Test your strategy before you trade live

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Your strategy is the tool that you can use to make your profit growing in your account. Most people develop their own strategy but they cannot get success. Many people may not understand what wrong with their strategy is as they have developed it by themselves. They practice the strategy thousand times in live markets and still, they do not get any different results. You can start to think that these people have the curse of Forex God in their career but it is not. This is not something supernatural but it is because if your unwillingness to test their strategy in the demo trades.

Demo accounts are given by brokers for some useful purposes. If you only trade them, like playful markets, you can never go to be successful. Many people do not realize the importance of testing the strategy in demo trades before they are used with the live trends. They take the strategy directly to the live markets and it becomes a disaster. The trends do not favor them and they cannot even close the strategy with losses. It sometimes sweeps their account clean and they have to invest again to start trading. Remember this is not your practice match where you will get a second life. One wrong trade and you are done with your investment. This article will tell you some of the reasons you must test the strategy in demo accounts.

Backtest your trading strategy

The new traders don’t understand the true risk factors of currency trading profession. They are always taking a huge risk and losing a significant amount of money. But just have a look at the professional Aussie traders. They are always assessing their trading system prior to live trading the market. You don’t need to risk any real money to backtest your system. You can use the Forex trading demo account and trade the market with a virtual dollar. Many experienced traders often demo trade the market only to fine tune their trading strategy. Never trade with a trading system which is not tested in the demo environment.

Does your strategy actually work with the trends?

It may be surprising to sound but it is true. Most of the time, traders use the wrong strategy with the wrong trends. They did not understand at first but when they do, they have lost a huge amount of money. We do not want the same happen to you and that is why you need to test it before you are trading live. The demo accounts are equipped with everything that a live trading platform can offer. Do not feel that you are letting yourself down and you are underestimating yourself. Confidence is good but overconfidence can be risky. You may not know how trends change in this industry within hours. Before you are risking your money, know if this strategy actually goes with your selected trends.

Strategies have flaws, they need to be corrected

The strategy that you have got from the web is not perfect. It is in the form that everybody is getting and it needs to be polished, practiced and tested before it is ready for you. Consider the strategies as diamonds that need to be cut and polished before selling it to the public. The more you test your strategy, the more you can perfect it.

Learn from your mistakes

Trading is nothing but finding the best trades in the higher time frame. In order to become a profitable trader, you need to follow a trading journal. During the weekend asses, you past trades since it will help you to identify your mistake. Mistakes are often considered as the best tools to develop your trading system. Never let your emotions to trade the market on behalf of you. Always use rational logic and execute trade along with the trend. Limit your risk in each trade to protect your trading capital.

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