One of the worst mistakes you can make in your trading journey is to rush and open a live forex trading account without asking yourself some questions. So in this article, I am going to share the top 6 questions you should ask yourself before opening a live forex trading account.
If you are new to forex this article will be very valuable to you, if you are a struggling trader, please take time to go through this article, I believe after reading this article your orientation about the forex market will change.
Here are the top 6 questions to ask yourself before opening a live forex trading account
Table of Contents
Top 6 Questions to ask yourself before Opening a Live Forex Trading Account
Question 1: What is your trading goal?
This is the first question I normally ask anyone before accepting to mentor them: Over the past 8 years I have mentored close to 200 people free of charge. And their success stories is amazing. So if you want to be a successful forex trader, you need to have a clear and measurable trading goals.
When I stared learning to trade, my first goal was to develop my trading skills, my second goal was finding a mentor, my third goal was building a network of newbies to share knowledge, my fourth goal was creating a winning strategy that can guide my journey in the forex market, etc.,
If you notice, I have not mentioned making money, this is because once you get the skills and a winning strategy, you will make the money. So what are your trading goals?
Question 2: What is your progress with Demo trading?
Demo was created to help beginner to practice how to trade, how to manage risk, how to build a good trading psychology, how to control fear and greed, etc.,. If you don’t have a clear ideas of your strength in the forex market with a demo account, there is no need for you to think of opening a live forex trading account.
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As a beginner, your task is simple, use the demo account to learn and develop your trading skills, learn from all your mistakes, practice discipline and build confidence before opening a live account.
Question 3: Have you Developed a Trading Plan?
After understanding your trading goals and deciding that you have build enough skills from demo trading. The next task is to develop a trading plan. A trading plan is like an outline that explain your rule of entry and exit in the forex market, your lot size, stop loss and take profit level, etc., the trading plan must be as simple and straightforward as possible.
For instance, when looking at the rule of entry, factors like Support and resistance, trendlines, major swing levels, etc., are very important.
Question 4: Are you Ready to lose Money?
This is the question that most newbies don’t want to see. But it’s one of the most important question you must consider before opening a real forex trading account. Losing is part of the learning curve. For me, before entering a trade, I am always ready to lose money that is while I put stop loss on all my trades. Forex is risky, sometimes market forces can influence the direction of the trend thus making it to go against your analysis. So before, opening a live trading account ask yourself: “Are you ready to ask money?”
Question 5: How do you intend to review your trading history
If you take Forex as an investment, you will always be happy to look at your trading history to review how your investment is performing. This can be looking at your trading history at the end of each trading day to monitor and review all your trading history, look at profit and loss margin and prepare for the next trading day.
Read: The Complete Guide to Price Action Trading Strategies
Question: What kind of trader are you?
Are you a day trader or a scalper? Most forex trader struggle during their demo stage and still struggle after opening a live trading account. This is because they fail to understand the kind of trader they are. For the records, if you don’t understand the kind of trader you are, you won’t be able to develop a wining strategy to guide your trading journey.
Disclaimer
Deriv offers complex derivatives, such as options and contracts for difference (“CFDs”). These products may not be suitable for all clients, and trading them puts you at risk. Please make sure that you understand the following risks before trading Deriv products: a) you may lose some or all of the money you invest in the trade, b) if your trade involves currency conversion, exchange rates will affect your profit and loss. You should never trade with borrowed money or with money that you cannot afford to lose.