6.5 Why you need a broker demo account and where to find one Video Lecture | Forex: Learn and Master Trading (English) - Business Basics

welcome back to Catholics forex trading
calm in this video we're going to focus
on the importance of a demo trading
account and the reason why is because
there are a lot of traders out there to
start trading in the live markets first
rather than user demo account and also
there are traders that use a demo
account but they don't use it long
enough because they seem to develop a
fake confidence that they can trade live
markets only to realize that in the long
run they get burnt now you will always
need to practice your strategies we've
been doing this long enough to know that
people change and mold strategies that
they are taught into their own versions
and rightly so but even if you follow
what you've been taught to the fullest
extent
you still need to develop confidence
within yourself towards that strategy
because it's not your strategy it is
something that someone else has taught
you so if you're going to follow step by
step rules from someone else else like
us for example you need to make sure
that you have a clear 1 month minimum
worth of successful data for that
strategy this will build up your
required confidence that your adopted
strategy works now you can make mistakes
in your demo account but you can't make
mistakes in your live account the market
simply won't forgive you it doesn't care
whether you win or lose but the market
is always right and you need to adapt to
it and that is why a demo account is
very important if anything use it to
confirm the success rate of your trading
strategy now you need to get familiar
with market conditions so as we said
earlier the market doesn't care about
you or what you trade now for some
reasons some traders fail to accept that
they cannot be right 100% of the time
there is always going to be some factor
event speech or whatever that will turn
the market into the opposite direction
to the one that you're trading in it's
nothing to do with you it's not your
fault but this will never change
so losses are a part of trading and it
is
to you to control these losses and the
more familiar you are with market
conditions the easier it's going to be
so just remember the market moves in
different direction because of factors
that have nothing to do with you but
it's up to you to get familiar with
these market conditions the movement and
simply be prepared the third point is
something that any Forex professional
will confirm and this is that discipline
is the most important characteristic
that a trader should have so even though
it's important to know when to trade
it's also important to know when not to
trade to stay away from the market
knowing that you're not going to make
any money is a very hard thing to do
unfortunately people trade when they're
bored or because I haven't reached their
financial target for today you can't do
this these are characteristics of
traders who lose so if you want to be
successful at trading you need to know
when to stay away and if there's any
doubt towards a trading setup that
you've seen you need to be disciplined
enough to not click the order button the
worst part is if you're wrong you will
see that tray that you purpose it and
enter shoot towards your target and you
will say to yourself I should have took
that trade but to control this emotion
and not let it influence the same
scenario next time is very hard but if
you succeed you're halfway there because
you if you don't trade you don't lose if
you trade incorrectly however you do
lose so ensure that you have the
required discipline to be strong and
confident towards your decisions now
money management is something that a lot
of hedge funds or training floor
managers keep a very close eye on it
comes in many formats but for example if
you give yourself a 100 dollar daily
loss limit or that could be 5 dollars
depending on your total investment
that's a format of money management it
doesn't really matter what the limit is
but if you stick to those rules
that's great money management if you set
a daily limit of let's say $10 and you
lose 5 in your first trade you know that
you cannot simply increase the
investment in your next trade in fact
you need to decrease the amount into
let's say $2 50 in each trade so losses
incurred she only be recouped through
good money management even if that means
that you have to trace to break-even
again but if you ignore this and double
up in the next trade what happens if you
also lose that trade will do ants the
answer is that you in a much worse
position now than you were earlier and
you probably took out your daily limit
now so help yourself by using good money
management and practice it in a demo
account because tomorrow will bring new
opportunities even if you fail today now
experience without risk you need to feel
the wrath of losses and see how it
affects you and how you react to it now
the risk here is zero as this is
obviously a demo account but it will
prepare you for when you trade in your
live account it is screen time are you
looking at your screen and looking and
analyzing your charts that will give you
the experience and a knowledge that you
need to take into the live market if
you're trading in a demo account for one
month for example or two months and
you're still not confident then keep
trading it there is literally no time
limit to this so you need to make sure
that you perfect everything before you
move into the live market now practice
precision and timing now this refers to
the point where you enter and exit the
market so every strategy will have its
own points of entry and exit and they
will be dependent on market conditions
surrounding them now through practice
you will be able to see with your naked
eye where that is so if your timing
isn't right or your precision is not
precise enough it's a recipe for
disaster so ensure that you practice
until this is mastered
and lastly psychological preparation now
90% of traders fail why is that so
trading should be easy right because
it's simply a case of following rules
however it's not a case of being right
all the time because losses are a part
of trading but if you are not
psychologically prepared to take those
losses or to take yourself out of the
market or to pick yourself up from
everything negative that could possibly
happen has happened
it may not be your time yet you still
need more time in the demo account
because these negative factors can
mentally scar a trader you need to be
strong and prepare yourself for
everything that the market will bring so
for example if you've been taking a hit
throughout the week and you end up
moving your stop-loss further away
because the markets all of a sudden
reversed you must go back into your demo
account because you have broken one of
your rules now you should never move
your stop-loss
if the trade has suddenly reversed
towards you so trading is a
psychological war between yourself and
yourself only it's not a war between you
and the market so you need to make sure
that you're confident and even when
you're wrong you're happy enough that
tomorrow will bring brand-new
opportunities so what we've done for you
on our website if we can just take you
over there for a moment is provide a
table of forex brokers that provide demo
accounts so if you go to our website
capex forex trading comm and then type
in for a slash forex - brokers or simply
just click on this forex brokers tab
here you will see a table that lists
various forex brokers and each one of
those brokers on the right-hand side
here under the demo account column has a
link to open a demo account okay so have
a little look on the table see which
broker you prefer the most
simply click one of these links and open
a demo account it's all for free you
won't cost you anything and it's a
perfect opportunity to practice your
strategies and take everything that
we've discussed in the presentation into
the demo account
so that concludes this lesson as usual
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for the next lesson thanks