Transition periods are never easy and if you don’t know exactly what awaits you at the end of the road, you can be very disappointed or downright shocked. For a trader who is just getting familiar with foreign exchange, the Demo Account is the best friend, because it makes trading easy and harmless. There are no risks attached to this type of account and if you enter a downswing due to bad luck of ineffective trade strategies, you will lose nothing.
On the other hand, when you start trading for real and open a Live Account you are taking chances and enter a world where competition feels at home. This is why it is very important not to skip any stage and to make the transition only when the budget and experience allows you to. Few know when they are ready to spin real money and some are deceived by their success with the Demo Account, so they jump on the bandwagon and expect the same results.
Past performance doesn’t influence future results and although the same trading system applies with both the demo and Live Account, the stakes are different. Pressure is a very real enemy that traders are fighting on a daily bases and unless you know how to deal with it, eventually you will get crushed. To mitigate the risks and make it easier to cope with the stress, it is important to limit your exposure to less than you can afford to lose. There will be many opportunities in the future and it is pointless to risk all your savings on one card in the early stages, when you are less experienced.
It is not a mistake to dwell longer in the Demo Account if you feel that there is a lot you still have to learn about Forex and postponing the transition to a Live Account is acceptable. On the other hand, you need to know that foreign exchange is a business where taking chances happens on a daily basis and sooner or later you will need to upgrade your account. By investing reasonable amounts and avoid the mistake many rookies commit, by taking leverage as a get rich soon scheme, you will thrive.
Forex trading should be regarded as a long term investment and the Live Account as a source of steady income, so you shouldn’t put it into jeopardy for what seems to be like easy money.