Just my 0.02…
First, you HAVE to understand that when trading spot/cash FX you are trading in the wild wild west. It is unregulated and you have got to do some homework on the broker you choose.
MANY brokers out there will give horrible fills, flush stops…and worse. Seemingly profitable positions can vaporize when the broker insists the order was not filled or received. Pick a reputable broker, do a lot of research and read reviews.
Sorry but trading a paper account is good for a couple of things but not much more:
First, it allows you to get acquainted with the platform and understand how to place orders etc.
Next, it somewhat proves your “system” and can give an indication as to whether you are onto something or not. You should stick with it for several months and be ruthless in recording wins and losses.
Do not assume that you can repeat the performance seen in a paper account with real money. There are a couple of reasons but the biggest as prior posters have indicated is the psychology of it all.
A good trader is not excited when they have a great trade OR fearful/depressed when stopped out. Trading is best done in an emotionless state. Plan your trade, exit and stop BEFORE you enter it. Once you are in the trade remember that plan and stick to it. Don’t move your stop, don’t second guess yourself. If you get stopped out carry out a post mortem to see whether it was a good trade or a bad entry.
Being stopped out is NOT always indicative of a bad trade. You have to accept losses as well as winners. A good entry can result in a profit or being stopped out. If your system works you need to take each entry provided. If you try to cherry pick them you remove any chance of statistical analysis as to whether the system does in fact work. NONE of us can work out at the point of entry whether this trade is a winner or a loser, otherwise we would be billionaires in short order.
If you want to read up on the psychological aspects of trading try a book (Trading for a Living by Dr. Alexander Elder). There is a lot of material in there about reacting like the rest of the sheep like we are all programmed to do.
Another reason that paper trades differ from real trades is obvious, you are not being ‘filled’ with anything so have no impact on available bids/offers.
There is a reason that 90% of traders that open a $10k account close/lose it in 6 months. The playing field is heavily sloped against you. Nothing in life is easy. Forex trading is no exception to the rule. It requires a lot of work and discipline to come out ahead of the field.
Use good money management. Ensure EVERY trade you enter has a decent risk:reward. Track every trade and KNOW what your win/loss ratio and average risk reward ratios are. Without having these in order you will slowly but surely bleed capital.
If people tell you you are likely to turn $1,000 into a seven figure account balance in 12 months they are doing you a disservice. It can obviously be done, insofar as it is technically possible. The odds against it are huge but if I were you I would aim at something more realistic. If you turned $1,000 into $50,000 in a year you will have done incredibly well, in fact amazingly well. Personally I think $10,000 is a possible target if you have discipline and a good system.
Good luck!
Padraig