How to Tell If You are Ready for Live Forex Trading

After getting several wins on the demo account, you may think it’s time to start live forex trading. Read on to determine if you are truly ready.

Trading with a demo account for a few weeks can make you feel competent enough to start real trading. This is not always the case and you need to make sure you really are prepared. Considering that you will be risking real cash here, it is important to be certain you are prepared to go live.

You have been making profits consistently

In forex trading, recording a consistent profit is not synonymous with winning every time you trade. In fact, experienced traders will tell you that they have lost some of their trades during their career. Considering the various factors affecting the live forex trading market and the high liquidity, losing is quite normal. As such, if you lose two out of all the trades you have made in a given week, don’t waste your time cursing the day and feeling sorry for yourself.

Instead, you must focus on building and refining your skills and gather setups with high probabilities. At the same time, develop strategies that allow you to take advantage of attractive reward-to-risk ratio so that you can reap higher profits and cut your exposure to high risks. When you are still trading with your demo account, it is important to keep a record of your profits in any given month. When you do this, it is easy to know if you are still on the right path as well as spot areas that need improvement.

You have risk management strategies that are easy to work with on a live forex trading account

Experts reiterate that half of your total success trading forex is dependent on your propensity to get a great setup. The remaining half is determined by outstanding risk management. As such, it is imperative that you have a well-laid set of rules stipulating the risk management.

At times, the markets can exhibit a wild behavior and you can easily be stricken by doubt and question your analysis and trading strategies. These are trying times on your mental strength and having a risk mitigation system can save you from losing the entire investment. Before you start to set up a live forex trading account, it is critical to ensure that you have put in place a set of rules that will prevent you from overtrading or losing too much of your capital.  

Otherwise, your live account won’t be there for long and you will be back to square one. If you haven’t started, make sure you have included the maximum percentage of risk you can comfortably handle as well as the longest streak of losses that is acceptable.

You are content with the broker and quite comfortable to use the platform

Prior to opening a live forex trading account, it is of utmost importance to make sure that you have a deep understanding of the trading platform. Basically, it can be quite disheartening to discover that you are not conversant with important tasks like exiting trades just when you desperately need to hit stop.

In addition, you need to understand the broker’s spillage as well as pip spreads since these are quite important when you want to set the orders. As such, you should use a demo account provided by a broker you intend to open a live forex trading account. Since you are putting the money in the hands of the broker, it is good to make sure you are comfortable with support offered.