I would like to know when you’ve got the skills and confidence to trade for real. when you’re not just guessing but actually ready to handle wins and losses without freaking out.
2 Likes
Generally I would say after someone has Learned all the component part of their strategy. Back tested the strategy. Forward tested strategy on demo.(meaning Trade a demo account with your criteria for 4 months) Get to a place where consistent with your trades profitable. Profit targets will vary. (2-3% month example)
a) IF don’t make profit. Review trades, try get feedback from expert etc. go back to back testing strategy. follow above process.
b) IF do make profit. Forward test strategy on a live-account. Try to replicate what you did in demo for 4 months as an example. Make consistent growth each month.
Just my opinion to building a good foundation. Then we all have different goals some may want to make small profits each month on live account or perhaps built confidence in doing something similar to process above and now want to do a prop firm challenge. Potentially using funds to build live account up etc. Every one wants to make money however people have to master the strategy first.
2 Likes
I suggest that a number of trades is at least as important as an amount of time.
An opening range breakout strategy with a trade sometimes filled, sometimes not, may have few trades. A strategy traded on five-minute charts probably has very many.
One achieves statistical significance far more easily than the other.
I think it’s not a very helpful parameter for judging this question.
Examples: a strategy that makes +0.5% one month, +3.5% the next, +1.5% the third month, over 150 trades total, biggest drawdown of 0.2% may be pretty safe; a strategy that makes +3.5% over each of three months, over 60 trades total, biggest drawdown of 15-20%, may be quite useless.
Avoiding drawdowns is the big and relevant issue. 
10 Likes
constant gain dude! constant gain! if you can be profitable constantly, you are ready!
Quite possibly the best advice I’ve read on BabyPips 100% agree. Member of another community by any chance?
1 Like
When you’ve tested your strategies enough to see consistent results and you’ve built up the discipline to follow your plan no matter what’s happening in the market. It’s less about winning every trade and more about managing losses without losing your cool. When you stop second-guessing yourself and accept that losses are part of the game, that’s when you’ve got the confidence to play for keeps.
2 Likes
I’ve always stuck to 4 month demo rule myself to be consistent. It was kind of funny going on the other one and getting told of methods that I genuinely already knew had applied in my trading for years. Yet its good for beginners. Yes I am
Exactly. Thanks for a great first/second post, Shirin, and welcome to Babypips!
You’re exactly right, and for exactly the reasons you explained.
It’s both important and helpful for people to know that it’s NOT about constant profit, or necessarily about consistency. As so many different threads here, and so many experienced traders keep advising, that ultimately boils down - like so many other things - to the difference between a successful approach of risk-management rather than an unsuccessful one of profit maximisation.
5 Likes
For me, the prop firm decided. I didn’t choose. I guess they switched my account from demo to live when they thought I was more likely to show profits than losses.
(I had enough money to join a prop, not enough to trade with alone.)
No matter how prepared you think you are, psychologically you will never really be prepared for a large draw-down on a live account, compared to a demo account, where there’s very little attachment. So this sentence is super relevant.
Your best bet (pun intended) is to open a small live account after you’ve had a few months’ practice on demo. Only then will practice turn to experience.
There are brokers out there who will let you trade a little as 1 unit, such as OANDA. Not sure who else as I have not actually looked around for several years. But start small and work your way up.
I’m currently testing a new strategy on a live account with Oil, using 1 unit. It is a bit of a complicated, long-term hedging strategy that would be very difficult to back test properly, so this is a great alternative. Plus, it’s fun!
Good luck!
5 Likes
Exactly!!! very well explained.
It was when I have back tested, forward tested my model and also demo traded it for at least 12 months and I developed a trading plan according to what I have back tested and forward tested, and then I know that that If I follow my trading plan I will be consistently profitable. I didn’t worry if trades will go against me or not all I did was just to execute, and I saw the results.
I think the most important thing is DISCIPLINE, discipline to follow your trading plan. Discipline breeds consistency cus as long I’m following my trading plan I will be consistently profitable.
