Naturally, it is tempting to use a demo account in an exceedingly different way than we might if we were handling real cash. Forex trading is not a game. The way to learn how to do it well is to study and to form a demo situation that’s as close as possible to the situation you’d be in if you were trading for real at this time. So it is very important not to tap out the leverage, open trades at random and play with ten different currency pairs in demo. Anyone who does that’s wasting the break and is probably going to crash and burn when they begin trading in reality.

The strain factor

However careful you are to make your demo currency trading seem as real as possible, there’s still a big difference which you cannot artificially recreate, and that’s the impact of stress. It prompts us to take fast and intense action to avoid the understood danger. This could regularly lead to bad calls made in the heat of the moment.

It is hard to keep calm in real trading and it is not a great idea to try and create it artificially in demo, so all you are able to do to prevent this becoming an issue is to start small when you do go live. If you act in this way, demo currency trading can be a awfully helpful preparation for the real thing.

Do you know what is the biggest mistake that Forex traders make? It’s not about a strategy, and it’s not about money or risk management. The number one mistake that traders make is trusting their beliefs. See, trading Forex is not about what you believe, it’s not about your hunch, it’s all about mechanically following a strategy.

It’s very easy to give in to emotions, to follow your beliefs, which in reality is only an obstacle. Trading is all about getting into a mindset of following technical signals and following mechanical rules. Yes, some decisions require your decisions “on the spot”, but that is not to be confused with emotions and beliefs.

Trader’s psychology is often overlooked, but it really is that important. A trader with the wrong mindset can lose with the best strategy, and the right mindset can get you trading in profit even with an inferior strategy.

I hope you see how important it is not to make this mistake. Forget all your beliefs about Forex and markets, don’t base your decisions on what you believe, base them on what your strategy tells you.