Author: Chris Miles

How To Deal With A Difficult Trading Day

Even the most careful and conscientious traders will occasionally have a bad trading day. Sometimes, they may even have a bad trading week. It happens to everyone now and then, in life as well as in trading. If you have suffered a painful trading loss, you may even question whether it is all worth it, and be tempted to throw in the towel.

However, what’s important is how we deal with the situation. Most of the time, a step back, maybe a day or two to get a fresh perspective, is all that is needed. It might sound like a cliché, but when things go wrong, it’s an opportunity to learn from the events, so we can take a better approach next time.

The negativity bias

In psychology circles, the human tendency to dwell on negative events is known as the ‘negativity bias.’ It’s not a sign of personal weakness, but a normal human trait that almost all of us have to some degree. Scientists believe that the habit of keeping negative events foremost in the mind is an evolutionary function which is hard-wired into the brain.

This is because in the past, humans had to remain vigilant for predators and threats to health to ensure their survival. Therefore, hazardous events are foregrounded, while more pleasant or benign events can get forgotten. This is still true to a certain extent today of course: children still sometimes learn from getting themselves into a scrape.

However, as adults, this tendency can have a less favourable outcome, as it can lead us to take failure and criticism too harshly. This can become a real problem for some people, as even events which don’t matter in the long run can loom large in the mind. They may wake up in the early hours of the morning, and ruminate endlessly over the same memory.

There are various ways of breaking out of this negative thought cycle. One of the most effective techniques is to challenge the negative thought, by detaching the facts of the case from your emotions, to try and view it in a neutral light, much like an outside observer would.

Once we have examined the negative thoughts and emotions for supporting evidence, often we find that there is little or none. There may well even be positive elements to the situation, which we have failed to take into account.

It can feel uncomfortable at first to face difficult feelings, but it is much more powerful and constructive to face up to them, rather than keep them locked away, eating up precious time and emotional energy. Confronting the issue head on, rather than the narrative that has built up inside our heads, can bring clarity and a new sense of purpose.

For forex traders, this may be a process of realising that making losses is a normal part of trading, and even experienced traders accept that not all of their trades are successful. A failure is not always an event you should take personally, especially in the world of forex.

If you have experienced a bruising trading loss, and you are still having trouble bouncing back from the experience, maybe even questioning whether the game’s worth the candle, then this can open a door to the next strategy…developing a growth mindset.

Developing a growth mindset

There has been a lot of talk about resilience over the past few years, as we have all lived through some difficult times. Resilience is all about the ability to recover from negative events. Some of this may be down to our natural characters: some people are born fighters, while some people seem to lurch from one crisis to another.

Whether this is down to our upbringing and environment, or our genetics, is a huge topic, and not really the issue on hand right now (although it makes for some interesting reading if the topic tickles your pickle).

What is relevant and interesting for forex traders is that scientists believe that resilience is not a fixed character trait, but something that can be learnt by anyone who is open to the idea. However, this is not simply a version of the old advice about dusting yourself down and trying again, getting back in the saddle, and all the rest of those familiar sayings.

In fact, doubling down on your efforts in the belief that you are showing grit, determination, doggedness, and tough-mindedness, may just mean that you are…well, doubling down on failure. Repeating the same actions over and again in the hope that something will turn out differently can just layer on the disappointment.

Psychologists refer to this state of mind as a ‘fixed mindset.’ It can lead us into a cycle of negative thoughts and actions, which can seem impossible to break out of, as we have previously discussed. The ‘growth mindset’, on the other hand, is all about the ability to look objectively at the problem, and adjust our actions accordingly.

For a forex trader, this may mean taking a look over a trading strategy or journal to identify any elements which aren’t working. If you keep a journal of all your trades and the outcomes (which is recommended to help you revise and refine your techniques and strategies), then try and identify patterns which are common to your unsuccessful trades.

You may notice something about your timings, exit strategy, frequency or volume of trades, for example, which is impacting negatively on your progress. Experiment with a different way of approaching your next few trades, and record your progress.