1 Like
I started when things began to look right on the demo account.
I don’t think there’s a ‘right answer’, but I think what I was originally taught is a pretty good answer for a lot of people.
“You’re ready to move from demo to live whenever you’ve done 250+ consecutive trades on demo without making a net loss out of them and without ever having any peak-to-trough drawdown bigger than 5%.
What really matters is probably to understand clearly that it’s about avoiding losses, not about how much profit you make. I’m sure the people who don’t understand that clearly are the majority who don’t ever learn to trade profitably.
It would be interesting to know their exact parameters for deciding that, wouldn’t it, because that would probably be a very well-researched and pragmatic answer to the original question?
5 Likes
I totally empathize with you.
It must be hard as a new trader. I am a long way departed from the negative feeling of a loss. Trading is about managing risk and having a good system for doing this.
The chart is merely there to give you an entry and exit model. Over 1000 trade outcomes, you are looking at 30% to 50% of occurrences being right. This does not apply to longer term swing traders because they never live long enough to collect the data. A topic for another day.
So if you know every sample set of 1000 trades is a 50% probability (a coin toss), then you need to just have good risk management to create a skew towards more trades yielding a profit at the start of the sequence of trades. You also need to have a positive profit factor.
If you have a model for this, then go live. There is no point wasting your occurrences on a demo. The market is live not a demo. I think we all know how to risk $10 to make $20. Do this 1000 times with a 50% win rate (allowing for the Monte Carlo effect). Hence the portion of account at risk must be able to handle a few consecutive losses.
Don’t over complicate. Everyone wants to say something smart. In reality, it’s a ledge. Just step off.
2 Likes
I know the excitement of trying what you have learned in live trading, tbh i blew a couple of accounts when i first started trading with hfm a decade ago, but the proper way to do it is when you can gain and earn consistently on demo, to e safe atleast 6 months of trading demo atleast that way you go through almost everthing you have to go through, making a couple of good trades even doubling you account in demo is not enough, you need time.
Totally relate. Solid demo practice for at least 6 months is key; consistency beats quick wins every time.
1 Like
If your broker gives you a different server to connect to for Demo trading, it’s not the same feed as Live trading.
3 Likes
I think they don’t disclose this information, probably. And maybe wouldn’t want to, so as not to let either competitors or customers see it?
1 Like
Hi @Magnolia.York,
I think that I had answered similar question, but it probably wasn’t yours. 
I just want to share my opinion about when to switch to a real account. I got some experiences during mentoring and recruiting traders in the past. The turn over was incredible huge, most of them very proud and bold in the beginning, resigned after 3 months, kind of depression or too stubborn to accept the truth. Some got angry, accusing us had no faith with them 
. Since I’m not in this industry anymore, I can spill a little bit on how to spot potential trader.
Nothing else, it’s the rule. The thing that differentiate a professional trader from common trader is the rule. The rule is our secret that we wont share. It becomes our weapon. Most professional trader will understand what is working and what isn’t. When a person tells their strategy we actually will know how good he/she is. When we find out the rule is good, next we will find out how he/she executes the plan consistently.
When a trader can’t describe the rule, he/she wont be able to survive for long. Even he/she can have big profit, it’s only luck. No certainty for the person to survive in next 3-5 years. It’s important for a trader to survive in 3-5 years. This period is more and less about financial cycle.
Back to your question, how to determine a person ready to move to real account, for me depend on how good is the trading rule that the person has. If the person can’t describe any, learning is still needed.
Having consistency and clarity on how to trade are very important for a trader. During recruitment, I was impressed when the person could describe his/hers rule. Even when the rule was wrong, I’m sure the person can improve the skill. He/she would be on the right track. Most trader will show off the skill by presenting their trading history. But when we ask the detail, they can’t tell.
In short, have no rule, we don’t have trading stats. No trading stats impossible to create trading plan. No trading plan, how to manage the risk accordingly?
Hopefully, it clears your doubts 