risk well but also to apply your trading strategy to the letter.

People who are not rigorous and disciplined in life will take longer before they are ready to switch to real account trading. On the other hand, in reality, it is often those who are the first to trade on a real account. It inevitably ends in the total loss of invested capital. A demo account is for practice, and without practice, it's impossible to be good at trading. It's the same in life.

But then why is demo account trading so different from real account trading? For the one and only reason: there's your money at stake. On a demo account, you have nothing to gain or lose. It is therefore easier to be objective in your positions, more rational. Indeed, money exacerbates emotions. Emotions are at the root of the majority of trading losses among individual traders.

Risk Management

With financial markets, you always have the impression that you can make money quickly and effortlessly. It stokes the lure of profit. This greed pushes traders to take additional risks, risks they would not have taken on a demo account. As a result, traders no longer apply the money management rules they learned on the demo account. All you need is a trade with strong leverage or no stop loss to enter the infernal spiral that will inevitably lead to the loss of your capital.

Conversely, trading on a real account will reinforce your refusal to accept a loss. It is for this reason that many traders do not place a stop loss or move the stop to avoid it being hit on a real account. We can never repeat it enough, it is impossible to win on the financial markets if you do not accept loosing.

Trading strategy

Following a trading strategy to the letter on a demo account is easy. But continuing to apply your trading strategy after a losing streak of trades is more complicated. That's why you should test your trading strategy at length on a demo account. It allows you not to question it and to be confident in its ability to make up your losses on a real trading account. If your trading strategy is a winner, you have to tell yourself that a losing series of trades is just lost time but not your money.

This is difficult to conceive for novice traders, but trading is a financial investment. It involves risks, we must be aware of this but judge the relevance of the investment over the long term, not the short term. With real account trading, it's the same. It doesn't matter if you end a day or a week in negative. The important thing is that your trading account mounts, that you make your investment grow over the long term.


When should you switch from a demo account to real account trading? Only you can answer that. There are no specific rules. Each trader is different and will take more or less time to be ready. You should not neglect your learning phase on a demo account, it is an essential foundation to succeed in real life. You learn rigour and discipline. On a real account, the goal is to learn to manage your emotions. If you can control them and replicate your demo account behaviour in the real world, your chances of trading success are high.

Managing emotions is not an easy thing, it is what usually takes the most time. It is with experience that you will understand this. That's why it's not uncommon to raze your real trading account in its early days. I also went through this painful stage. So it is better not to deposit too much in the first place because the risk is high. Often the risk isn't the market, it's you! (See page: psychology: the trader's enemy). The sooner you are able to manage your emotions, the sooner you will win in your trading.

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