It may not lead to immediate improvements, but it is better than following a strategy which is not leading to consistent profits, in the hope that things might turn around. Making adjustments based on logic and evidence is the best path towards lasting improvements, both in forex and in life.  

Are you REALLY sticking to your trading plan?

One of the most common causes of unsuccessful forex trading is a lack of a solid trading plan, or the failure to stick to a plan. Even if you are a naturally impulsive person who prefers the inspiration of the moment to forward planning, you still need to follow a trading plan if you want to start taking consistent profits in forex.

The trading plan is all about risk management, and it should be drawn up after you have done as much research as you can into market analysis and behaviour. It should address the basic issues, such as how much capital you want to risk per trade, how many pips you will target in each trade, and what your rules for entering and exiting trades are.

The plan should be referred to for every decision that you make, because otherwise, you will be vulnerable to making emotion-driven choices, which have no basis in considered analysis of the markets.

As we have previously discussed, it may sometimes be necessary to make tweaks and changes to your plan, rather than continuing to repeat an unsuccessful pattern of trading. However, this should be done in an analytical and informed manner, and not based off your emotions, such as a desire for revenge, to make good on a loss, or greed for profits.

This brings us to the next point…

Have you read up on trading psychology?

We have already discussed how fear can lead us to become mired in a sea of negativity, where we become too sensitive to perceived threats. Of course, sometimes we need a sense of fear to stop us making dangerous mistakes. However, in forex trading, an overdeveloped sense of fear can lead to unsound decisions.

It is natural to fear losses, more so than to seek profits. This may mean that you are closing trades too early, at the first flicker of bad news, or on the other hand, entering trades too readily, for fear of missing out on a good profit. Neither of these approaches will amount to a sound long term strategy.

Even more dangerous than fear is greed; the desire to make bigger profits as quickly as possible. It can be intoxicating, giving you an artificial sense of power and control. However, forex trading is all about risk management, and greed is the antithesis of this, leading to illogical and destructive behaviour.

Greed is related to two other powerful emotions which can ruin your prospects of successful trading: revenge and excitement. If your desire to make profits has been thwarted, it can spur you on to take even more aggressive risks in an attempt to recoup your losses. This will lead to poorly thought-out decisions, based on emotion and not logic.

Lastly, the euphoria of success can create a heady cocktail of emotions which makes you overconfident, and take risks which are not supported by your trading plan. To avoid falling prey to any of these emotions, the first step is to acknowledge that we are all human, and we are all prone to them—it is normal, and not a sign of weakness.

If you are having a difficult trading day, don’t beat yourself up. Just step back and step away from your emotions. Review your trading journals and plan if need be, and return to trading with a clearer mindset, and the willpower to choose logic and strategy over instinct.

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How To Foster A Growth Mindset

There are all sorts of attributes and traits that will stand you in excellent stead if you’re keen to pursue a career as a professional forex trader. Some of these you’re sure to already have in abundance and others you may need to work on in order to cultivate them and turn them into strengths that you can tap into as you trade.

And some of these traits will serve you better than others so, if you’re just starting out trading currency pairs, focusing on those attributes that will yield the best results sooner rather than later probably makes good sense.

One of the most important aspects to focus on as a trader, whether you’re new to the markets or are a seasoned pro, is your mindset and overall outlook.

How you approach your trades and how you view your work is absolutely essential and it’s vital that you keep an open mind, allowing yourself to see your weaknesses and vulnerabilities so you know what you need to prioritise and where you need to improve, both personally and professionally.

What is a fixed mindset?

There are two ways to consider human traits such as personality and intelligence… either that they’re set in stone and can never be changed or that they’re qualities we can grow and develop over time.

The former is what we call a fixed mindset and if this is where you’re currently positioned, it’s important to note that it can lead you to make lots of mistakes in many areas of your life, not just trading, and can even give rise to an extreme fear of failure… which will never serve you well on the trading floor.

