Are you already convinced that you will need to trade with a demo account before starting trading in the real Forex market? See how long you will need to trade with the demo account to be able to trade in the real market safely.
How long should I trade with the demo account before entering the real Forex market?
Now that you have studied a lot about Forex, you know that it is better to start with a demo account and not switch to an active account until you are profitable with the demo account for at least 3 months. Of course, you can trade with a demo account for more than 3 months, even if you are profitable throughout that period. But please note that even if the prices are more or less the same, you will probably feel very different when you know that you are risking your money by opening a live account.
Most brokerages offer demo accounts, but be careful because some of them expire after a month. There are some brokers that offer demo accounts that never expire. In any case, there is nothing to stop you from trading demo accounts with pen and paper only, as long as you are honest with yourself.
Therefore, three months or more is the appropriate period to work with your demo account, until you are aware of the effectiveness or limitations of your plan or market movements.
Starting to trade after the demo account
It is a good idea for beginners to start trading long-term strategies using the daily chart, where trades can stay open for days, weeks or even months. Even if you are trading on an intraday basis and using shorter terms, it is still a good idea to let the winning trades run as close to your maximum profit as possible, which can mean keeping them open for more than a day.
But if you have an open position every night, most brokers will charge you a small commission. This is known as a “rollover” and is based on the interest rate they are theoretically charging for borrowing the currency traded overnight. What you need to know is that the rollover will effectively reduce your profit or increase your loss by one or two pips each night. This should not limit you to leaving trades open overnight, but it is something to keep in mind in your calculations and one of the reasons why when you have a large amount of profit on the table very quickly, it is a good idea to withdraw some of the funds . If you are planning to hold on and wait for days or even weeks, the commission will go up even further.