While a demo account allows you to trade with virtual money, trading with your own real funds on a live account is a different experience.
Here are some tips to help you start trading live and avoid common mistakes.
1. Start small
Start with small amounts to get used to trading with real money. When you see progress, gradually increase your trade size. This will help you manage risks and minimize potential losses.
The minimum deposit on Olymptrade is $10. To calculate your trading budget, determine the amount of money you intend to spend on your trade. Then, divide this amount by the percentage of your account balance that you can afford to lose if your trade goes wrong.
For example, if you intend to invest $5 in a trade and are willing to risk 5% of your account balance, you’ll need a deposit of $100 ($5/0.05).
2. Have enough reasons for making a trade
Even if you don’t use a particular strategy, make sure to base your decisions on several signals. For example, if the price of the asset you intend to trade rose above a particular level, that alone is not enough to rush into an Up trade. Instead, break down the situation and ask yourself:
- Has the price rebounded from the support level?
- Has the candlestick formed the hammer pattern, which typically precedes price growth?
- Does your technical indicator also confirm an ascending trend?
If the answer to these three questions is yes, it may indeed be the right time to open an Up trade.
3. Consider the bigger picture
To better understand the chart of the asset you want to trade, take a look at larger timeframes. That way, you’ll be able to identify long-term trends and make better trading decisions.
For example, if you see an asset’s price rapidly moving up within 30 minutes, check how it looks in a one-hour timeframe. You may find that the price will soon meet significant resistance and probably reverse downwards.
You also need to keep an eye on the economic news. What’s the reason behind the price growth? Has something huge happened, or is the price growth being influenced by minor news whose impact is likely ro reverse?
4. Manage risk and avoid overtrading
To keep risks under control, don’t spend more than 10% of your deposit on a single trade. In the Forex mode, use Stop Loss and Take Profit. And don’t forget to take breaks during your trading sessions! It’ll help reduce stress and maintain clarity for better trading decisions.
5. Analyze your outcomes
Keep a trading journal to track your performance and identify areas of improvement. Make records of all your trades, including the reasons for entering and exiting each trade, as well as their results. This can help refine your strategy and improve your performance over time.
Evolve as a trader by combining your best practices with expert advice. Attend trading webinars, read books and articles, exchange experiences with fellow traders in our community.
Follow these tips to increase your chances of growing your live trading account over time.
In the next lesson, we’ll introduce a test that will determine whether you are ready to transition to live trading.