Someone with a fixed mindset typically avoids challenges when they present themselves and will often give up easily when problems and obstacles get in their way. The belief that intelligence is fixed can see people led astray by their desire to continue appearing smart, rather than taking steps to actually learn something new and develop their skills.

A fixed mindset may also mean you’re unable to take useful criticism or feedback on board and you may often feel that there’s no point in trying… all of which will really get in the way if you’re keen to bring in the big trading wins.

What is a growth mindset?

On the other side of the coin, people with a growth mindset are open to believing that the skills, abilities and attributes we’re born with are simply a jumping-off point, something that can be fostered and nurtured, developed through time, effort and, yes, even struggle and adversity.

Our intelligence levels, our talents and even our personality can evolve and change as we expose ourselves to different stimuli and as we try new endeavours.

But it’s not just about believing that we can improve and develop, it’s also about looking at mistakes as opportunities for growth… and this is absolutely key for forex traders, allowing you to connect your positive outcomes in trading with all the hard work, time and effort you’ve been putting in.

Adopting a positive mindset for growth involves putting in the hard graft and focusing on the right strategies, as well as seeking guidance from others with more experience, all of which will really help you develop the skills you need to enjoy success as a trader.

Ask yourself if you shy away from challenges or if you embrace them wholeheartedly, perhaps even seeking them out so you can upskill and learn.

Do you often find that you’re taking yourself out of your comfort zone? Are you persistent and dogged in your pursuit of knowledge, even in the face of setbacks? Are you able to learn from and take criticism on board?

If so, you may already be well on your way to fostering a growth mindset… which is great from a trading perspective!

How to adopt a growth mindset

The good news is that anyone can change and grow, developing their own growth mindset over time. Just because you have a fixed mindset doesn’t mean that it has to stay that way!

There are all sorts of ways you can foster your growth mindset and maximise your chances of success. It’s all about finding the right route for you, which may be different to someone else’s path but that’s not to say that it won’t be just as effective.

Comparison is the thief of joy, after all, so stick to your guns and see what works for you. Here are some strategies you could find useful if you do want to change your outlook and see how that affects your trading.

Embrace your imperfections

Nobody is perfect and everyone has flaws and weaknesses. As a trader, it’s vital that you acknowledge your failings and embrace your imperfections simply as attributes that make you unique.

That’s not to say you can’t prioritise them and work to drive improvements in certain areas… but ignoring them and pretending they don’t exist will never see you get where you want to be.

Find the gift in criticism

While it can be hard to hear, there’s generally nothing inherently bad about criticism. In fact, you can use it as a tool for good if you’re able to see it for the gift it is and be open to hearing new suggestions and perspectives.

Believing that you’re perfect and always right will really see you flounder in forex trading and this could be why you’re not raking in the wins right now.

Practise patience

The formula for success is time plus application and it may well be that you need to be patient with yourself as you get to grips with trading. It’s not easy, it can be challenging and it can reveal all sorts of troubling aspects about you and your lifestyle that you may not enjoy being confronted with.

Don’t expect to master trading (or anything new) immediately. You’ll need to work at it, be patient and continue forging ahead, even in the face of failure. This is the path to improvement and self-development.

Be willing to make mistakes

Risk-taking is an inherent part of forex trading and if you’re risk averse, you’ll likely never make it big as a trader.

Accepting that you’ll make mistakes while trying out new ways of working or new ways of approaching old subject matter can make a huge difference to your trading skills and, before you know it, you’ll have learned all sorts of lessons… and are a better trader as a result.

Trust the process

Adopting a growth mindset is all about the journey, rather than the destination. Of course, you need to keep your eyes on the ultimate prize (which, in this case, is forex success), but the process is just as important and trusting in it will inevitably see you reach your end goals.

It doesn’t matter how long it takes for you to get there, after all. All that matters is that you get there eventually at some point in the future, which is why focusing on the process and being fully engaged in the present moment can help drive results.

