Many traders think, if they make decent profits in the virtual market, they can make the same profits in the real market. But, it’s not right. Remember, there is a huge difference between the virtual market and the real market. Newbies need to practice through the demo account to develop themselves. However, they don’t think, they will face the same scenarios in the market. Because of facing the different scenarios, many traders become frustrated and can’t perform properly.
In this post, we will discuss the four things, traders need to consider during switching from the demo to the real field. We hope, it would be helpful for you.
Maintain the risk-reward ratio
In the demo account, traders can maintain a high risk-reward ratio. But, in the real market, you can’t do so. If you do so, you might face major problems. Because, in the virtual field, if you face loss, you will not lose your money. But, in the real market, you will lose the real dollars. So, you should use the SL and TP price levels properly so that you can limit the loss in the market. Professionals keep the 1:2 risk-reward ratio to gain good returns in the market.
Manage the risk
Traders can apply different types of risk management techniques in the virtual market to see how these work. But, in the real market, they can’t do so. Because, in the real market, if you face managing the risk, you might face failure. So, in terms of taking the risk in the real market, traders should aware of their risk tolerance. However, if you apply the different types of techniques in the virtual market, you might easily understand which techniques will be better. So, try to use the right techniques in the real market. Those who are looking for the professional approach, check it out here. Read some posts from high-end brokers like Saxo and it will improve your execution skills.
Use less leverage
If you use high leverage in the real market, your risk will be increased. For this reason, you should borrow the leverage depending on your capital. Because of taking high leverage, you may face troubles in the market. Such as, you might lose your account balance and thus fail to survive in the market. However, traders should keep the high capital so that they can trade comfortably. Otherwise, it’s difficult to trade without feeling any tension. However, try to choose the broker who provides moderate leverage.
Aware of the emotional factors
As a trader, you need to become aware of your emotions and the existing trading strategies. However, in the virtual market, you will not get to know about your emotional factors. But, in the real field, you will face emotional problems because, in this field, you will lose your real money. Because of the emotional factors, traders face big challenges in the real market. In the virtual market, they don’t face the real loss and so they don’t face the emotional complexities. So, if you want to secure your account in the real market, you should become aware of your emotional factors.
Don’t make quick changes
You should not make quick changes in the market as you can face difficulties. Remember, in the virtual field, if you make instant changes, you can deal with the situation. But, in the real market, you can’t do so. So, before making any changes, you should consider the current scenarios of the real market. Bear in mind, if you make unnecessary changes, you can’t ignore the big loss. So, be aware of this fact.
In terms of trading in the real market, you might consider these important facts. Otherwise, you can’t trade smoothly. Remember, the real market is not similar to the virtual market. But, this doesn’t refer, you should not use the demo account. As a newbie, you have to use the demo account to acquire cognition about Forex.