OK, it is certainly neccessary. Because it is appropriate to understand not only the functions of trading platform but mainly try all functions, methods for opening and closing the trading positions, possibilities of working with charts and technicall analysis, before you start your trading in conditions of Live accounts. It is certainly appropriate to learn trading on the Stock Exchange with application of the Principles for Professional Demo Trading and develop appropriate habits for your reactions on the Stock Exchange for various situations.
Furthermore, you should certainly study our recommendations for safe and profitable Trading. This is a fundamental knowledge of our trading practises, which should have appropriate attention. You should apply them into your activities on the Stock Exchange.
It is neccessary to realize the fact, that we work with the real money on the Stock Exchange. Possible bad habits from Demo trading or ignorance of real market conditions surprised many beginners. Painful preparation and training makes for easy ultimate performance. .. This saying apllies completely different on the Stock Exchange. Beginning traders may get feeling, at the beginning of their trading, that everything is different than it was when they were playing on the Demo. Everuthing that went well is suddenly more complicated. Everything that was clear is now a mystery. The most fundamental difference in the conditions of Demo and Live trading is the change in thinking, attitudes and motivations of the trader and his ability to mentally flip into responsible and challenging process of working with a real capital.
The second issue is, that the conditions of Demo and Live trading differ very significantly in certain details. Real data from the Stock Exchange come into Demo software and from 90%, everything works as real. However, it must be noted, that the Demo is only a software and computer simulation, which can not take into account detailed environment of real market conditions of the Stock Exchange. Ignorance of these differences, bad habits from Demo trading and ignorance of solving the minor operational problems and sometimes even the small things (easily solvable), can give a beginning speculator a hard time. We will tell you, how to avoid all this as much as possible.
Deal with your first Live account as stricly educational and learning issue. Have a reasonably large capital on your account (reasonable minimum is 5 -; 10 000 EUR/USD). Work exclusivelly with 1 Lot for opening the position. Avoid financially aggressive, volatile and esotic assets with worse liquidity. You safe yourselves awkward moments. Don"t open too much trading positions, 1, 2, 3 is enough. Learn the management of positions, which you open on the Stock Exchange and don"t risk too much, don"t overtrade yourselves with amount of Lots nor amount of trades. The aim of activities on your first Live account should be -; learn how to trade, trading, manage open trading positions, manage your emotions, decision-making procedures, testing strategies, learn appropriate Risk & Money Management.
Certainly, within your beginnings, try to avoid excessive risks and overtrading in connection with the ignorance of real markets conditions. If you add a small technical problem, which you don"t understand, or you can not deal with, exchange accident won"t wait for too long. When speculating with low level of risk, you will learn the Stock Exchange easily and calmly, try to keep in the game and don"t chase the profits immediately. Take the financial efficiency, financial leverage and actions on the Stock Exchange in your favour...
If you trade on your Live accounts with Professional Demo trading habits and add recommended Principles for safe and profitable trading, then Your starts on the Stock Exchange can be calm and soon profitable. If you hold to our recommendation to trade with small risk, i.e. with small number of Lots and with assets with adequate financial efficiency (e.g. chosen WinSignals assets), you will give yourselves a chance to become professional speculators and you can join the 10% of Stock Exchange winners.
Fundamental dofferences between Demo and Live Trading
Within one trading platform can the trader online daily open CFDs trading positions on stocks, commodities and cross-rates at the Forex currency exchange. CFDs are there traded on the basis of the same formulas and mechanisms as Forex. It enables very effective and easy access to trading with selected assets in order to hedging of the price or realization of the profits, which are generated as the price difference with the price movements of the selected asset. Particular stock, commodity and currency exchanges very differs in the conditions of the market orders executions and in many other parameters as is the volatility, liquidity, the guarantee of the execution, the asset behavior from the liquidity and price development view depending on trading hours and real asks and bid. It is necessary to understand these differences! While the market orders execution in trading cross-rates from Forex is guaranteed in the sense of set parameters without slippage, execution of CFDs contracts on stocks and commodities can be different.
For Shares and Commodities, (especially for the less liquid and more volatile), it is neccessary to know the conditions of the Real market running. CFD financial instrument are displayed to the specific amount of contracts of Exchange parquet or electronic markets. Within their issue, the dealer has to respect not only the quotations but also liquidity and current demand or supply of the Exchange. CFD then exactly replicate the actions on Share or Commodity Exchange. CFD trader should be aware of the fact, that the conditions of real trading on individual Share and Commodity Exchanges are different in many parameters.
Operator of the Exchange guarantees the null slippage for all ForexStop, Limit, Entry Stop and Entry Limit orders, which are placed at least one minute before the market achieve your specified price. It is allowed by the great liquidity of the world currency exchange Forex. Against it the execution of the trading orders for CFDs of stocks and commodities must respect concrete trading conditions of the particular exchanges. Nevertheless the provider of the CFDs exchange will make the execution of your trading order always, when the real market conditions allows it, respectively with the nearest price settlement in the relation to the liquidity of the given asset. According to the characteristics of particular assets you have to learn to work with the possibility of some price slippages during the realization of your orders.
In the platform of the electronic exchange CFDs are data from many exchanges constantly updated how you can see in the list of assets (stocks, commodities). Whatever exchange has got the right to stop or to cease trading with any asset. It will take effect so that it is impossible to trade the given asset, the exchange dealer can not influence it. The reasons to stop trading can be various (negative events, technical problems of the exchanges or just trading processes). The typical effect for the stock exchange and some commodities is, that trading stops or ceases, or the liquidity significantly decreases, in the minute at the exchange appears current significant ask overlap or the other way round. In this case only price quotations are changed (Sell, Buy respectively Ask, Bid) but it is impossible to trade. If the overlaps are enormous, the exchange can cease trading, and will start again if the ask and bid are in the equilibrium.
