This is a continuation of our post on how to profit from your demo account.

2. Never risk money that’s not truly “fun money”

As I discussed before, never trade money you really need for anything else in your life. If you want to trade the markets you will have to have RISK CAPITAL….just like if you start any other business you will need capital, so remember that Forex trading is a business. The reason you made money on a demo account was because you felt no emotional attachment to your trades since there was no money involved…you can emulate this feeling by only trading with money you really don’t care that much about.

3. Loosing in One trade means NOTHING

In demo you assign no significance to any one trade because you do not have real money at risk. In real-money trading you do have real money at risk (obviously). So, to emulate the feeling of trading a demo account, you will need to reduce or eliminate the significance you place on any one trade by only risking an amount of money you are totally OK with losing. Before you enter any trade ask yourself out loud “Joe, are you OK with losing this amount”, answer honestly and only pull the trigger if your answer is “yes”.

Also, remember that your trading success is the result of a large series of trades. If you are winning 50% of your trades you could lose 50 in a row out of 100, but if you’re maintaining a risk reward of 1:2 or more on all your trades, you are still going to make a lot of money, even in the face of having 50 losing trades.

4. Know-what-you-are-doing

Know what you’re doing before you risk your hard-earned money (time) in the markets – I can’t even tell you how many emails I get from people who clearly have no trading strategy under their belt and who clearly have no idea what they are doing, but are already trading with real money. Simply put, if you have not mastered an effective trading strategy like price action, you are simply doing yourself a disservice by risking your hard-earned money in the markets. If you are still unsure about what you are looking for in the markets, or about what your trading edge is, go back to the “books” and stop trading real money.

5. Pre-plan everything

Finally, perhaps the “glue” of heading-off the emotion of real money trading lies in pre-planning all your actions in the market as much as possible. Certainly, there will be times when you need to employ discretion, mainly in exiting Forex trades, but by and large you can map out what you are going to do before you enter the market, therefore there are no surprises and no knee-jerk reactions to whatever unfolds after you enter a trade.

The only real tool that you have in defending against the emotion of having your real money on the line is controlling yourself BEFORE you enter a trade. Do not jump into the market like a machine gunner, instead, learn to trade Forex like a sniper. This concept of “sniper trading” is the primary trait that led to my success in the markets and it essentially means you need to preempt your trading entry, be precise in executing it, and then “strike” with confidence; don’t hesitate if you know what you are looking for. Trading like a sniper is the most significant factor that led to my success in the markets, and as a result, it is one of the most important things I try to drill into my students’ heads in my Forex course. Maintaining a professional trading mindset, remaining patient and trading only the ‘high probability’ trading signals that form on your charts will enable you to make a seamless transition from demo trading to live trading.