Believe in yourself

Negative self-talk will never get you anywhere and if you want to develop your growth mindset, you really need to believe in yourself and that you can do it.

And of course you can do it! Practising positivity and speaking to yourself kindly can work wonders on your outlook and allow you to tap into capabilities and attributes that you may not even be aware you have.

Practise determination

Nothing worth having ever came easy and you should certainly not expect your journey into forex trading to be a simple one without any twists and turns. You’re sure to feel frustrated and overwhelmed at times and this is where determination will come into its own.

Step away and take a break if you need to but if you give up, you’ll never get where you want to be… so keep your end goal in mind and do all you can to achieve it, even if it takes you years.

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5 Top Forex Trading Podcasts To Check Out!

Knowledge is power, or so they say – and this is certainly the case in forex trading and for anyone who wants to turn their interest in currency pairs into a lucrative career.

The good news in this regard is that there’s a huge amount of information out there and a wealth of resources you can turn to that can help you cement your knowledge and develop your skills, giving you all the tools you need to stop seeing trading as a hobby and start seeing it as a profession.

Podcasts are incredibly popular these days and not without good reason. You can find a pod production for any and all topics under the sun – including forex trading!

Whether you’re just starting out as a trader or whether you’ve been doing it for years, it’s always useful to hear new perspectives, ideas and concepts and there’s always a lesson or two to be gleaned.

We’ve counted down some of the best and most interesting podcasts out there that focus on forex as a topic to help get you started. You may well come away with all sorts of strategies to consider and plans of attack for the next time you sit down to trade. Enjoy!

Desire To Trade

This is a great place to start for anyone new to trading and who is feeling a little overwhelmed with it all. Podcaster Etienne Crete is himself a forex trader and has been trading full time since 2017, so you can bet he knows his stuff and can help shine a light on the subject for you.

The podcast itself has been running since 2011 and there are hundreds of episodes to listen to, so it’ll keep you quite busy. It might be worth listening to a couple and seeing what lessons you can find to take away and apply to your trading, rather than sitting through lots of them all at once.

Too much information in a short space of time can mean you don’t really learn anything so take your time and trade alongside so you can apply your newly acquired knowledge and progress more effectively as a trader.

What’s particularly great about this podcast is that it’s designed to help people learn from the very beginning, covering all the basic concepts and trading psychology but at your own pace, so you can make sure you fully understand everything before you move on to the next episode.

Topics covered include great pieces of advice for new traders, how to make a living trading, risk management, professional trader secrets and lots, lots more. There are also lots of interviews with other professional traders so it really is an information goldmine that could prove particularly beneficial for you.

Chat With Traders

Chat with Traders is arguably the best and most well-known of all the trading podcasts and it’s a great one to choose for traders at all levels, so even if you have been doing it for a while you’ll likely find it of use.

It was set up by self-made entrepreneur Aaron Fifield and you can hear him on many of the episodes, but he recently departed the podcast arena and the series is now produced and co-hosted by Tessa Dao and Ian Cox (who’s been a trader for 27 years!).

Here, you’ll find loads of interviews with experienced traders, as well as those who are only at the start of their trading journey, so who knows what you’ll discover as you browse through the various episodes.

One of the most recent episodes features Jason Shapiro, a professional trader for 30 years, who explains how he finds his trading opportunities by monitoring weekly trader reports and keeping an eye on news events and media commentary.

If you’ve been feeling a little scattered with your thinking and as though you need some focus to guide you towards the path to success, this could be the podcast episode for you. It can be very easy to feel overwhelmed when faced with so much information that you need to digest and analyse in order to make good decisions… but this podcast could help you do just that.

The Trading Coach

Run by Akil Stokes, professional forex trader and one-time money manager and trading coach, the Trading Coach podcast features weekly episodes for you to tune in on, with topics covering everything from trading and investing to entrepreneurship and personal development.

