Trade for Real or use Demo Account?
- A number of CFD providers offer demo accounts. Demonstration or simulator accounts cost nothing to open and use only virtual money. So, you can open and close trades and get an idea of how you might perform if trading for real....
- Beware though that demo trading is however limited in its usefulness, psychology changes 100% when real funds are involved so I would advise you to use a demo account strictly for testing purposes only and/or for learning the game whilst you save up sufficient capital.
- Paper trading will never help you understand and then react positively and hopefully rectify your emotions of fear and greed. That's the whole battle with trading. In theory and using demo funds it can seem easy, but when money and emotions start getting involved, that's when it gets difficult.
- Start with something very liquid and cheap to trade and most importantly something which you feel you have a mental affinity towards. Maybe that is shares, or maybe it is forex trading or indices.
- Keep your stakes small and use a great deal of time working out why each trade went right and more importantly why it went wrong. You can even open 10p per pt accounts, get used to these and see why your trades are or are not working, then as you improve your success rate, raise your trade size.
- If you're anything like me you have to make the mistakes yourself to make them sink in. I'd love to be able to learn from other people's mistakes but it doesn't seem to happen, apart from obvious things like stepping in front of trains...
- And finally good luck with your apprenticeship and try to keep your emotions at bay.
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