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Nick Goold

Many brokerage firms offer demo accounts. Demo accounts are a service that allows you to learn how to operate the trading platform and test your trading strategies without risk. Before trading with a real account, you should practice on a demo account until you can profit.

On the other hand, if you use a demo account for too long, you could struggle to transition to a real account. Moreover, since real accounts use one's own money, stress can impact a trader's decision-making. Therefore, mental control is necessary to follow your trading strategy under pressure.

Losses in a demo account and a real account have different mental effects. You will find it much more difficult to cut your losses in a real account and may also lose confidence after a losing trade.

Nevertheless, the trader will eventually need to move to a real account.

So let's consider the steps involved in moving from a demo account to a real account.

Step 1

When trading in a real account, be prepared to accept the risk of making a loss. No matter how good a trader you are, you will have losing trades.

Step 2

Start trading a small real trading position to reduce your risk and build confidence.

Step 3

Make sure you use the same trading strategy in your real account as in your demo account and that you manage risk similarly.

Step 4

If the results in the real account are poor, take a break or return to the demo account to improve your trading skills.

Step 5

Change your mindset to focus on the next trade. Instead of dwelling on past bad results, focus on improving your trading strategy.

The key to trading is to find a strategy with an edge. First, understand the patterns and characteristics of the market to build a trading plan. Then, once you have found a profitable strategy in a demo account, execute the same strategy in a real account. Understanding the challenges in a real account will help you in future trades. It can take time to become profitable, but keep a long-term perspective and follow your trading plan.