There are an impressive 700 or so episodes so you certainly won’t be bored and you’re sure to find a fair few casts that speak to you and where you currently are as a trader.

If you head to Stokes’ YouTube channel or Twitter platform, you’ll find lots of charting lessons and trading tips, so that could prove useful as well but the podcast covers what you need to do for trading success in more depth… and you’re sure to find a few life lessons thrown in there for good measure, as well!

The expert puts particular emphasis on the psychology of trading, as well as how to adopt a growth mindset, the importance of health and fitness, and all the other aspects you’ll need to prioritise if you really want to make it as a successful trader.

This really is key to take on board for those who do want to turn trading into a career. It will be difficult to really see the wins you need to achieve this if you aren’t motivated and dedicated in other areas of your life.

It may be that you need to make a few lifestyle changes here and there, which can be tricky to accept… but these podcasts can definitely help you ask yourself the hard questions so you can grow as a person – and as a trader.

FX Talk

As we all know, keeping a close eye on the news and what’s happening around the world is pretty essential for trading, as currency fluctuations can be affected by all sorts of goings on.

If you’ve been struggling to get to grips with this aspect of trading, the FX Talk podcast could really help point you in the right direction, covering anything and everything about the global currency market.

It’s produced and presented by three financial market analysts/leading Bloomberg forecasters, so you know you can trust the information that’s being presented and use it to make the informed decisions you need to make as you trade.

Each episode is 20 minutes long, giving you quick financial market updates that are easily digestible. It might be a little difficult to get your head around at first but you’ll soon have the jargon down and you’ll soon see how you can take all this information and analyse it effectively to find new and potentially lucrative market opportunities.

The forex market is largely driven by macroeconomic factors and these will impact the decisions you need to make, since they’ll influence the value of currency at any one time.

A country’s economic health can change incredibly quickly based on what’s happening and current affairs, so keeping abreast of it is essential if you’re to make wise moves in forex… and this podcast series can certainly help you where this is concerned.

Two Blokes Trading

This particular podcast has more than 650,000 listeners tuning in on a regular basis, which suggests it could be a great one to check out. It will provide you with an in-depth look into the world of financial markets, covering everything from what makes someone an elite trader to why those new to the art consistently make the same mistakes.

All markets are analysed in this podcast, not just forex, so you’ll glean information on the likes of crypto, stocks, indices and commodities, as well… perfect if you’re looking to branch out into other areas or just want to further your knowledge as far as you can.

Not only that but the series also features some interesting interviews with some of the greatest investors and traders to have made a name for themselves playing the markets, which could also help you up your own game, finding out what their strategies are and what processes they focus on to help drive them onto success.

If you start from the very beginning, you’ll hear the origin story of the two blokes – Tom and Owen. You’ll hear about how they learned to trade and what a journey they’ve been on, although later on in the series you’ll be introduced to Brandon, another successful trader who ultimately takes over from Owen later down the line.

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How To Increase Your Self-Esteem

When it comes to forex trading, there’s a lot that can affect your performance on the markets and, perhaps surprisingly, much of this comes down to how you’re feeling as an individual within yourself and what your current state of mind is actually like.

As we often say, a happy trader can be a more lucrative trader so if you’re not feeling tip-top for whatever reason, you may want to step away from the currency pairs and take a little break so you can turn your attention inwards and see if there’s anything going on emotionally and mentally that could impact your trading performance.

Self-esteem and self-belief encompasses your own personal sense of worth and value. A lack of self-confidence, identity and sense of belonging can really have an impact on your motivation, your health and wellbeing and quality of life… all of which will inevitably filter down and you’ll see your trading career start to suffer as a result.

Interestingly, from a forex perspective, if you have the opposite problem and your self-confidence levels are too high, you could also start taking more losses than wins as you trade. It’s all about striking a healthy balance and walking that fine line between confident and cocky when you’re on the trading floor.

Why do we need good self-esteem?

