Last Updated on September 2, 2024
Traders often ask – what can I expect when transitioning from demo trading to a career as a funded trader? What are the differences? Is it more challenging? Does it get more stressful?
These are all valid questions, and, truth to be told, the answer to all of them, for most funded traders, is usually “yes.”
Think of the transition from a demo to a funded trading account as that between a driving school and venturing onto the open road after you get your driving license.
In driving school, you have the comfort of an instructor sitting beside you. They guide you through the process, warn you of potential dangers, and even intervene when necessary – stepping on the brakes, adjusting your steering wheel, and more. In a nutshell, your instructor is your safety net, ensuring that your mistakes won’t be costly. This closely resembles demo trading, where you have the luxury of making mistakes without real consequences as in direct financial damage. In both cases, the more you practice, the more confident you get and the fewer mistakes you start to make.
Naturally, this gradual evolution will allow you to become a funded trader, or in the second case – to get your driver’s license and hit the road alone for the first time. Suddenly, the responsibility is entirely yours and there’s no one in the passenger seat to warn you of hazards or remind you to adjust your speed in a tricky situation. The stakes are real, just like in live trading. Every decision you make on the road—whether it’s how fast to drive, when to merge, or when to brake—has immediate, tangible consequences. A lapse in concentration or judgment can lead to serious outcomes, just as in trading when real money is on the line.
Driving safely requires you to stay alert, follow the rules of the road, and manage your emotions when facing unexpected challenges—like a sudden change in weather or reckless drivers. In trading, sticking to your plan, managing risk, and controlling your emotional responses to market fluctuations are critical to mitigate risks and avoid losses.
Without an instructor’s safety net or virtual capital buffer, new drivers and traders can feel overwhelmed by the weight of their decisions. At the same time, just as experienced drivers anticipate hazards and make calculated decisions, successful traders must be prepared to navigate market volatility with a calm, steady hand.
The first 30 days after you become a funded trader are the most crucial period for this. Use them to gain confidence and lay the foundations of habits that will define your success – adjust your mindset, set up a clear strategy, learn to manage expectations, and train yourself to remain disciplined.
In one of our previous articles, I gave you ten valuable tips on how to master the transition from a demo to a funded trading account. This guide is the natural continuation of the topic, providing a practical roadmap to help navigate your first month as a funded trader. Let’s dive in!
Step 1: Use the First 30 Days to Embrace a New Mindset
The first 30 days as a funded trader are rarely about trading. Instead, dedicate them to training your mindset that things are getting real now. And these thoughts shouldn’t scare you. Instead, they should fill you with confidence that you have made it and you are at the door of your professional trading career.
Jesse Livermore, one of the greatest traders of all time, once said,
The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the man of inferior emotional balance.”
Trading is deeply psychological. The fear of losing real money can cause emotions to override your trading plan, leading to costly mistakes. A fundamental shift from the mindset of the “no-risk” demo trading world is essential. The presence of real money amplifies emotions like fear and greed. Understand that the emotional intensity of live trading is inevitable, but it must be managed. The key is to recognize these feelings early and not let them drive your decisions.
To avoid ending up in the spiral of losses once you step into the real world, use the first 30 days to train your mindset and build confidence. And always remember that, according to market guru Peter Lynch, everyone has the brainpower to make money in stocks, but not everyone has the stomach. Focus on your stomach!
Survival Tip: Acknowledge Emotional Triggers
Keep a journal, not just of your trades but your emotions throughout the day. Note moments of fear, greed, or frustration, and observe how they correlate with your decision-making. This will help you identify emotional triggers and adjust accordingly, keeping you grounded in your trading plan. In the words of Paul Tudor Jones,
The most important rule of trading is to play great defense, not great offense.”
Learn what a trading journal is here, or dive into our list of the top 5 paid and free trading journals to find the best fit for your needs.
Step 2: Set Realistic Goals and Manage Your Expectations as a Funded Trader
Everybody wants to get rich quickly, and trading is usually considered a viable pathway. To be frank, this is a recipe for disaster. Don’t trust me – learn from the world’s best.
Jesse Livermore reportedly made a staggering $100 million in a single day during the 1929 stock market crash. While he was used to making big profits quickly, he also lost his entire fortune multiple times because of overleveraging and ignoring his own trading rules, ultimately leading him to bankruptcy in 1934.
One of the biggest mistakes newly funded traders make is setting overly ambitious goals. However, the first month of funded trading isn’t about becoming a millionaire. It’s about learning to be consistently profitable while keeping your risk low and gaining consistency. Think of it like running your first marathon. The goal isn’t to break records but to steadily complete the race.
Traders who enter the market with unrealistic expectations often face disappointment and frustration. Over time, this can lead to emotional trading, where decisions are made impulsively rather than strategically.
Okay, but what are realistic goals? Realistic goals mean understanding that you will have losing trades, and that’s okay. As a result, you should aim to execute your trading plan with discipline, not to chase profits. To further understand the importance of preparation and risk management, think of the words of the trading legend Bruce Kovner –
I know where I’m getting out before I get in.”
Survival Tip: Be Grounded and Define Trading Success Beyond Profits
Avoid looking at trading simply as a way to make quick money, but see it as a long-term journey. Define expectations around learning and process, not just outcomes.
Set performance goals such as sticking to your trading plan, maintaining discipline in your entries and exits, and following your risk management strategy. Success in the first 30 days is more about developing consistent habits than generating huge returns.
