Why practice trading?
By practicing trading you gain more and more experience. When you practice using a demo you trade just like it’s the real deal. The money you make or lose is fictional, but your results are real. In fact, the results are the same as they would be if you were trading with real money. By practicing trading you can start trading far more successfully.
You get to learn about all the markets and discover the possibilities within the software. This way you can try out all kinds of strategies and tactics. You will find out what works for you and what doesn’t. Eventually the only goal that remains is to start trading profitably.
How to practice trading
You can practice trading by using the demo software of Plus500. With this software it is possible to open positions on all popular stocks but also on commodities like gold. There are a tremendous number of choices so you can trade with a number of different instrument type CFDs.
By practicing, you discover what works for you and what doesn’t. Before you start, I want to give you some tips that will help you trade more successfully. Everyone makes mistakes, but these tips will make sure that you will keep your mistakes to a minimum!
Start trading successfully with just a few tips:
- Always use a stop loss to limit your loss on one position.
- Make sure that there is a favourable balance between the risk and potential profit.
- Don’t risk more than just a small percentage of your account balance on a single position; this way you won’t go bankrupt in one go.
- Don’t invest with money you can’t afford to lose and don’t invest all of your savings.
- Don’t open up random positions; study the charts and ensure your decisions are rational.
- Successful traders take their loss: close losing positions!
From practice to the real deal
Once you have practiced enough, you will be ready for the real deal. The transition from a demo account with play money to a real account with real money can be a big one. Losing real money hits you harder and it can be frightening.
It’s wise to set your goals beforehand and to always use a stop loss and take profit, without altering them later. You only alter them when this fits into your strategy and not because you are afraid to lose some money.