Self-esteem can have a significant impact on your decision-making skills, your mental and emotional health, your sense of wellbeing, your relationships, your motivation… it has a lot to answer for, which is why it’s important to prioritise it and work towards maintaining a happy, healthy and positive view of yourself.

If you’re not sure if you have good self-esteem or not, it’s perhaps time to ask yourself some of the harder questions.

For example, do you struggle to maintain healthy and happy relationships with other people? Do you have a solid understanding of what you need and are you able to express them? Are your personal expectations realistic? Do you have a deep understanding of your particular skill set and attributes?

If you find it hard to express your needs, focus on your weaknesses rather than your strengths and frequently experience the likes of worry, self-doubt and fear, it may well be that you’re struggling with self-belief.

If you have low self-esteem, you may well feel less sure of yourself, doubting your ability to make good decisions. You may also feel demotivated to tackle new ideas and activities because you don’t believe you’ll be able to achieve what you want.

For trading, this spells serious disaster, as decision-making is absolutely key to trader success and if you don’t have confidence in your own thought processes, you’re sure to flounder… and probably relatively quickly.

Low self-esteem also has the potential to lead on to other issues, such as anxiety disorders and depressive disorders, which can make it even harder to keep on track with your goals and maintain healthy relationships.

Additionally, people with healthy levels of self-esteem typically don’t spend much time ruminating on past negative experiences which, again, will come in really handy if you’re a trader.

Losses are inevitable when you trade and it’s all about how you react to them when they do crop up that will determine your level of success. You need to be able to take any and all lessons away from negative experiences and then let it all go without dwelling on it so that you’re able to progress and can react to similar situations more effectively in the future.

Having good self-esteem can really help you achieve your goals in trading and in your personal life because you’re better able to navigate your way through since you have the confidence in yourself that you can do it no matter what.

What if you have too much self-esteem?

You might think that you could never feel too good about yourself but bear in mind that it’s actually quite easy to cross the line between high self-esteem and narcissism… and this could be just as bad news for your trading career as having low self-belief.

Again, ask yourself some of the harder questions to see if your self-esteem might be bordering on the higher side. Do you think you could be preoccupied with being perfect, for example? Do you always have to be right? Do you think you’re better or more highly skilled than other people?

Excessive self-esteem can be just as disruptive to your trading as low self-esteem and you’re likely to be overconfident and overestimate your skills and abilities… which could see you making some serious errors of judgement.

Believing that you’re perfect and that you can do no wrong can also make it difficult to maintain a level of professional success as a trader, since you may well believe that nothing needs to change, that you have no faults and that you make no mistakes.

Adaptability and the ability to keep an open mind, while being sufficiently self-aware, are traits that all the top traders will have in abundance. There’s no place for arrogance in trading and if your outlook is such, you’ll find that the markets soon put you in your place.

How to increase your self-esteem

For those of you who believe you may have low self-esteem, the good news is that there’s a lot you can do to change how you perceive yourself, boost your confidence and give you more belief in your own abilities.

Being more aware of your negative thoughts can really help you devise lots of coping strategies and enact real and long-lasting positive change in how you experience stress and pressure throughout your life.

Once you’ve recognised your cognitive distortions, you can start taking steps to get a handle on them. Journaling is one of the best ways in which you can examine your inner processes – and, again, this is something that the most successful traders will engage in on a regular basis, so it could be a great place to begin where your self-esteem is concerned, as well.

Perhaps start writing down any negative thoughts and comments when they pop into your head so you can go back and analyse them later when you’re feeling more centred mentally and emotionally. Or you could wait until the end of the day to summarise what’s happened and how you feel. It’s all just about finding the best way forward for you.

Another really effective way to boost your confidence and self-esteem is to start using positive affirmations on a regular basis. Talking kindly to yourself and giving yourself praise repeatedly over time can really help to challenge any negative thoughts you might be having, helping you to manifest success in your own life.

