How I progressed from a demo forex account to a live account

I am an unemployed car mechanic, as you are probably already aware.  A few months ago I started playing around with a demo forex account to get an opportunity to experiment with the various trading systems and technical and fundamental indicators out there.

Originally I didn’t plan to switch to a live account before next year, but the fact that I am currently jobless didn’t leave me with much choice.  I had to make some money rather quickly, so I went ‘live’ about a month ago.

One thing I learned during my training period on the demo account is that you should never allow what the experts call ‘analysis paralysis’ to set in.  That is when you try to use a large number of technical indicators at the same time and, inevitably, they start giving conflicting signals.  That’s when you start pulling out your hair a strand at a time and drinking 20 cups of coffee a day.

I decided to use only one technical indicator to start off with: the moving average.  This is probably the simplest one that exists.  It consists of the average price of the currency you are trading for the past, let’s say, two weeks.  When the price starts trading above this average, it’s highly likely that it will go up and if it starts trading below this average, it’s likely the price will go down.

The biggest problem with the moving average and similar technical indicators is the fake breakout.  The price starts trading above the moving average, you buy the currency and then the next day it falls back.  Luckily that doesn’t happen every time and if you consistently use the same strategy, you’re likely to show some profit over a period of time.

Did it work for me? I can’t really say.  So far I am just breaking even.  I’ve made three trades over the past month.  One went totally south and triggered my stop-loss, the second one went well and I made some profit, but the third one went nowhere at all so I sold it at a small profit.  Watch this space, however.  I am learning something new every day and one day I’m still going to become a successful full-time forex trader!

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