Trading a Demo account is very different from trading a Live account with real money. The trading psychology mindset needs to be strong to prevent fear intervening with the trading plan.
Trading at home can also be difficult if you're doing it alongside your day job. Here are some tell tail signs that trading may not be suitable for you.
- Essentials - You're trading money that is essential to your everyday life
- Hiding - You're hiding money from your partner
- Arguing - You're arguing with your partner more regularly
- Sleepless - You're not sleeping, because you're worried about losses that could put your overall finance at risk
Use 1/3 of your account money for 6 months
Trading Accounts Blown
With 9 out of 10 beginner traders failing everyday, it's important to know when to call it quits. If you're starting with a $3,000 account, make sure you put $2,000 of that money into a safe place and forget about it. The $1000 you now have in your Live account is your trading capital. If you can survive more than 6 months with that sum, consider moving the $2,000 into your Live account in two phases, one month apart.
If you lose your entire $1,000 in the first 6 months, here is what you need to do:
Consider that $1,000 your trading school fees.
Take a short break, look at your trading plan and see how you could have improved it. Reduce leverage by 1/2. Try again with your secondary $1,00 for another 6 months. If that fails:
Consider that $1,000 as higher education fees.
Finally, this is your third shot at making things work out. Trade 1/4 if your original leverage. Try again with your final $1,000 for 12 months. If that fails:
You need to evaluate whether trading is making you happy or sad. If you're happy, it's not affecting your personal financial situation then you could consider dedicating more time to learning. Some people are slower learners than others.
If trading is making you angry or depressed, don't trade for at least 12 months and re-evaluate in the future. You may find yourself happier pursuing other investment strategies.