How to trade Forex for beginners – a step by step guide

A step by step guide on how to trade Forex for beginners

We will just explain to you why is there a correct versus an incorrect way of using a Forex trading demo account. Watch our latest video on how to trade Forex for beginners.

How to effectively trade Forex demo, for beginners

Welcome to this next video, which will just explain to you how to correctly trade a demo account. Now, at first sight, you might think, “Well, what’s even the need to have an explanation about trading a demo account? Isn’t it self-explanatory? You have got your demo account and you just use it for whatever purposes you want. Why is there a correct versus an incorrect way of using a demo account?”

Now, I got this wrong for years, the way I used my demo accounts, and even though I got it wrong, I was actually quite proud of the way I used to incorrectly trade my demo accounts. And the way I incorrectly traded my demo account is I traded it, just like it was a real account. And for whatever reason in my psychology, for myself, it’s virtually indistinguishable between trading a demo account and trading my real life account. I didn’t differentiate between the two. My psychology, my actions, everything that I did was identical and I was actually really proud of that, and thinking, “Gosh, you know, I’m trading this just like a real account, I’m not footloose and a fancy-free.” So, I was quite proud of it. And actually, it was a real hindrance, in terms of correctly trading a demo account, because the way you should correctly trade your demo account, is with liberty and with freedom and you should trade the demo account, without thinking, with the full knowledge that this is not my real account. And what you will start to see, is you will start to see, “Oh, when I follow my trade plan to the tee, when I don’t respond to every single country news report that goes against my trade, when I don’t over-manage my trade, when I keep my stop in place, or where I thought it was, I don’t tighten stops, my results actually improve. And over time, that can translate into better trading.

So, the way to correctly trade your demo account is to see it exactly as it is. It’s a demo account, there are no financial repercussions for how you trade it. You can blow it all up, you can spend every penny in the account, it doesn’t matter at all. You use it within liberty and thinking, “Okay, well let me just say, if I put my stops, my entries, my targets, and nearly everything just as it is, how’s my trading do?” You might find that you are actually quite surprised when you don’t over-manage it.

So, go away from here, if you’ve been incorrectly trading your demo accounts, trade it exactly how I have described it there, and if you have been correctly trading your demo account, well done, you’re miles ahead of me and keep up the good work. Hope that’s been helpful for some people, and I hope that’s confirming others in what you already knew. Thanks, guys!

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