Psychological Differences Of Demo Trading & Live Trading
The reality of real-money trading
When you placed your first real-money trade did you broke out in a full-body sweat? Its common when traders switch to real money trading from demo trading. But, what we SHOULD do is not always what we DO, traders who did spectacular when they first started on demo and then suffered some big losses shortly after switching to real money trading.
Indeed, money DOES talk, and anyone who tries to say otherwise is simply a fool (check out the money talks video). In fact, money talks SO loud that it penetrates through our advanced logical-thinking brain components and goes straight to our more primitive “fight or flight” components and stimulates them like an old man on an over-dose of Viagra.
The most valuable thing we can learn from demo trading
Is demo trading valuable? Yes. Should all traders demo trade with my price action trading strategies before attempting to trade them live? Absolutely. BUT, you should understand that there is ZERO emotion involved with demo trading, and so it should not be used as a crutch.
How to trade your live account like it’s a demo account
This is little more difficult than it might seem since the risk of losing money is always present on a real account. But, there are some “tricks” that we can use to keep ourselves calm and collected even while risking real money:
- Accept that you will lose…don’t fight it –The first thing you need to do when trading a real account is to fully accept that you are going to lose sometimes. Don’t fight the inevitable losing trades, instead, learn to work with them and accept them as part of doing business in the Fx market.
- Don’t risk money that’s not truly “fun money” –As I discussed before, never trade money you really need for anything else in your life. If you want to trade the markets you will have to have RISK CAPITAL just like if you start any other business you will need capital, so remember that Forex trading is a business.