In the previous lesson, we discussed the importance of knowledge, how that your quest of being a trader can be actualized with the right knowledge. In this lesson, we will talk about how this acquired knowledge can be put into practice so as to maximize its potential.
Knowledge is crucial to your success as a trader, however, is that all there is to making money trading forex? No, I don’t think so. You can learn all you can, but without practice- that is putting what you have learned into work you can’t succeed as a trader. Knowledge is just one part of the whole equation. You will definitely become better with adequate practice.
While staring out as a trader, you can practice what you have learned using numerous methods. These methods are:
Practice Using a Demo-Account
I personally advice newbie traders to start out by demo-trading on their chosen broker platform. This will help the newbie learn two things basically.
• Get acquainted with the chosen broker platform
• Learn how to place trades and understand fairly how the market works/behave.
Having chosen a broker to trade with, it is of paramount importance to first start by trying out the broker’s platform through demo trading. This step can be skipped by a pro-trader but not a novice. To avoid placing trades wrongly you have to demo-trade. Different broker platforms function differently.
Furthermore, even though you can learn how to place trades using a demo account, you cannot, however, completely understand how the forex market behave. You will only fairly understand.
Practice using a forex simulation software
Demo account is a good place to start from, however, forex simulation software can come in handy on days when trading sessions are closed such days are Saturday and Sunday. So, instead of waiting till Monday of the next week to continue practicing, you can just continue your practice offline using this software. These software’s allow you learn how the market behaved in historic times. Even though its result might not be as accurate, it can, however, give clues.
You can get this software online some of which are free while others are paid.
This software doesn’t just simulate arbitrary market behaviors for users, instead, it uses the data gotten from historic market behaviors of different currency pairs. So, anything it simulates are based on past events and since some of this historic events might not happen again, the software might not be completely accurate, but as I said earlier it helps you get acquainted with how trading happens.
Practice Using a Live Account
Having practiced enough on your demo account or on a forex simulation software, it’s now time to go on to a live account. On a demo account you might have learned how to place trades and more, however, forex trading is much more than just placing trades, there is a physiological aspect to it. You have to train yourself to be disciplined both mentally and emotionally.
You can deposit a sum of money you can afford to lose into your real account, then practice all you have learned. In subsequent lessons, I will put links to materials that will guide you into becoming a professional trader.
Do you have questions you will want to ask? Drop it in the comment section. Don’t forget to share.