Most traders start their trading journey by demo trading, which is a sensible way to start. Why risk real money in the market if you don’t know what you are doing.
Demo trading is fine for new starters but some people find it difficult to stick to their trading plan as they are not trading with real money. I had a real problem taking demo trading seriously when i first started, so i pretty much went on to live trading very quickly, and lost money, as most people do.
If you are like me and you have the same problem with demo as i did. You will probably be doing the same things i did. Things like, not stopping yourself out of a bad trade on demo as you are not losing real money.
Sitting in bad trades and waiting till they come back. When they don’t come back you blow the account, but it does not matter because its only demo, and you can easily open another account.Trading with too big a lot size to increase the demo quickly, to give yourself an ego boost, so you can convince yourself you are ready to go on to live trading. Jumping in and out of trades, again to try and boost the account quickly to give yourself a false sense of trading success.
I have done it all, and this type of behavior is sub consciously reinforcing bad habits in your trading, which are very difficult to break when they are ingrained.
So whats the answer?
Well the answer for me was to start live trading, and pay the market for my education, by giving it my money. But there is an alternative that could be the middle ground between live trading and demo trading.
Forex trading competitions.
I am sure many of you know about Forex trading competitions. Well if you don’t they are generally run by brokers or Forex related websites as a way of generating new business. Anyone can enter these trading competitions for free. They give you a demo account, and the competition can last for a few weeks to a few months. They offer prize money, generally for the top 3 traders which can be anything from a few 100 dollars, to 1000s of dollars.
The good thing about using Forex trading competitions as a way of improving your trading success is you are accountable for your trades. You are trading against other traders so in order to progress up the list you have to stick to the plan. You cant trade recklessly as you do with demo trading.
The problem i found with demo trading is there is no reward at the end, so its difficult to take it seriously in my opinion. By using trading competitions there is something to play for, an objective, and that is to win. You can win a great prize or a lump of cash without risking any money at all.
Trading competitions are not for everyone though, but if you are having trouble with taking a demo account seriously, then entering a trading competition is a viable alternative in my opinion to trading with real money.