Advancement in technology has benefited the retail investors immensely. In the past if you had to learn the basics of trading you had to go to the broker office and learn how the currency market works. Technology has revolutionized the way trading is done. With paper trading one can learn trading without much hassle and risking any money. In fact it is one of the entry criteria before real trading- trade with a demo account till you are good at it. Jumping in the market directly with the real money is suicidal.

Benefits of Demo Trading

Demo trading allows you to get familiar with the trading environment. Basic operations like opening a trade, closing a trade, stop loss, different types of order etc can be experienced without any risk. If you want to test a new trading strategy, you can do so with the demo account. Even if you are a seasoned trader and want to incorporate a new trading strategy, you should first test it on a demo account. Demo account will save you from committing serious mistakes when you trade live.

Start with a Micro Account

Let’s assume that you have done demo trading for few months and want to go live. Before you fund your account, you should be aware of different phases of going live. It is necessary to demo trade first. But trading live is completely from demo trading. Emotions can come into play if you lose money on some trades. There is a way to handle and improve this aspect. You can practice the real trading with risking as little as $ 200 by opening the micro account. Almost all the brokers allow you to trade with a small account. By trading with a small account, you will get acquainted with the emotional aspects of trading real money. This way you ensure that you don’t lose much if do wrong. But make sure that you don’t expect to turn $ 200 account into a million dollar account within a year.

Fund Half the Amount

Once you trade with the micro account successfully, you can open a real account. Fund your account with half the money you intend to invest. The logic behind this is that you don’t lose lot of money if you take emotional decision. At this stage you are still a beginner. You are not in a position to make lot of money. If you do well in this phase of trading and also in previous phase of trading micro account, it will boost your confidence tremendously.

Trade with Full Amount

Invest the full amount only after you trade with half the money successfully for 3 months. If you lose 10% of the account, stop live trading and return to demo trading. This is very difficult choice and most people can’t admit it. If they continue, they lose all the money. You don’t want to do that mistake again.

Being a successful trader is a long journey. You can be successful at this game if you are ready for a long journey. If you are one of those who understand this aspect, then you are already in the top 10% of the traders. With meticulous effort of improving your skills as a trader will make your dream of making serious money come true.

Author's Bio: 

End up being a really good trader and visitlearn day trading. You may also improve your trading efficiency by checking out AvaFX review.