Examples of positive affirmations include statements such as: “I am brimming with energy and overflowing with joy”; “I am the architect of my life”; “My body is healthy, my mind is brilliant, my soul is tranquil”; “I am superior to negative thoughts and low actions”; “I possess the qualities needed to be extremely successful”.

Speaking words and phrases such as these out loud on a regular basis can really help give you the strength you need to see your potential and realise your dreams and ambitions.

Manifestation is a bit of a buzzword at the moment and positive affirmations form an important part of this, so it could certainly be worth investigating further if you do feel as though you’ve hit a bit of a stumbling block of late.

And finally, one of the very best ways to go about building your self-esteem is to zero in on what you’re best at and work towards developing your skills and abilities in these areas.

Finding opportunities that really cement and accentuate your core competencies will show both yourself and others that you are worthy, that you are competent, that you are to be valued… and that you’re going to do all you can to achieve your dreams and do what you love.

How to maintain self-esteem as a trader

As with anything in this life, self-esteem is not an ever-fixed mark and it can be affected in a million different ways and by a million different sources – particularly when you’re trading forex, as the market is a particularly volatile one, with many different sources of potential stress and conflict.

You can help give yourself the confidence and self-belief you need to see prolonged success as a trader by knowing your trading style inside out, sticking to your trading plan, working out your risk tolerance and focusing on the process, rather than the outcome itself.

If you’d like to put your skills to the test, we have a range of forex trading programs available that could be right for you and your current trading level. Take a look and see what you can find.

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6 Signs You’re Ready For Live Forex Trading

New forex traders are advised to trade with a demo account before moving into live trading. This is because it is a chance for you to get your feet wet without the risks associated with real time trading. Even if you are confident in your trading strategy and well versed in forex trading psychology, it’s still important to test the waters.

Impatient personalities might now be thinking, this is not for me, I want to get straight into the real money-making business. If this sounds like you, here’s the thing: even experienced forex traders use a demo account when they switch between platforms. This is because each one has different features, and it’s much quicker if you know your way around first.

No matter how well you think you will handle your first trades, a simple keying error, or delay while you work out how to access certain features, could cost you money. To mitigate against these risks, it makes sense to familiarise yourself with the set up. Demo accounts also give you the opportunity to see how sound your trading strategy really is.

All successful forex traders tweak and revise their strategies from time to time, and they will generally test these out on a demo account before going live. They may also use a demo if they want to trade with different currency pairs to their usual sphere. The same goes for people who have experience of trading other commodities.

So, you get the message, using a demo account before your first live trades is a no-brainer. The next question is, how long should you spend demo testing before going live? Like many things in life, there is no definitive answer to this question. A lot depends on how much time you have to devote to your trading, and what issues crop up during your demo period.

Here are six signs that you are ready to handle the real deal.

You have a consistent win rate

The most important factor to track your success comes down to your win rate. It’s necessary to use some method of recording your progress, preferably in a chart or graph which will present the data visually, so it can be read at a glance. Many trading platforms will have features which allow you to do this easily.

The aim is to reach a level where your profits are consistent enough to mitigate against any losses. Remember that no trader makes a win every time, and making the odd loss is all part of the game. However, if you are not making more than you lose after two or three months on your demo account, there would be no point taking that into the live sphere.

Consistent losses do not mean that you are doomed to fail, but it is a sign that your trading strategy needs a rethink. Which brings us onto the next thing…

You have a proven trading strategy

Even if you have managed to make some profit, if this isn’t backed up by a solid risk management strategy, you are not ready for live trading. Almost all successful traders win by working a strategy that gets them results, and following the rules rather than taking chances.

Having an eye for a good setup is useful of course, but this will at some point come unstuck without a risk management plan to back it up. As recent events have proved, sometimes the markets hit an unforeseen patch of turbulence, which could send your account into meltdown without a solid risk management strategy.

It’s important to work out what your risk tolerance is before you start trading, even on a demo account. Even when you are trading with no real money at stake, trade like you mean it: this is the only way to find out how well prepared you are for live trading.

