A demo account is a free service provided by some of the best Forex brokers in the world to a new trader. In a demo account, you can perform different types of practices and move to understand the best strategy for your trading. You can put a certain amount of demo money in the account also helps you learn how to invest properly in the market without losing your money. But you should never forget that you have come here to make real money, not just to play with virtual money.
But what could be the right time to shift from your demo account to a live account? Well, hardly anyone is going to suggest you the right time. Seeing the ups and downs of the market, people find it hesitating to switch between their accounts because when they do, they find the real market quite different from the demo market. A strategy that is going perfectly in the demo account might not be a good idea in the live account. So won’t you invest your valuable money in a real trading account? You will and we will help you with this.
After a certain time, you will get some signs to switch between the markets without having any risk of losing your money. In this article, we have covered those points and have described when you can switch the market from your demo account to the live account safely and securely.
What becomes difficult while switching between accounts?
Among all the difficulties, the main difficulties are the thinking and decision-making ability of the traders. In our Forex reviews, we have found mainly two types of traders we can distinguish. The traders in the first group switch their accounts too early whereas the second group moves on too late from its demo account.
- Moving too late
We all know that a demo account is only provided to you to get all the basic information required to be successful in the field of trading without putting your real money at risk. Demo accounts are designed with the intention to provide you with all the experience you need to get before stepping up in the field of real trading.
Some traders use that account for too long, which is never a good idea. These people find themselves stuck in the phobia of losing money.
- Moving too early
In the second case, people find the demo account boring and switch to a real account without gathering the proper information about the market with their demo account.
These people first gain profits in the demo account and find them overconfident and end up losing all the money they have.
Without knowing the real concepts of trading, it is vain to invest a high amount in real trading. Even professional traders found themselves stuck with the market changes. They should know that it is much better to lose unreal money in your demo account and learning from your mistakes than losing your real and hard-earned money in real trading.
When to switch between the accounts?
Now finally, we have listed certain periods when you will find the best time to switch to your real account from the demo one.
#1 When the profit outweighs the losses
To switch to your real account, you must achieve some level of sustainability. When we talked to the top 10 UK Forex traders, we found that getting small but stable profits is the key to success in real-life trading.
Many people think that a good trader is the one who covers all his debts with his one trade, but that is not that. To get the proper idea of your success rate, you can compare your winning transactions with the losing ones after making at least 100 trades with your demo account.
#2 When you find yourself faithful to money management strategy
You can never get substantial profit from trading if you do not have a reliable money managing strategy. Not only having a proper money management strategy helps you achieve your goals, but it is the ability to follow those plans to get the best out of your trades.
Money management strategy is implemented by the best Forex brokers in the world. It helps you manage the total balance in your account balance. These strategies consist of several rules that help you estimate how much you should invest in your single trade.
If you are using these rules properly, it can be the best time to switch to your live account from the demo account because it ensures that you will not lose the whole amount you have. Being an advisor, the average investment capital should be around 1-5% of the total capital.
This is a fact that everyone loses money in trading, but following a proper money management strategy will ensure you enough protection from sudden losses.
#3 When you are able to control your emotions
The best time when you should leave your demo account and move to your live account is the time when you are able to control your emotions. The importance of emotions in trading is priceless and you can never succeed with an unsettled mind.
You need to understand that trading requires great control over your emotions. Though you will face different situations where you just cannot control your calmness, you should definitely try to do so.
Your demo account can be the best forex platform where you can hone all your skills and also get control over your emotions. It is also a fact that things will be quite different in the real market than in the demo market. But the only thing you need to do is to practice more and more. It is true that practice makes a man perfect.
Using a demo account for a lifetime can be a very bad idea. Demo accounts are just created to provide you with all the experiences of trading in the market. However, things might go the other way in the real market but your practice will surely be counted.
For the traders that have already switched to their real account and are finding them in the category of too early entry market, you can still learn the basics of the market and prepare the perfect strategy according to it.
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