Trading tips to be a successful trader 2

Steps To be a successful Trader and Trade Live 2

This is the part two from our tips to be a successful trader and to be able to trade on a live account.
Please read the part one if you haven’t yet :

Steps To Trading Live and be a successful trader (1)

Step 3 – Double Your Demo Account :

Now that you have learned how your trading system works, it’s time to start trading it. In this step, we are going to trade the system on a demo account. This can also called “forward testing”. You have back-tested your system on historical data, but forward testing it on a demo account really puts it to the test. It will not only put the system to the test, it will put YOU to the test. The human factors of fear, greed and doubt will become huge variables in your trading.

When you are ready to trade on a demo account, you will want to trade with an account that will be similar to that you will be trading live. If you plan on trading a live account with $2500, you will want to make your demo account also have $2500. This means there will be no surprises when you do go live.

You can trade on the actual account you have your charts with if you are using MT4 charts, or you could use MT4 charts to find your trades and place your trades on another trading platform, it really doesn’t matter. A note of caution when using MT4 chart to find trades and placing those trades on another platform… be sure to use an MT4 platform that has a virtually identical price as your platform.  Sometimes there can be a couple of pips difference.

You should be able to trade your demo account comfortably and with relative ease. The position size you trade should be identical to what you would trade on your live account. I only risk 2% of my account on each trade. At this point, your demo should be treated exactly like your live account. No resetting, no refunding, no starting over after a losing trade. You can’t hit the reset button when you are trading a $50,000 live account, it’s important to treat a small account in the same manner.

Trading your demo as you would trade a live account, you want to double your demo account.

Your trading should be consistent, your win loss ratio being whatever it is, risking only a small percentage per trade, trading as you would on a live account.
Doubling your demo will mean you have the system under your belt and you are fluent with trading it.

Step 4 – Open The Smallest Possible LiveAccount :
It’s time to open a live trading account! You have successfully doubled your demo account with consistent and well managed trades. You are on a roll!

When you open your live account, open it with the smallest amount of money possible! Find yourself a Forex broker that offers Micro accounts. This is an account that will allow you to trade for 10 cents a pip.

An average micro account can be funded with around $250. Trading a live account is a lot different than trading a demo account. Of course the rules will be the same, but you will find that it doesn’t work out that way.

Now that real money is on the line, you will find that you start to doubt your signals, you will start to cut your winning trades short and you will let your losses run longer than normal. You have a lot of “emotions” that need to be faced and somewhat resolved before you add more money to your account.

Trading with real money has an odd effect on the psyche. This tiny live account now represents your future. The money in this account could also represent a few bills you could pay. Risking real money on a trade could make you feel irresponsible as a provider. Because there is real spendable money on the line,  you will find it messes with your head.

Trading the smallest amount possible also means that if these emotions do get the best of you, you won’t be in any kind of financial ruin. I know too many people that lost inheritances, college funds, borrowed money and other almost irreplaceable sums on a first live account. You do not want to be one of them!

Trade this small account until you have a taste and an emotional acceptance for trading real money.

Step 5 – Add Additional Funds :
Once you have trading with a small real account figured out and you are trading profitably, without the stresses of live trading, feel free to add a little more to your account.

Add funds to your live account a little bit at a time. I would suggest only adding more funds when you can grow your live account by 50%. This figure isn’t written in stone, but as your account grows, you will be able to handle an additional chunk added to it.

Don’t throw everything you have into your live account!
Adding additional funds to your account once a month is a good idea. Slow but sure. It seems like a long winded process, but trust me, the slower the better.

You want to habituate to the new amounts. You will possibly find that trading with a few hundred dollars is no problem, but once you get to an account of $1000, things get harder to do.

There is a comfort zone for everybody, but for everybody, this comfort zone will be different. There will be a dollar amount that is comfortable to trade with, but when you cross a certain number, it becomes almost scary. For some traders, that will be the initial $250. For other traders, the comfort zone might be as far away as $25,000. I would prefer you to creep up to yours and allow it time to become natural.

Step 6 – Only Use 1/3 Of Your Fundable Money :
What this means is if you have set aside $5000 to trade with, only fund your account with one third of that… approximately $1600.

The reason you do this is because no matter how good your trading abilities are, I have never met a trader who hasn’t blown out their first live account.
They may not have lost the whole thing, but they at the very least, drop their equity to less than 50%, even as low as 20%. When your account drops 80%, that is a lot of trading you have to do to get that back!

Following this process will hugely reduce the potential for losing your first liveaccount, but the possibility is still there. By funding your account with only one third of your trading capital, you will be able to lose your account and have the funds to keep going and don’t forget Money Management.

You would hate to fund your live account with everything you have only to blow it. This is not a good situation to be in. I know of traders who had to go back to work and re-grow their savings in order to fund another account. This is a poor way to get into live trading.

Remember, trading live is a not just a process of growing your account, it’s just as important to protect your account. Funding your live account with only a third of your available funds protects your initial savings. It’s great to start early in developing a habit to protect your money.

If you do blow your first account, don’t fret, we all did it. Brush yourself off and go back to trading that demo account until you double it. Then repeat the process over. Start small and work your way up. It’s a process that will have you trading a live account profitably and consistently in no time.

Conclusion :
Trading live and consistently making money is the ultimate goal of every trader.
Too many traders jump in with both feet and pay the ultimate price. Losing your entire trading account is something common to many new traders, but it doesn’t have to be that way. Following the steps provided in this short document will ensure you the greatest chances of success.

The 6 steps might seem long winded, but it will be the shortest route to your ultimate dreams and goals as a successful, live trader. And always read about new systems and forex reviews to update your trading.

If you do manage to blow your first live account, go back to step 3 and repeat the process from there. Blowing your account is a big deal, it means something along the way went horribly wrong. There is a strong likelihood you know exactly what happened. You either risked way too much on a revenge trade, failed to use a stop loss and went to bed, maybe opened too many trades at the same time. Go back and trade your demo account, double this again (or at the very least, grow it 50%) to ensure you are back on track.

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Edited by Mr Alex Michel from UK. 
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