Your Greatest Enemy In the Forex Market

You’ve done it. You traded your demo account profitably. Now you open up a live account, put your heard earned money into it and then, you lose. It doesn’t make sense does it? There is no difference between trading demo and live, it’s the same right? Obviously, it isn’t.

What is the difference between demo and live trading?  Ironically it is the fear of losing your money that ensures that you will lose it. Think to when you traded a demo account, sure you lost trades and you won some, but this never stopped you. Eventually you found what worked for you in the market and began to become profitable after time. But there was no fear, no matter what you could always open a new demo account.

It is different with a live account. Your money is at risk this time, and it scares you. There are ways to help eliminate the fear aspect that is keeping you from being successful.

1. Rules. At some point while demo trading you had to have formed rules for trading. Stick to them. If they helped your demo account grow, they will help your live account grow. Rules help keep emotions like fear from controlling your trades.

2. Start with a small account. If you find the thought of losing your money terrifying, then don’t trade that money. Instead open a real account, and trade micro lots. And remember never trade money you cannot afford to lose.

3. Your money is already gone. This goes along with the second point, treat your money as if you will never get it back. If you cannot stand not having this money, then do not trade it. A simple change in perspective can help eliminate fear in the market.

4. We learn more from losses then wins. Mistakes are how we learn, as long as you learn from a loss then you have gained something invaluable. Don’t be afraid to learn.

5. Go back to demo trading. Sure you can make money but do you know how? Understanding how you trade is one of the key elements to successful trading. So trade in your demo account paying close attention to how you decide which trades to enter. When you know how you make good trades there is nothing to fear.

Eliminating fear is one of the most pivotal steps you can take toward becoming a successful Forex trader. Just as in the rest of life, if we let fear take hold it is virtually impossible to make a correct decision.