A demo account is your risk-free testing ground. This is where you will spend many hours testing your ideas, indicators, settings, strategies, Money Management, and your discipline. Trade like it is real.
It is very important to know how to do the proper back and forward tests. To those who are not familiar with these, backtesting means you measure the performance of your setup historically trough charts.
Forward testing is a bit harder and you measure real-time performance. You will need some time and the right mindset for the latter.
First, have a spreadsheet where you will record the pip performance of your trading strategies to different scenarios (timeframes, currency pairs…). This is how you will know what works properly. Avoid eyeballing until you get some experience.
Then, when you are happy with your strategy pip performance you may go to a live account. However, remember that a successful Forex trader never stops improving! Your demo account will serve you to find better indicators, strategies, etc. It will remain one of the most important tools for you to stay on top of this game.
It is very important to know how to do the proper back and forward tests. To those who are not familiar with these, backtesting means you measure the performance of your setup historically trough charts.
Forward testing is a bit harder and you measure real-time performance. You will need some time and the right mindset for the latter.
First, have a spreadsheet where you will record the pip performance of your trading strategies to different scenarios (timeframes, currency pairs…). This is how you will know what works properly. Avoid eyeballing until you get some experience.
Then, when you are happy with your strategy pip performance you may go to a live account. However, remember that a successful Forex trader never stops improving! Your demo account will serve you to find better indicators, strategies, etc. It will remain one of the most important tools for you to stay on top of this game.
