Some may say it will take about 6 months, some choose to repeatedly go back, some even suggest to ignore it completely. What is the right answer when it comes to the right duration in demo trading?
Before trading forex with a live account, you need to use a demo account irrespective of the strategy or technique you will be using. Whether it is price action, technical analysis, fundamental analysis, or some other methods, trading a demo account is crucial in determining the best way to approach your forex trades.
The question a lot of beginners tend to ask when they are about to trade with a demo account is how long will it take? The truth is there is no definite answer to that because it varies from one person to another.
Why Demo Account?
Trading with a demo account is a good way to establish your trading strategy, mindset, and risk management strategy while also identifying your weaknesses so that adjustments can be made. Once you have a solid foundation in backtesting the trading strategy you intend to adopt, you can open a demo account with a forex broker and then use virtual money for trading indefinitely as a demo account does not usually expire.
A demo account will allow you to get a feel of what the real market looks like before you invest your funds. When using a demo account to trade, you are likely to face a number of unexpected challenges such as discovering that you are only able to trade on certain days or for specific hours during the day, while noticing that you are usually too tired to trade during nighttime hours
You may also realize that you have established a complex alert system that notifies you when to trade. Or, you may end up discovering that you are yet to fully come to terms with how stressful trading can be.
This is why trading with a demo account should be taken seriously even if real money is not involved. It will allow you to polish and fine-tune your trading attributes which will then set you up firmly by the time you start trading a live account. Taking the time to observe the challenges and complexities you have to face while demo trading will allow you to determine how trading will fit into your real-life schedule. This way, you can be well-prepared before you open a live trading account.
It Depends on the Strategy
The length of time that a trader will need to trade a demo account will partially be determined by the time frame that such a trader will adopt.
For instance, position traders who maintain trading positions in the forex market for weeks or months will obviously need to spend more time on a demo account than intraday traders who only hold trading positions for hours or days. However, even if the trader is interested in intraday trading with very short time frames such as scalping, they will still have to trade on a demo account for a minimum of a few months before opening a live account.
You might be wondering why it is necessary to use a demo account for an extended period, especially if you will only be using a trading strategy that involves a short time frame. The truth is that using a demo account to trade goes beyond ascertaining the success quotient of a strategy in a live market (although it is a major part of it). This is because there is also the aspect of getting to know who you are as a trader.
Once you have figured out the necessary aspects of trading by generating results on the demo account with consistent profits, then you may be ready to transition to a live account. The recommended time frame to spend on a demo account is about four to six months of consistently generating profits. At the very least, you should spend two to three months trading a demo account before operating a live account.
The good thing about the demo account is that even after you transition to a live account, you can always come back to it for re-evaluation if things do not go as planned once you moved to a live account. This is a common trend among forex traders as every now and then, they go back to the demo account to make adjustments to their trading strategies in an attempt to get better results in the live market.
If you have difficulties in looking for the right platform to demo trade, here are some of the best-recommended ones in the market.
Dec 24 2022
For me, the trading period on the demo account is 6 months. Based on my experience, I have been demo trading for 6 months to make sure my trading strategy is beneficial to me. It also takes time to find a trading system that suits you. 2 months to find the best trading system, 4 months to try to apply it, you can reap the benefits of narrow targeting. But that's based on my experience, others may differ.
Feb 26 2023
Enzo: I think 6 months is not enough. I think it will take at least 8 months to a year. Because I think a forex strategy should be proven in all market conditions during a swing or during a sideway. You may or may not agree, but for me it's not about experience level, it's also about testing a strategy that takes time to prove itself.
And I think the longer you stay in a demo account, the better you get to know the forex market itself. You can switch to a live account when you are ready
Feb 26 2023
Jamal: I think there are different views on the trading period on a demo account. In short, I agree with the author. He has four types of strategy trading to choose from. Scalping, day trading, swing, position trading. All of these trading requirements vary greatly depending on the trading hours. Scalping is done in minutes. Day trading lasts only one day. Swing trading, on the other hand, can take days or even weeks. And position trading continued for weeks and months.
The key to stopping a demo account and running a live account is having a strategy that works. The problem is that it takes time to prove a strategy. As I said earlier, proving if a scalping strategy works can be quick as it can be done in minutes. It may only take 2-3 months before you are ready to trade your scalp on a live account, but if you want to prove if your position strategy is perfect, it will take weeks or months, so it can take up to 6 to 6 months. It may take a month or more.
Jan 1 2023
I think that demo is a great tool for beginners to form and test their trading strategies or trading systems. Most of people think demo trading is useless. Because there is no actual money involved for psychological trading skills. But I argue that demo should be treated at an ideal situation for ideal performance. So that in the actual live trading, beginners should aim to performance as good as their demo trading performance.