Trading PsychologyJanuary 5, 2013 7:37 pm Psychology
All traders (successful and unsuccessful) can attest to holding on to losing trades for far too long for no other reason than the “hope” that they become positive again. This is otherwise known as being too greedy.
Alternatively, the fear of taking profits too early or closing at a small loss when they can potentially be profitable is also another emotional response that needs to be adjusted. Good traders strictly follow a complete trading plan that incorporates money and risk management, entry, exit rules and do not let emotions influence their trading.
When do I move from demo to a live account?
The important move to using a live trading account rather than a demo trading account is a question that is often asked by many new traders. Most important is that you have a strategy in place, once you have become comfortable with a strategy or a few strategies that you have tried, you are encouraged to move to a live trading account.
As great as demo accounts and “play money” is for learning, all too often an emotional detachment is developed to the trading loses with play funds and you will never develop the keen senses to close out losing trades. It’s all too often that serial demo users lose their account balance and continue to deposit remarkable sized amounts of funds. In reality, $100,000 is very hard to replace for most people.
Once you feel you have a comfortable grasp of strategy, control over your emotional misgivings to trading Managed Account, you can begin your live trading with read funds and expect real returns in profit.