There is a common question often asks, if it is important to practice trading with a demo trading account. If you also have questions like this, don’t worry you will find the answer from this article. So as reports say 4 out of 100 traders can earn money and can make a career out of trading, so do you know what can be the reason behind them? The answer is a lack of knowledge and preparation for trading. Have you ever seen any cricketer doing practice in a real match? The answer will be no and we know that. You will find that player practicing every day in nets and he plays 3 or 4 series in a year. So hope you understand that you have to practice a lot for performing well in a real battle and you can consider trading with a demo account like doing net practice where you have nothing to lose. Now we are going to talk about the advantages that you get from using a demo trading account.
Finding out the best trading platform for you
When you are thinking about trading and you think that you have gained enough knowledge and now you are ready for putting your feet to the real trading world, look for a great broker. See here and you will notice Saxo is offering premium platforms to the retail traders. There is lots of trading platform you can download or buy from internet but try to choose the best one. You just need to read all the terms and condition and also should try to trade with that platform before taking any decision. But it is not quite impossible and insane to upload money on those accounts and trade with real balance. But don’t worry almost all the trading platform provides you demo trading account and you just need to open an account and you can trade with demo balance in the real trading market. By doing that you may easily choose a suitable trading platform for you.
Backtesting your strategy
Once the learning period is over then you must need to make a strategy for your trading and you have to know if this strategy can give you a fruitful result. So you must implement your strategy in trading and what is a good way other than implementing your trading strategy in a demo trading account where you can backtest it without losing a single penny. You should keep practicing your strategies in your demo trading account until you are confident enough to use that in your real trading account.
Fixing a money management rule
With a demo trading account, you can trade without losing any real money and this is why it is the best place to make money management rule which you are going to follow. Forex is a place where you should only invest the money that you are ready to lose and also a portion of the money that you are going to take risk of. So we suggest you upload the same amount which you are going to invest with a real account to your demo trading account and should trade with that. By doing that you will find out a perfect rule that you need to follow if you want to be alive in this market.
Once you find a money management rule, try to fix a risk-reward ration and lot size according to your trading balance and try to practice accordingly to it. We suggest you trade with your demo account until you make double your trading balance twice. Once you do that you might consider yourself ready for joining the trading market with real money.
Trading is a risky profession so you just need to use all the resources. It will reduce the chances of losing big money. This is why using a demo trading account and practice trading in there can never be neglected.