Are you itching to dive into live trading after cutting your teeth on your demo account? Hold your horses. It’s very different when you’re playing with real money. Trust us. Take a look at our tips for beginner traders looking to make the move from demo trading to real-life trading.
Do you think you’re ready for real-life trading?
So you’ve schooled up on the jargon, you know how to read a chart, you’ve decided on your trading strategy and you’re practicing your mindset-training techniques. Now you’re continuously educating yourself about your chosen sector and you have a trading plan in place.
Let’s say that in your demo trading experience to date, you’ve been treating trading like a job with disciplined hours and you’ve got into the habit of logging your trades. You track your mistakes and try not to make them again. Great. And most of all, you’re high as a kite on the successes you’ve been having with your demo trading account. Now you think you’re ready to switch to real money...
But hold on, it’s a different ball game in real life trading.
Make sure your approach is watertight
Before jumping in with real-life trading, make sure you follow your strategy exactly with every practice trade. Do you stick to your plan with regards to what percentage of your account you invest in any trade, what your reward/risk ratio is, and when you enter and exit a trade? Wait until your win/lose ratio is where you want it to be. Make sure you have that down now because when you’re in the live market you’ll need that to be an ingrained habit.
You also want to be very comfortable with the trading software that you’re using so that in the heat of the moment you don’t make any mistakes. A surprising amount of money is lost in real-life trading through user error.
Technology shifts in real-life trading
When you are trading live you’ll see that you might be more prone to the impact of latency (or small delays) in the networks. And your broker’s servers might refuse order calls during high-volume periods.
Also, be prepared for the price slippage that happens in real-life trading between when you make your offer and when you actually buy your asset.
If you’re unsure about some of these themes, we have an ebook library, video library and lots of great trading resources to explore to get you up to speed.
Mind shifts and nerve
Nothing prepares you for the mettle testing that comes when trading with real money. You might find you’re more cautious and it will be harder, at first, to keep your nerve. Your stress levels will be higher, which impacts decision-making and impulse control. Practice trading or demo trading doesn’t pit you against the raw edge of greed and fear with the time pressure that a moving market brings.
One of the key lessons in real-life trading is to always be sure you’re prepared to lose the amount of money you’re playing with.
Money matters in the move from demo trading to real-life trading
Avoid making the switch to live trading because of money pressures. A scarcity mindset or financial desperation will also interfere with your ability to execute your trading strategy flawlessly. If you can’t insulate your trading activities from these issues then put off entering the world of real-life trading until your financial situation is easier.
Remember, start small and stay mindful of the moment
There are no miracles in real-life trading, so just start small, get comfortable and then move forward according to the way you’re performing and not according to any pre-set deadlines. Consider all the factors mentioned in this blog before you dive into the live trading environment.
If you’d like any help or if you’re having difficulty in making the move from demo trading to real-life trading, why not book a 15-minute initial consultation with one of our team of VSA trading experts? It is free of charge.
Tradeguider is the home of Wyckoff Volume Spread Analysis (VSA). We’re highly experienced experts in trading techniques and trends, with a wealth of trading services and resources available on our website. If you’re dipping your toes into the live trading area, our videos, ebooks and other resources will really help you to get to grips with the fundamentals of real-life trading