Phase 1 (Demo Account)
Result being measured: Progress in ability and understanding of the tools/concepts being used.
In this phase you are focused on learning the tools and concepts that will allow you to trade. You should not be attempting to do everything all at once. Instead, your focus is on deeply understanding the tools and concepts in isolation, followed by logical groupings of them,before eventually bringing it all together in Phase 2.This phase is mainly formed of sessions involving deliberate practice and studying.
Phase 2 (Demo Account)
Result being measured: Consistency and profitability
In this phase you are bringing everything you’ve learned together. Your aim is to firstly achieve consistency with your trading, regardless of the P&L results. You need to have a consistent approach with every trade, with relatively consistent overall results. This can then be optimised to achieve profitability(if not already achieved).
If consistency is not achieved, you should go back to Phase 1.
If consistency is achieved, the next aim is to be profitable with this consistent approach for a significant amount of time. This will vary depending on the trading style being used, but it should be no less than 3-6 months of consistently profitable results.
Phase 3 (Live Account)
Result being measured: Profitability and risk management
In this phase the consistency should have already been achieved in Phase 2 and carried over to this one. In this phase you use a live account, but with a small amount of capital.The aim is to achieve profitability, while also having a low drawdown on the account(below 10%, for example). If this can be achieved for a significant amount of time (as per Phase 2, this will vary), then a full live account can be used with no turning back!