In order to become a successful forex trader, one requires doing a lot of practice to become familiar with the art of trading forex. For this reason, different online trading platforms offer new traders the chance to learn the trade without risking their money.
With a demo account, you can try out different forex trading strategies and learn your strengths and weaknesses as well as finding your most ideal platform to trade in. You can fine-tune different strategies to make them work for your style of trade. All this prepares you for trading in a live account.
The goal of demo account trading
Unlike live trading, the goal of a demo account is not to make money. Your goal when using a demo account should be to familiarize yourself with trading and create a trading regimen formula that works for you.
When you start trading in a demo account, you need to create a plan and stick to it. Use the plan a few times as you assess whether or not it is working for you. If a certain plan does not work, you can try another plan until you find something that works for your trading.
The good thing about a demo account is that you can work on your trading discipline without risking your money. The more you trade in a demo account, the better you become at it and this gives you the discipline you need to survive in a live account when the time comes.
Therefore, use your Rakuten demo account as a playing ground where you get to harness your trading skills in a no-risk environment.
Use the demo account to mirror your trading circumstances
After some time trading in a demo account, you will eventually have to switch to a live trading account. In a live account, you use your money to make real money. To ensure that the strategies you practice in a demo account work for you, you need to make the experience as real as possible.
The first thing you can do is treat the money you trade in a demo account as though it was real money. If there are certain strategies you wouldn’t try out with your real money, you shouldn’t try them with your demo account. This is how you nurture trading discipline.
If you plan to start trading in a live account with a $10,000 deposit, you should also start trading in your demo account with the same deposit. Avoid the temptation of trading large amounts of money in your demo account if you will not trade the same amount in a live account. This is because having a large deposit on your demo does not prepare you adequately for your real money scenario.
Another way to mirror your circumstances in your Rakuten demo account is to ensure you play with the same software you will play with when trading live. Part of the reason you use a demo account before a live account is to become familiar with the trading platform and also your broker. Never use a demo account on an unknown platform.
The difference between live trading and demo trading
It is important for you to understand that demo accounts usually have a favorable trading condition and thus may pull in a lot of money. These circumstances may not reflect on your live trading account.
It is normal to become nervous while trading with a live account or wondering is trading legal in South Africa. However, you do not get nervous when trading a demo account. This is because your mind already knows that a demo account does not risk your real money while live trading does.
You need to train your mind to be calm because fear causes you to make the wrong market moves which will cost you money.
Any trade expert will tell you that the best way to learn forex trading is by using a demo account the same way you would use a live account. Train on the trading platform software and mirror your circumstances as much as possible. Stick to a plan that works to ensure you make the most from forex trading.
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