These situations can lead into significant price movements, where the price during short time strongly moves, but you can not trade the asset. Otherwise this is being described in the connection with the commodity and stock exchanges; on the charts arise so called Limit movements and price gaps (price advancements). This situation surely arose on the 2.3. When Silver in the time between 12, 30 and 12, 50 got significant ask overlap and the exchange responded by very volatile movement of price quotations. And the exchange could cease trading. The dealer of the exchange can not influence it. The Live accounts" dealers do not think out whether the clients understand or not the real market conditions, they simply execute the client"s orders on the basis of the real market conditions.
Within the Demo Trading it is possible to trade this price difference, Stop and Limit orders are functioning. But it is necessary to be aware of the fact, that in the real trading the trader"s orders are executed by the CFD exchange dealer. He has to take into account price movement, lower or null liquidity. Live accounts" orders if they are entered, can make, if the price movements stop, it means prices steady and the exchange is again functioning in the current ask and bid mode. That"s why we are convinced that Demo is indeed great thing, to learn this online trading in the real market price conditions, but, in the frame of trader"s behavior on the Live account is simply necessary to know individual assets" specifications, how the trading sessions are made, what influence have the concepts like is the time process of trading, price fixing -; price quotations, liquidity, volatility, slippage, slippage of trading orders Stop, Limit, Order Stop, Order Limit, Trailing Stop on the trading orders executions.
It is unwise to play at the exchange with real money without knowing the functioning of these concepts in the real market conditions with different assets. Do not risk at these markets your money, without understanding these concepts. According to the experience of professional traders is possible by well selected strategies close more than 90% of your trading positions in the profit. You must work with the knowledge of real market functioning. Do not forget that these markets give the professionals fantastic money. Unknowing and childish people the market can bestow losses.
If you trade with the Principles of Professional Demo Trading even in the conditions of Live trading and if you don"t risk with the large amount of Lots, then the transition to Live trading will be easier. You will get used to the fact, that the start into trading (Open) is sometimes more difficult, as well as closure (Close). Learn, except using the Open and Close position orders, also using the orders of Entry Limit and Stop order type. Very effective opening of position is on so called OCO order. If the closure of your open position gets more difficult because of lowered liquidity, don"t hesitate to set also the Stop and Limits orders tightly and also try Close order to your closing position... It works the same way, as OCO order when opening. If you manage to close the position successfuly, any other instructions for this position will be automatically canceled. If you get a price slip when opening or closing your position on the Stock Exchange, don"t worry about the small coins. Be happy for each profit and successful trade in the conditions of variable liquidity and volatility :-)
And one advice at the end -; for opening position on the Stock Exchange enter reasonable numbers for the amount of Lots - 1-5, 10, 20, 25, then the whole tens and hundreds. Don"t forget that e.g. 17 or 53 Lots will be hard to pair and you will lower your chances for good price and fast trade. And the tens and hundreds of Lots, that information is only for large and strong accounts of professional traders!
Limit price movements -; can appear only for some commodities. Concrete conditions depending on ask and bid development and real trading conditions are settled by the providers of particular exchanges, you should inform in this matter in your own interest.
Price gaps -; price gaps (price level movements) happen because of enormous ask overlap and the other way round. You can see the price movement on the chart as a gap or price advancement in the short time or as a stop of the trading, where is impossible to enter into real trading and all the executions of entered trading orders are done after the price movement end, it means in the time of normal liquidity and trading mode.
According to the experience more than 90% of arisen price gaps are with time balanced. Different assets in the different times on the basis of various events can move the price in the way that influences more or less significantly your account balance. It is necessary to understand the financial effectiveness and behavior of the particular assets in the real market conditions.
Limit price movements and gaps can disvalue the accounts of the inexperienced traders, as well as they can bestow fantastic profits to the far-thinking and informed professionals.
Limit price movements and gaps arise solely at some specific assets in less than 1 % of trading time.
90% of limit price movements and gaps arise in the direction of the main price trends. There exist some assets, which aren"t almost concerned by the issue of price gaps, because they are very liquid.
Higher price volatility and lower liquidity of the assets is almost always caused by the unbalance between ask and bid. There appears for traders the problem of successful entrance into trade, the advancement of the orders, orders Stop, Limit, Entry Stop Order, Entry Limit Order.
Whatever stock, commodity or currency exchange can cease or stop trading from any reasons, out of others even because of the enormous ask or bid overlap.
Do you know the issue of Open Range? First minutes of trading whatever asset at the exchange are the most problematic. Particular exchanges are analyzing ask and bid, actualizing quotations, traders are not trading a lot or on the whole, analyzing fundamental reports and circumstances for their orders. In the frame of Open Range oftentimes arise price gaps, in the Live trading it is not possible to trade them, on the Demo accounts it is possible. You should always wait until the market steady.
Do you know how and where to place to the exchange your orders Market Order, Trailing Stop, Limit, Entry Stop Order, Entry Limit Order, Hedge Position, Close Position and when and how they can be executed?
Do you know how particular assets are effective, volatile, liquid, risky or safe for your trading? It is wise to know it!
Do you know how big the account should be for safe trading with particular assets?
Do you know how to identify your risk opportunities for the realization of more than 90% successful trades?
Do you know how to make profitable money management; it means how to gain from the market profits and no losses?
Never underestimate real functioning of stock, commodity and financial markets!
Do not forget, that Demo is more or less only training and game. In the live Trading you have to deal with real market conditions and particularly with your emotions, you make decisions with the knowledge of markets in relation to the account size and acceptance of your losses.