Starting trading with practice using ‘Account Demo’ is one of the best actions to get used to forex trading. Account demos are also good for you to EXERCISE technical analysis, chart drawing, backtesting, or forward testing. However, demo accounts have their own drawbacks.
The biggest disadvantage is, demo accounts can not affect emotions when you have Open Trade or when the position is floating negative. We will not feel EMOTION and STRESS trading real money.
Have you ever felt, "easy to trade with a demo account", HAPPY to make a profit! Many newbies who start a demo account with a deposit of $ 100,000 and in less than a day have managed to increase the capital to $ 140,000 or $ 150,000. This is great, but it is not REAL enough, because it is rare for a retail trader like us to open an account with a capital of $ 100,000. If we use a demo account with too much capital - after that continue to use a real account, usually we are unrealistic in placing lot positions and taking risks.
Many more mistakes we make when opening a demo account make our performance in a real account not as expected.
Let's focus on how to make the demo account look more REAL.
First of all, you MUST open a demo account with REALISTIC capital which is a smaller amount such as $ 1000 instead of $ 100,000. I mean here to deposit the amount you can afford for example $ 1000, $ 500 or $ 2000. With this amount, the SIMULATION of your training in the demo account becomes more REAL.
By using a small demo account you will get the following benefits:
- The PROFIT you get in the demo account is the fact of the profit you will probably get in the REAL account. The large amount in the demo account will only make you OVER-CONFIDENT, this is what we need to avoid.
- SPREADS are also REAL. Usually, newbies who use large amounts in demo accounts will try to get PROFIT in one small move. With a small percentage of PROFIT for example 5% of the $ 100,000 in DEMO - you already get $ 5,000. It is already considered big, isn't it? $ 5,000 in Ringgit you already got RM20,000, that's a LOT. This will actually make you NOT REALISTIC and OVER-CONFIDENT.
Here are the preparations you need to make if you are a NEWBIE. Start right off, make the right preparations to get the right PROFIT. REALISTIC! The unrealistic person is the one who FAILS early in this industry.
