One perfect method to hone your trading skill without losing a cent of your money is by practising through paper trading. However, there is another perfect method for you to improve your trading skill. Try demo trading!
More than a slip of paper, practice everything in demo trading!
The name itself is self-explanatory. Demo trading is a space for you to practice your trading skills with on a simulated market environment. Funded-trader noted that demo trading platforms are often very similar to proper trading platforms. Hence, you can calculate fees and exact profit and loss performance results using real trading tools. Constant practice with such platform can really help you improve your trading’s accuracy. However, remember that it is only a demo. No matter how great you are trading on the platform, you won’t get any money.
Too much practice can deter your trading skill?
While spending your time to practice through demo trading is really helpful especially to amateur traders, spending an adequate amount of time to practice is also important. Funded-trader mentioned that spending too much time on the platform could distance you from trading’s basis of professional approve to risk management. As a result, it could lead you to the misconception of investment as gambling.
Funded-trader further added that too much demo trading can instead make you a bad trader. How so? When you trade in the platform, you don’t really use actual money. Hence, you start eliminating one of the most important things to consider in trading: the pressure of risking your own money. Instead of using logical trading analysis, you will end up guessing. Watch out!
One more point to note is to prepare your heart and mind upon shifting to real-life trading. One very common case is the high-pressure real-life trading end up startling the new traders. It might be difficult for some people to grasp on reality, especially when their real money is at stake.