Transitioning From Demo to Live Trading

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Transitioning From Demo to Live Trading

You spent hours, days and perhaps weeks practicing on a demo account to experience the basics of trading minus the added pressure of losing money. They say practice makes perfect, and this is true in many ways. Yet nothing truly emulates the ups and downs of real life trading and the stress that comes along with it. Even if you have honed your skills and mastered the platforms’ features to reach a high success rate on demo, it does not guarantee your live trading success. In fact, many newcomers realize that their demo profits soon turned to losses when they transitioned to live day trading. Rest assured, this is normal! Traders going through the transition period should be aware of a few things and know they are not alone. You will find your way to winnings once again!

Unexpected Pressure

When using a demo account, you know your hard earned money is not on the line. Therefore, there is a part of you that remains at ease, knowing that no matter the outcome of a trade, it wont impact your finances. This is definitely a good start and great way to practice trading and become familiar with the technology at hand. It’s really more about getting comfortable with the trading platform settings, the strategies, and process. But a demo account does not prepare you for the reality of loss. Indeed, trading with your own money can unhinge you and set you up for unexpected emotions, and reckless decision making. You will learn to navigate these muddy waters and control your ego, fear, and stress. It is a bumpy period. But persevering through adversity is the only way to becoming a successful trader.

Being a successful live trader entails embracing losing trades. Once you accept this reality, you can control your fear and operate according to sound risk management techniques. One way to deal with this psychological factor is to start trading live with small positions. Thus you can train your mind to accept a small loss if it occurs.  Then slowly increase your positions as you become more confident.

The Reality of Volatile Markets

Your transition from demo to live trading may be tougher if your practice time was short. As real market conditions continuously change, spending a couple of weeks in a demo account means you haven’t experiences a wide range of situations. Therefore you might tend to focus too much on the strategies you applied in your brief demo days while the market conditions require another style of trading you haven’t tried. If the markets show you something you are unprepared for, it may affect your stress level and confidence. The best way to counter this gap is to ensure you’ve prepared yourself for all types of market conditions.

Final Thoughts

When you upgrade from a demo to a live account, you may not expect any challenges. So it’s good to have in place a solid plan for all market conditions and the result of your experiments on demo. A good advice is to never stop learning, stay updated, and master risk management techniques. Many traders, regardless of their seniority in the world of finance, keep a trading journal to monitor their performance, keep their emotions in check, and have something to go back to when in doubt. Finally, always keep your personal objectives in sight and put things into perspectives: every successful trader out there has a few failed trades in his pocket.

Masari Capital provides traders with the necessary tools and features to trade effectively and consistently. If you are ready to begin the journey and prove to yourself that trading is your optimal career path, then join our leading financial platform Masari Capital– a gateway to simple trading today.