Remember that, much like an athlete needs time to adjust to the pressures of competition, a trader needs time to acclimatize to the live markets. Even the best traders don’t win every trade. In fact, many successful traders only win 50-60% of their trades but are highly skilled in managing losses. As George Soros put it,
It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.”
Step 3: Establishing Good Habits: Consistency Over Perfection
In your first 30 days, the habits you form will set the stage for your long-term success. The importance of routine can’t be overstated. Develop a morning routine that involves analyzing the markets, reviewing your trading plan, and mentally preparing for the day. Learn how to optimize your routine in our dedicated guide.
Remember, consistency is more important than perfection. If you deviate from your plan, acknowledge it, learn from it, and adjust. And don’t do it again!
Paul Tudor Jones said it best:
Where you want to be is always in control, never wishing, always trading, and always, first and foremost, protecting your butt. That’s why most people lose money as traders or speculators—because they don’t have a plan.”
Establishing good habits is about maintaining the discipline to stick to your strategy even when the market moves against you. And this is what differentiates the mediocre from the successful trader.
Survival Tip: Treat Trading Like a Business
Trading is like a business venture. Approach it systematically, with a clear plan and measurable goals. Just like a successful entrepreneur, you need to control costs (losses) and focus on steady, incremental gains.
According to Van Tharp, a trading psychologist,
You don’t trade the markets; you trade your beliefs about the markets.”
This means your mindset and habits will have a greater impact on your performance than the markets themselves.
Step 4: Risk Management: Your Most Important Tool
Risk management is the cornerstone of long-term trading success. As such, it should be the primary focus in the first 30 days. Alternatively, focus on setting strict stop-loss levels, keeping your position sizes small, and not over-leveraging your account.
The 1-2% risk rule is a great starting point. This means never risking more than 1-2% of your total capital on any single trade. If you have a string of losses, this rule will help you preserve your capital and stay in the game long enough to experience winning trades. For more risk management know-how, check out our dedicated guide.
Survival Tip: Respect the Market’s Power
Trading is inherently risky, and the market can be unpredictable. Respect that and protect your capital against it ensuring you always cover your downside.
As Ray Dalio advises,
No one can know everything. The key to success is to understand your own weaknesses and learn to manage them.”
Step 5: Embrace a Slow and Steady Approach
In the first 30 days, avoid the temptation to make large trades or trade frequently in the hopes of quickly building your account. A slow and steady approach, focused on careful analysis and patient decision-making, will help you navigate the inevitable ups and downs.
Think of trading as navigating a ship through turbulent waters. You don’t want to rush; you want to make small, calculated moves to ensure you don’t capsize. Gradual progress and risk control will lead to better long-term results than quick, risky trades that could accumulate significant losses.
Survival Tip: Master the Art of Patience
Patience is a trader’s best friend. Avoid overtrading and focus on high-probability setups. Warren Buffett’s advice rings true here:
The stock market is designed to transfer money from the active to the patient.”
The less you force trades, the better your results will be.
Jimmy, one of Earn2Trade’s Trader Success Stories, notes that, if you focus on your process and practice discipline and patience, “the money will follow.” Let’s hear his advice.
Step 6: Leverage Technology to Support Your Strategy
Technology plays a crucial role in modern trading, offering various tools to help you execute your strategy efficiently. Use automated alerts, trading platforms with advanced charting capabilities, and backtesting software to improve your trading performance.
Тhe first month is an excellent time to refine your setup and test your tools in real-market conditions. Ensure your trading platform, internet connection, and backup systems are reliable since inor glitches can lead to costly mistakes when trading real money.
Survival Tip: Automate and Streamline Your Trading Activities
Automating parts of your trading process, like setting stop losses or taking profits, can help eliminate emotional decision-making. Additionally, streamlining your process with checklists and routine assessments ensures consistency.
The platforms you get for free throughout Earn2Trade’s training programs are a great starting point for familiarizing yourself with the benefits of capitalizing on the power of technology. For example, you can dive into advanced trade analytics and journaling with Journalytix and research the market, backtest, and execute complex trading and risk management strategies with NinjaTrader and/or Finamark (learn more here).
Step 7: Learn from Your Trading Mistakes, Don’t Dwell on Them
Inevitably, mistakes will happen in your first 30 days as a funded trader. What matters is how you respond to them. Every successful trader has experienced losses and setbacks, but they’ve used those moments as learning experiences rather than reasons to give up.
After a mistake, take time to analyze what went wrong. Was it a deviation from your trading plan? Was your analysis off? Did emotions cloud your judgment? Use these reflections to improve future performance.
Survival Tip: Develop a Resilient Mindset
Instead of fearing mistakes, embrace them as part of the learning process. As Michael Jordan said,
I’ve failed over and over and over again in my life, and that is why I succeed.”
The same principle applies to trading. It’s about resilience, not perfection. Keeping a trading journal is of great help on that front.
Earn2Trade Helps You Make the Most Out of Your First 30 Days as a Funded Trader
Remember how a few lines above, I said that the first 30 days after you become a funded trader are the most important ones for your career?
Well, forget about this – I was wrong.
The most critical time for your trading career is actually before that – the training period when you learn the trade and test your skills in a virtual account. With the right approach, you will set stable foundations that will ease you through the first 30 days after you become a funded trader and set you up for long-term success.Earn2Trade’s programs, Trader Career Path® and Gauntlet Mini™, give you everything you need to make the first step in your trading career – from flexible and convenient trading rules and some of the best trading and journaling software for free to extensive educational materials and access to a supportive community of like-minded individuals. Thanks to all this, within the past year, over 700 individuals have set a solid foundation to succeed in their first 30 days of live trading.
