The demo trading accounts are often ignored by the rookie trader. But do you know the professional traders often consider as the most important asset in trading? No matter how many years you trade the Forex market, you need to improvise your trading strategy to keep pace with the market. Those who are using the obsolete trading strategy are losing most of the trades. At times they even blame the Forex market structure. So, how do the elite traders at Rakuten manages to secure consistent profit? They keep on bringing necessary changes to their trading system by using the demo account. Let’s find three amazing use of the demo account which can change your trading career.
Developing your trading strategy
Everyone knows the demo accounts are used to develop the trading strategy. The first thing you should as a new trader is to demo trade the market. Those who started with the real money without having enough experience of this market ended up on losing sides. Very few traders can make a consistent profit without ruining their investment. To learn to trade, you must focus on the practice account. There is no point to risk your real money in the learning stage. Elite brokers give accurate price feed in the demo platform. And if you can successfully demo trade the market, you can expect to make a profit in the real market. Everything is the same in real and demo trading environment. In the demo account, you will never lose any real money since it is designed to develop your trading skills.
Updating your existing strategy
The Forex trading demo is most used by intermediate and pro traders for the up-gradation of their trading strategy. You might have a perfect trading method to trade the major pairs but there is no assurance the market will respect your trading strategy after a few months. If you ever lose 5 trades in a row, you need to switch the demo trading account to update your trading strategy. Most of the time the consecutive losing trades is a strong indication of the change in nature of the market. Find the faults in your trading strategy by using the demo account and bring positive change to your system. Once you fix those issues, start trading the real market and you see the change in your performance.
Some of you might get bored while finding the faults in your system. But this can be avoided by using the trading journal. If you keep track of each trade, you don’t have to use the demo trading account to find the faults. Analyze the past trades in the journal and you will find the weakness in the system. Once you have spotted the weakness, switch the demo account to fix those issues.
Improving the profit factors
Every trader should demo trade the market once in a while. It allows them to test new strategies and systems. Though you might think you are doing great with your old strategy there is nothing wrong to improve the profit factors. Things are really easy when you start dealing with things in the practice account. The sole purpose of the practice account is to improve your trading skills. Things become hard when you start changing things in the real account. A small mistake in the learning stage can cost you a big amount of money. After losing some big trades, it becomes harder to recover the loss. But if you use the practice account, you can eliminate the unnecessary variables of your trading system. Most importantly, you will be able to incorporate new ideas to boost profit factors. Focus on the quality trade execution rather than high frequency. Step aside when you feel mentally frustrated. If necessary, use the demo account until you gain back your confidence. And having strong confidence is one of the most aspects to boost the profit factors.