I started demo trading about three months ago. I flailed around randomly for about two months, then I did the babypips school. Now I have a plan and a system, and I’ve been running my journal and logging all my data for about two weeks. So far I have taken maybe 6 trades and I’m up about 1.8%.
How long should I do this for? I was thinking of maybe collecting a sample set of 100 trades and then reevaluating, but part of me thinks it would be more efficient in terms of learning curve to just do this for another two weeks, then go live with a tiny tiny account, like maybe $100, just to start feeling the emotions. Many thanks!
Biggest mistake people make is sticking with demo too long. Demo and real are not the same. You dont learn anything on demo accounts. People only learn when they feel the pain of their mistakes. Dont be affraid to make a mistake. Go invest money you can lose, dont invest money you cant lose. Make mistakes, lose the spare money, learn. Its the only way.
Good start. Not very bad actually. Yes, every trader should go through adequate trading knowledge process to ensure proper trading decisions and the way you are going is perfect by the way. However, before you can go with large amount of speculation try to complete the risk and money management process at first.
It is quite difficult to define exactly the period of time that would be enough to go to live trading. It depends on number of trades and also on your understanding of the market. The main idea is that you should be able to execute trades without serious mistakes like breaching the rules, prescribed by your trading system.
Despite all doubts, demo account is very important. Almost all professional traders started their path from demo trading, and even now they use demo trading to get familiar with new strategies. It is very usefull tool for many reasons. First of all, trading on demo you can practice such skills like placing orders or making other operations. For sure, while trading on demo you will alway remember that these money are not real, so there would be no psychological pressure or such feelings like fear or gread. At the same time, if the trader acts strictly in accordance with the rules of his trading system the impact of such feelings would be reduced even on real account. That is why demo trading is useful even if it doesn`t cover psychological aspects.
There could be other possible solution - trading on cent account, that is something between demo and real accounts. From the one point of view, funds on cent account are real, so the feelings during trading would be close to reality. But from the other side, both wins and losses on cent account are too small to inluence your financial standing, so this tools if for education, not for earning money.
