Ok... this is one of the safest and simplest technique that I always use.
Demo account is a demo account with virtual money. Live account is a real account with real money. Don't get confuse.
The strategy here that I would like to share is to make your demo account as your front liners or human shields in the trading battle.
Normally in my day to day trading, especially prior to London Open, I seldom have a clear idea on what the market momentum is for today, though sometimes the trend is clear. If you don't open any position, you can hardly appreciate any of the movement that the market make as it is not precisely reflected in your view.
So, the trick here is more on safety and I know some would disagree with me but hey, it works very well for me as you must remember that somehow trading is very much a game of psychology.
Ok. Unless you are really sure with your trade positioning, then by all means do it with your live account. But the point here, at times we couldn't resist to open a position but at the same time we are not really sure on whether to go either long or short. So how do we deal with this?
Open it in your demo account and see how it goes... simple. This is just to fulfill your trading desire that may not be profitable if you do it with your real account.
If the position (say you go long) seems giving you a message that your trading idea is good, then just duplicate the position in your live account. Otherwise, just wait and see. You will feel very much relief for not opening that position especially if it doesn't go in your favour. Yes you may miss a few pips ahead but it is worth it in order to reduce your actual risk.
The actual point here that I would like to share is most of the time, we do like to be in the market when the market is thin and slow moving. To do this with our real account is simply like gambling without really knowing on what the market will actually do today, especially prior to London open onwards.
Hence, in order to satisfy our trading hunger, the best way is to start with your demo account, especially if you have a robot that you may not trust 100% (like me). Seeing the performance of these open positions in the demo account will generally provide you with some ideas and feels on whether you should take the same position, do the reverse or simply wait. Hence rather than hoping, you will trade better with open eyes and clear thinking, by visualizing those open positions as your real positions.
Sounds like a mind game right? The fact is... it is...
It is like putting your ghosts in the market first, and come for real later... that gives you better edge over the others.
Trust me, by doing this... it saves me a lot of bucks. Especially when the planned trade did not go as I expected.
Have A Nice Weekend.
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