When to switch from a demo account to a real one when trading on a market (exchange)?

Hello, I'm interested in the topic of making money on Forex. I read a lot of useful information on trading, and I also had a demo account through which I learned to trade currency pairs. But as soon as I “started” a real account, I started having problems and trading went negative. Now I stopped trading until the cause is clarified. Tell me, what can this be connected with and how can this problem be solved and when is it better to switch to a real account? Dmitry Alekseevich, St. Petersburg.

Hello, Dmitry Alekseevich!

Unfortunately, this situation is a "reality" for most new traders. Some experience such difficulties immediately, while others after a short period of time. But almost every trader, when switching from demo trading to real trading, begins to lose his money. If you encounter this, here are a few potential reasons why this happened and how to return to the profitable trading that you showed on the demo account.

First of all, relax in breaks from the trade. What you are experiencing is a normal process. There is a lot of pressure when real money is in circulation. This pressure can cause additional factors that can affect your trading.
Of course, this pressure would not exist if you continued to trade on a demo account.

For beginners, it is quite normal for a few weeks or even months unstable live trading. This is a very important stage in the development of you as a trader. If you learn to cope with yourself, then move one step closer to successful trading in the market.

Only those who are ready to persistently move towards their goal, and make certain efforts to this, will eventually become successful. Try to understand that every successful trader who entered the market went through a similar phase of "transition", and although it was difficult, they coped. Here we recommend that you study in detail the article - "How to trade on the Forex currency market", which describes strategies and indicators of trading, as well as all the nuances and subtleties of earnings.

Reason 1. Change in market conditions

The transition from demo to real trading becomes even more difficult if the demo trading period was relatively brief. Market conditions are constantly changing, so if a trader only has one or two months of trading on a demo account, this means that a trader is unlikely to cope with various conditionsthat can happen to him in the market.

Consider a trader who trades a demo account in a very volatile period.

Their strategy is built around capturing large price fluctuations. The strategy works well on a demo account in volatile conditions, so the trader opens a real account (that is, a real trading account). Volatility is reduced, but the trader continues to believe that every trade will lead to a large price fluctuation. But the situation does not develop as planned, and the trader’s account is filled with losses.

The trader could not adapt to the current market conditions due to lack of experience, the market showed the trader a situation for which he was completely unprepared, which led to a loss of funds.

If you have difficulty trading after the transition, consider whether you have prepared yourself for all types of market conditions. Traders should know when it is best to start trading, and when it is best to stop (based on their trading plan) based on trends, lateral market movement, unstable and slow markets. If you do not know how to trade (or when it is better not to trade) in these conditions, exchange trading should be paused.

Reason 2. Psychological element

There is one significant difference between demo trading and real trading, this is fear. Anxiety or fear in trading actually changes the way we analyze the market. On the demo account, you probably reacted to every trading signal.

In live trading (although many traders do the opposite) they begin to question every trade. Fearing to lose money, they tell themselves that this transaction may be unprofitable, and there are not enough reasons to open it.

Being a successful trader requires full coverage and analysis of losing trades. Once you understand that losses are a normal part of trading, you can always correctly analyze your losses and prevent them in the future (by analyzing past losses). This is another step towards becoming a successful trader.

The only way to overcome fear - this is the understanding that, losing in the market, you still get the necessary experience that will help you in the future.

When you start trading in a real account, trade with the smallest position size. Thus, the losses on each transaction are so small that this should not cause concern. Using small positions, you will not be overshadowed by anxiety. Slowly increase your position size, bringing the risks to 1% in each transaction of all the funds in your account.

⭐ Open a live trading account should also be with reputable and reliable brokers. To such, many experts include a broker Forex club.

Output

Transition from demo trading to real trading should be simple. Make sure that you have practiced trading for a sufficient amount of time and that you are ready to trade under any market conditions. If it is a currency exchange, then we took into account the types of analysis of the Forex market and underwent Forex training, if binary options, then we figured out all the nuances of such trading.

When trading on a live account, start with the smallest position size. This may seem like a step backward after trading larger positions on a demo account, but you cannot allow your fear and anxiety to influence your trading decisions.

Over time, you will be able to increase the size of the position. Work on these factors, and your transition to real trading will occur more smoothly.

Also, when switching from a demo account to a real trading account, it is very important to choose the broker through which you will trade (if you are trading in the Forex market, we recommend that you familiarize yourself with our rating of Forex brokers).

We remind you that if trading on the stock market or other exchanges causes problems for you, then you can entrust your money to third-party traders, for example, through trust management in PAMM accounts.

And also recommend watching a video, where else can you invest to earn money: