Forex demo accounts can be a great way to learn to trade the forex markets. But they can also reinforce bad habits. These habits are why most traders never experience success with forex trading.
Practice is very important when learning to trade. One of the great things about the forex is easy access to demo accounts to practice on. A lot of times a new trade will sign up for a demo and start practicing trading.
But just because they are practicing doesn’t mean they are practicing the right things. In order to be an effective trader you must learn good trading habits. Unfortunately most traders start practicing without a clear objective of what they should be learning and all they end up doing is reinforcing habits that usually result in poor trading performance.
Most traders end up spinning their wheels trying to learn to trade but no matter what strategy they use they never get the results that successful traders are getting using the same strategy. They end up jumping from one strategy to the next looking for the one that will work. They focus on the strategy but never focus on developing good trading habits.
When practicing with a demo account it’s best if a trader can forget about which strategy is best and if the demo is making a profit or losing money. Instead the trader should focus on trading with consistency like a machine. Instead of focusing on the profit or loss of a trade, focus on whether you executed the trade with your trading rules and without emotion or your opinions making you stray from your trading rules.
Even if your demo is losing money, as long as you are trading your strategy like a machine and following your trading rules, you have accomplished what mots traders never will.
At that point you can then start adjusting your strategy so that your trades will make a profit or seeking a strategy that will make a profit. As long as you maintain your disciplined trading habits you will be able to make a profit with any good trading strategy.