Make an assessment of your income, outgoings, and savings, and work out how much money you are comfortable losing in the worst-case scenario. Remember, forex trading is as much about controlling your losses as it is about making profits.

Your head rules your heart

Forex trading call for more than a good trading strategy and risk management plan: it also requires the ability to weather difficult and high-pressure situations without losing your cool. You might think of yourself as a well-balanced individual who doesn’t get riled easily, but live trading can be a whole new ball game.

Reading up on the psychology of trading, and learning a few mind management tools is important to help you avoid falling into common pitfalls which trip up many an unwary new trader. Trading draws on our most primal human emotions: fear (of making losses) and greed (for chasing bigger profits).

These powerful emotions can manifest themselves in multiple behaviours which will impact negatively on your performance, such as panic, anger, timidity, overconfidence…you get the idea. Experienced traders learn to manage these emotions, and focus on following the rules of their trading strategy.

Losses are an inevitable occurrence, and so are profits. The key is to always balance risk and reward, so that in the long run, your profits consistently outweigh your losses. Sure, it’s fine to bask in a glow of satisfaction when you are winning, but be careful not to let this lead to overconfidence, which could tempt you to lower your defences.

Similarly, if you are successful straight away, don’t become discouraged. Most traders go through a rocky phase, or even two or three, before they hit on a strategy that works for them. Accept that it is all part of the game, and take a dispassionate look at your records to see where you might be going wrong.

Trading with a demo account gives you the opportunity to build up phycological resilience and helps you find out how good you are at keeping your cool under pressure, when your emotions might be running high.

You have traded through a change of season

Many novice forex traders overlook the fact that the markets move in different ways depending on the time of year. Having some exposure to different trading conditions over a period of at least two or three months will mean that you are in a stronger position to deal with changing market sentiments in your live trading account.

For example, holiday periods will always impact on the forex markets. This is especially true of the events which are celebrated in the US, because the US dollar is the most influential currency on the forex markets. So, the run up to Thanksgiving, Halloween, and Christmas, will always see an increased demand in consumer goods and perishables.

This will affect commodity prices, consumer spending, business and retail confidence, seasonal employment rates, and so on. The weather also impacts the forex markets; in summer, tourism and travel increases, and therefore demand for petrol and diesel. Some consumer goods will always be seasonal, such as outdoor furniture and gardening tools.

Remember that curve balls can sometimes disrupt seasonal patterns (e.g. pandemics and unexpected budget announcements), so using a demo account will give you a greater sensitivity of how all these things create different trading conditions.

You are not tempted to overtrade

New traders are often keen to try and take every possible opportunity to make a trade. However, this can lead to hasty decisions which were made for the sense of making progress, rather than because there was a genuinely sound trading opportunity. Part of the skill of forex trading is learning the patience to leave well alone until the right time.

Having a reasonable demo account period will help you to build up discipline to know when to hold back. If you do find yourself making too many trades, set yourself a daily limit and stick to it. Using stop losses and taking your profit limits can help to maintain an orderly trading system.

Make sure that you have a daily routine worked out to back up your trading strategy, to help you develop the right habits and mindset for forex trading. This is true whether you are a part time trader, fitting it in around a day job, or making a go of full-time trading.

You have sufficient funds

Forex funding is available through regulated brokers which allow you to open an account with relatively small amounts of capital. However, it’s important to trade within your means, otherwise you are likely to find trading a stressful experience, which could lead you into emotional burnout and financial difficulties. Traders may also want to get funded with a prop firm if they believe in themselves. 

You should be comfortable with your broker platform or prop firm, and understand how leverage, slippage, spreads, and all the other transactional and financial details operate. The demo account is a chance for you to work out what costs are involved, and if you have the budget to withstand them.

If you can answer yes to all of the points above, it is likely that you are ready to launch yourself into the exciting world of forex trading for real. As a disclaimer, this is general advice, and several factors could influence your decision about when to go live. Some will spend two or three months on a demo account, and others may need a year.

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