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LESSON: Demo, Demo and Then Profit!

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[op_liveeditor_element data-style=””][text_block style=”style_1.png” align=”left” font_size=”16″ font_font=”Montserrat” font_color=”%237e7e7e”]Forex is a great market to trade and to learn to trade in. We are very lucky that there are many great platforms that allow you to trade exactly like you would with a “live” account only it is a demo or practice account.

As stated earlier on the course, the charts that we use to monitor our Price Action trades are the Metatrader 4 platform with the New York close 5 day candles (MT5 is now slowly starting to take over with some brokers, although this is a slow process).

This is super important especially if you want to start seeing the set ups I am continually taking. I personally trade live with this platform; however it is up to you who you trade live with.

As long as you are using the correct New York charts for price action trading you may choose to use another broker and charting gear for your live trading.

THIS IS IMPORTANT:

When learning how to be a successful and profitable Price Action Trader there is absolutely no reason at all to risk even a cent of real money. It is just not required.

Over my years of helping people trade I have had so many people come to me and one of the first things they often say is “Johnathon I have lost $xxxx amount of dollars live trading and I need your help”.

I really hate this because this is money they just don’t have to lose. I could understand if it was being spent on something worthwhile but there is no need to lose money when first starting and learning to trade.

I have heard many different reasons and a lot of different excuses as to why people risk real money before they are profitable traders and they don’t use a demo account, but the main two reasons when it really gets down to it are:

1) Traders just don’t want to miss out. They think that by not trading with real money they are going to miss out on making money.

This is pretty much a huge portion of it when we are honest because most of us don’t want to miss out and new traders come in with a real excitement about to take on the world, take down the markets.

This is what I call a universal emotion because every trader has it. Every trader has this feeling of not wanting to miss out (from the biggest to smallest trader). Because this is a universal emotion, it can make my job really hard to tell traders and make them listen to the fact that they are no different to anybody else.

They are not different to the trader before them or the one that is going to come next. It can be really hard to explain to them that the reason they are wanting to risk money live trading is because they don’t want to miss out on making big profits, but it is this fear that is going to cost them money whilst they are learning, just like it cost all the other traders who were learning before them.

This fear of missing out is what drives traders to over trade and risk too much money and it is universal in ALL traders, woman and man, professional and amateur.

2) is that traders have either been told by somebody else or they think that they have to risk real live money to ‘experience’ trading emotions.

I get told this excuse / reason so many times by traders as to why they are gambling away all their money in the markets. And by the time they are coming to me they normally say something like “I don’t believe in demo accounts because I want to experience trading with real money”.

These same traders will then go and open a small Forex account and deposit $100 having just lost $10,000 and will now behind risking a couple of dollars per trade to “gain real money experience” = aka “gambling”.

The Explanation…

Real money is important – of course it is! Dah. We can’t buy food or pay rent with demo cash.

But if you go and blow $5,000 accounts or $20,000 accounts when you have no proof and are not ready to trade with real live cash, then this is gone and you have to work twice has hard to gain it back.

Let’s look at the two issues I spoke about above, but in reverse order…

Firstly the I need to trade with real money. That is fine; if you ‘need’ to do it, do it once you have proven yourself profitable first on a demo account.

The quicker you can become consistently profitable on a demo account, the quicker you move to risking  real money. The whole idea is MAXIMUM PROFITS.

I am trying to ensure that whilst you become consistently profitable, built faith in your own trading method and yourself, you don’t kill your account and trading funds.

Every one of us has the universal trading fears I speak about like the fear of missing winners, or making money whilst we are becoming profitable on a demo… this is normal!

It is these universal emotions that create our errors and others that give the market opportunities. We need to make sure we take the opportunities and not create them.[/text_block][/op_liveeditor_element]