Trading on a live account and doing it well is the ultimate goal of many traders, well apart from the dream of owning a private yet of course. There are however a number of different things that you need to consider before you can think about going live, so we have come up with a number of different signs that point to the fact that you are ready to go live and to trade with your real money in order to start working towards that financial goal that you are looking for.
Are you consistently making a profit?
People often get a little confused when it comes to being profitable and winning. When we talk about being consistently profitable it does not mean that you need to win every trade, in fact, many traders lose more trades than they win but still remain profitable overall thanks to their strategy and risk management plans. We need to make it clear that losing is a major part of trading and is not avoidable at all.
If your strategy is set up correctly then it really doesn’t matter too much if you have lost a trade or two the previous week, it does not mean that your strategy doesn’t work and it certainly does not mean that you are not a good trader. What you should be focusing instead is continuing with your strategy in order to find some new higher probability trading setups for future trades, you should also come up with strategies and risk management plans that can help to minimise the losses that you incur with a losing trade and maximise the profits that you make with a winning trade.
You need to monitor your profitability over a long period of time, most like to say six months, once you have done this and you have remained consistently profitable over that sort of period of time, it can be a great sign and indicator that you may well be ready to go and move onto a live trading account.
Do you have clear risk management plans in place?
If you ask 100 traders what the most important part of trading is, you will probably find that quite a few of them will tell you that it is risk management, and for good reason. Proper risk management is one of the major things that stands between you losing a little with a losing trade or losing your entire account. You need to ensure that before you even think about going onto a live account that you have a clear cut risk management plan that you are consistently following and stick to it at all times. It is relevant that you stick to it, as the moment that you deviate from it, the overall profitability of your trading strategy will shift and this can have a detrimental effect on your overall trading.
So before you consider going live, ensure that you have a set of rules for your risk management set up. Something that is easy for you to follow and also easy for you to stick to, if you are finding it difficult to always follow it, then you may need to think about potentially changing a few things so that you can. If you have this setup and you are able to stick with it, then this may be another sign indicating that you are ready to move onto a live account.
Do you panic when a trade is losing?
Are you able to keep your cool when a trade is going the wrong way? If so then you are on the right track. If you do still panic then you may want to think about how much you are investing and whether or not you are risking and investing a little too much. It’s not an easy thing to do, to keep things cool when you can see your money going down, but it is something that you will need to get used to because it is going to happen a lot. In order to get around this, create a trading plan, a detailed one which includes your risk management plan and this will help you to keep focused and to have a broader view of how things are going, rather than just concentrating on the current trade. Once you are able to stay cool even with those losing trades, that is a sign that you may be ready to go into some live trading.
Do you still take your losses hard?
A loss is never seen as a good thing (unless you can learn from it) but you need to look at how you take these losses. Does it really upset you? Does it make you want to win back the money? Or are you simply able to shrug it off and move onto the next trade? If it is the latter, then you may be ready to move onto some live trading. If you are still struggling with losses you need to find out why, whether you are simply risking too much or for some, trading is just not for them, especially if they are so risk-averse. As soon as you are able to take them well, you can tick this off as a sign that you are ready to progress.
You have found the right broker.
For many, finding the right broker is easy, because they do not have many requirements, but for others, it can be a long process to find the one that is right for you. Before you go live, you need to be sure that you are happy with the one that you are using, afterall you are going to be depositing some of your hard-earned money into it. You need to ensure that you are happy with the spreads, the commissions, and the slippage that may occur. You should also ensure that you have spoken to the support team and that the appropriate deposit and withdrawal methods are available. Only deposit your funds into an account that you are actually happy with, if you have friends already using one that can vouch for it, then that is even better. Just be careful of the not so friendly ones that are just after your money.
So those are a few things to think about, if you are able to tick them all off then it is a good sign that indicates that you may well be ready to head out into the big world of live trading. Remember to take your time, there is no rush to get there, but once you do, stick to what you were doing in the demo account, do not get carried away and you should be able to become a profitable trader.
