If you have selected a suitable forex trading platform based on the 6 point Criteria and have proceeded to fund your account with the broker, what's next?
Should you spend time paper trading or do you start to trade immediately?
At this moment of time, it would be necessary for you to have a clear-cut strategy or a development plan on your new found "career" in forex trading. Make no mistake, forex trading can be your permanent long term source of income. Treating it as a kid's game where there is no necessity to preserve capital or to create gains is going to bring you to ruins in a short time. On the contrary, if you approach forex trading with some commonsense and with the idea of personal wealth creation, and for some, an online career or your permanent work from home occupation, then you have made a good start.
Now, trading is very much a mind's game.There must be a conditioning of the mind to recognise the real power of forex trading to give gigantic gains and to cause massive losses.There is this need to master the emotions to pull the trigger to trade when you have a nice trade setup going for you with potential good gains. There is also this real need to know how important it is to really pull the trigger to terminate a trade when it is going against the direction of your projection, to cut your losses short and be out of a losing trade.
To this end, I always recommend to novice traders to spend time to study powerful trading setups developed by professional forex traders and to run them through the "simulation lab"...to "paper trade" these setups, until they get into winning positions consistently. This period of paper trading will allow them to get really familar with the various trading positions of prospective profit potential and losses, conditioning them to an almost real life trading environment. Even if you are a veteran trader, you can get back to simulated trades to re-condition your mind when you hit a bad patch in your trades. It will do wonders to frayed nerves for a stressed-out trader who needs some re-conditioning to get back to top flight as a trader.
Where do you get these winning trading systems to paper trade? There is no short cut here. Either you develop them or you learn them from more experienced traders who are willing to share their winning trading setups with you, or buy them off some trading vendors. As a beginner, developing them yourself is out of the question and if you go that way, be prepared for a long learning period and also to pay for your losses learning along the way.
An easier solution is to find a mentor, and learn from him. This can be a paid solution where you engage the services of a professional trader who will look over your shoulders and see you through the trades as you "clone" his techniques. Or it can be learning from a course of trading, or even from a friend who is a successful trader. Always learn from the best.
When will you stop paper trading and start real trading?
Continue to paper trade till you achieve a consistent winning position where you get a good winning to losing trade ratio. Once you reach that stage, you are ready to take the plunge and to start to trade for real with your own money.
What have we gained by walking this route?
Firstly, you have spent time to master the trading setups.
Secondly, you have spent time to master your mindset, and to master your self to pull the trigger.
You have now become a potential "dangerous" trader who can trade on your own for gigantic profits. You have now become a real forex trading machine!
