Demo Trading: Why You Should Always Demo Trade

You just created a new trading account or you were trading live already but things are not looking well for your account. Hence what is the reason you were failing? Was it due to emotion or lack of experience or bad trading strategy? One way to look back is to demo trade.

Demo Trading

Demo trading allows one to get used to the broker's platform and also allows you to train and hone in your trading skills as it carries no risk of losing your real money. I recommend new traders to demo trade for a period of time before starting your real trades. Once you can start making consistent profits on demo trading, you can shift to the real trades. Do take note that entering the real battlefield of trading after your demo trade is totally different as you are trading real money and most likely you will be subjected to your emotion. So do not assume that once you are consistent on demo, you will start making big money on your real trades.

Demo With Live Trading

Another way of trading for those who are already trading live and still refining their strategy is to demo trade while you trade your live trades. That means have your demo trades mirror your live trades vice versa. In this way you can somehow manage your emotions better and also see how well your strategy is working. With demo trading, you can also test the limit of your trades in a scenario of "what will happen if" even after you closed your live trades. With demo trading, you can also test your judgement on the market before you enter a live trade especially in consolidation situation.

Having A Trading Journal

Use a journal to track your trades so you can see your performance. One of the difficulty I have is being able to track my trades after closing as some broker does not give you much data to backtrack. Hence I found Myfxbook. It connects to your trading account and tracks your wins/losses and gives you many statistical data which allows you to reflect on your trading performance. It supports some of the popular brokers like Oanda and it is not a hassle to set it up.

Conclusion

Demo trading is a very useful tool in your trading journey and I do have to really recommend demo trading to all, newbies to learning traders as it will help you to grow well. Experienced traders can use it to try new strategies or to tweak their existing strategy without risk.