Any novice trader asks this question, and the answer is invariably positive. Live trading is a stressful activity. You need to make quick decisions in the biggest financial market on the planet! Without the necessary competencies and preparation, traders in India set themselves up for failure.
Whichever markets you trade, be it stocks, currencies, or CFDs, education is imperative, and practice is its organic part. You need to make sense of ever-changing prices, trends and reversals, on the go. This requires a particular type of expertise. While anyone can learn to trade online, mastery does not come easy. A demo account is your first step towards it.
Overview of Demo in Forex Trading
Consider the currency exchange. All neophytes are instructed to work in safe mode. In India, reputable brokers provide this system. Training accounts are incredibly easy to create — usually, all you need is to share basic contact details. The login and password are emailed to you instantly.
It is tempting to venture out into the real market from the get-go or prematurely. It is the worst mistake a trader could make. Unpreparedness exposes you to risks you cannot manage. A Forextime demo trading account is an opportunity to learn at your own pace and without depositing a cent. Why forgo it?
On average, practice takes between 2 and 3 months. There are many reasons to stay in the simulator as long as possible. You can:
- get used to the software;
- learn market analysis;
- try different strategies safely;
- learn to limit risks.
Exploring the Software
Trading is not quantum physics, but it does have a learning curve. You need time to use the software with confidence. Modern systems are fairly easy to navigate. But when the real market pressure comes into play, everything changes. The need to search for the necessary button will impede your progress and profits.
Learning in 2021 involves more than one interface. Surely, you may limit yourself to just one system — either desktop or mobile. However, you will eventually need to make the access more flexible. Modern platforms like MetaTrader 5 come in a variety of versions that accommodate trading on the move. They share data instantly — the same position could be opened, modified, and closed from different devices if necessary.
Learning How to Analyse
As a trader, you will be making decisions based on fundamentals, price charts, or both daily. A simulator will help you build the necessary skills. Fundamental analysts pore over news from financial media. Announcements regarding changes and interest rates, GDP, oil prices, unemployment, trade balances, etc., may all sway currency rates.
On the other hand, a lot may be deduced from typical patterns on charts. Technical traders learn to identify trajectories like Hammer or Morning Star to foresee the direction. They tell them whether the market is bearish or bullish if the trend will continue or reverse, etc. Naturally, this acumen may not be gained in a day. You need hours of practice — ideally, without any capital at stake.
Compare Different Strategies
Since the 1990s, the global trading community has devised multiple strategies, but none of them is universal. If there were a proven recipe, every trader would be raking in millions. An approach working for your peers may not work for you, and vice versa. A lot of factors play a role, such as:
- the choice of assets;
- the size of your initial capital;
- how much time you can devote to trading;
- risk tolerance;
- stress resistance, etc.
For instance, scalping is incredibly taxing from an emotional viewpoint. You need to keep an eye on small movements throughout the day and make frequent trades that are also short-lived. One position could remain active for a few minutes only. The style requires you to perform well under pressure. In comparison, swing traders take the long view. Some of them are content with a few trades monthly.
Keys to Manageable Risks
Global markets are driven by a diverse mix of factors. Your predictions will not always be spot-on. The goal is to have a decent win-loss ratio, so the majority of decisions are profitable. To keep risks in check, traders set Stop Loss for every position and spread their investments across markets.
A demo is indispensable. You must learn how to calibrate your limit order triggers. These make execution automatic. Finally, the safe mode is crucial for exploration. To add an asset to your portfolio, you need to understand its mechanics first.