Thursday, December 17, 2009

Making the transition from Paper Trading to Real foreign exchange trading

Assuming that you feel you are ready to delve into the forex market, take a step backwards at the moment and think this through fully : have you got all the understanding that you need? Have you got all of the tools that you need? Have you at least gathered some experience with paper trading?

If you answered 'yes' to all 3 of the questions that we just posed, then you almost certainly are ready to start trading for real.

However although you've taken every preparatory step possible the reality is that there's more to come and the genuine educational process begins from the moment you make your first trade onwards.

For one thing, you're now actually dealing with real money. Your cash. And that is going to prove to feel different from back when you were just making paper trades with virtual money. Now you are really going to be risking something of worth to you, and you are sure to doubtless feel a little nervous.

candidly talking, feeling apprehensive isn't bad, while you be sure not to let it hamper your decision making process. If your apprehensiveness just makes you extra-careful, that's's fine. But if you find that you're 'chickening out' of making trades that you knew were good but had no wish to take a chance on, then you're going to end up having a lot of regrets.

Also, now that you are actually trading cash of your own, when you do make a loss the disappointment factor is also going to be amplified tenfold. Once more, disappointment in itself isn't a bad thing, and can usually help you to make sure that you're not making the same mistake twice.

However if you let every loss that you make get to you, you can quickly find that you're at your wits end and everything that looked to be so easy while you were paper trading suddenly winds up feeling that much more difficult.

All claimed and done, the core point that we are driving at is this : Paper trading and real foreign exchange trading are 2 different ball games. Sure, paper trading is a vital preparation apropos the abilities that you require to play the currency market, but it is still just like a simulation, and doesn't compare to the real deal.

But because you've gone thru that simulation, you must have the talents that you need right there with you, and the single thing that's standing in your way is getting used to the emotions and pitfalls that come as part and parcel of trading for real .

Trust yourself and the experience that you've built up while you were paper trading. Imagine as though you were still doing that, and remember how successful you were at it. Then, try your best to emulate exactly what you were doing previously.

Sure, you might still fail here and there, but in the long term the particular mechanisms of the trades are no different, and so, sooner or later, you'll find yourself starting to profit just like you probably did in the paper trading run.

Once you have accomplished that, you would have successfully made the transition!

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