Hey All,
Sorry if this is posted somewhere else in the forum (I am not very good at navigating through forums). If you already know a place where this is posted, please let me know!
I have heard it mentioned before that doing real money trades is completely different ballgame than practice money. Could anyone help explain this to me? Aside form the psychology of gambling your own capital, what else is different between the two?
That’s the main thing: it is your own REAL money that’s on the line.
Let’s say £100 is a considerable amount of money to you. Now let’s say that you are in a trade & that it is £100 up & you are sooooooo tempted to exit the trade & run with the profits. But your analysis says that you might get £200 out of the trade. Now this is where your brain messes with you. You don’t want the trade to turn in to a loser (assuming you’ve not gone to break even or locked in profit) as £100 is good money…but £200 is even better…but that might not pan out…but it could…right, my analysis shows that it’ll go to the next level of resistance…I appreciate that but look, “+£100”, take it & run…no, set & forget…close…hold…
Any new person doesn’t appreciate the part the psychology plays, anyone even a bit seasoned with tell you just how important it actually is. It is W-A-Y harder than you think.
I’m not opening the demo or live debate here, however, in my opinion, the sooner you start trading with real money the better; I’m not saying a big account but a small account as a learning account with an amount that you wouldn’t be fussed about losing - call it the cost of learning & it’s a small price to pay for first hand live trading experience.
Some say the pricefeed and slippage differs from real. But like baz1982 says, it is the pshycology of real money. Many can achieve great % growth on demo, but then that same strategy fails in real. Most of the time it is because it is real money now…
Practice account is demo which is not using your own money , You made loss or profit in it. You can not feel the depth of loss or profit. I think in real account traders feel emotions and some tension too. They want win in every situation .It is a difficult task .If they loose they feel disturbance.
Hello Roark,
thank you for the question (and, yes, if you did a Search for ‘Live or Demo’, or ‘Demo or Real’, etc. you would find
that this topic has been posted about many times, unsurprisingly)…
Have you tried looking through this thread? Some good books recommended there by Emeraldorc too…
http://forums.babypips.com/newbie-island/62715-difference-between-demo-trading-live-trading.html
Good luck…
PS- thanks to everyone for their excellent answers.
Imagine you were playing poker with some friends using matchsticks instead of money. Lots of smiling, joking when you win, no big deal when you lose, just your mates making fun at you.
Now imagine you are using money. No one’s smiling anymore, maybe some cursing when you lose, certainly more stress.
Thats the difference
A little tip for you: if you click on “advanced search” one of the options you get is to search for threads that contain keywords in their [U]titles[/U]: that’s the useful one, to find out where things like this have been posted. 
These threads may interest you …
http://forums.babypips.com/newbie-island/4023-demo-vs-live.html
http://forums.babypips.com/newbie-island/6425-suspicious-demo-account-results.html
http://forums.babypips.com/forextown/8296-demo-accounts-how-real.html
http://forums.babypips.com/newbie-island/8648-demo-live-account.html
http://forums.babypips.com/newbie-island/12514-demo-v-live-account.html
http://forums.babypips.com/newbie-island/14240-demo-vs-live-newbie-question.html
http://forums.babypips.com/forextown/15333-difference-between-live-demo.html
http://forums.babypips.com/newbie-island/17637-whats-difference-between-demo-live-accounts.html
http://forums.babypips.com/newbie-island/17696-how-accurate-demo-trading.html
http://forums.babypips.com/newbie-island/59483-demo-accounts-verse-real-accounts.html
http://forums.babypips.com/newbie-island/62715-difference-between-demo-trading-live-trading.html
http://forums.babypips.com/newbie-island/67265-demo-results-vs-live-results.html?highlight=demo
http://forums.babypips.com/newbie-island/35403-demo-live-trading.html
http://forums.babypips.com/newbie-island/35789-live-trading-demo-trading.html
http://forums.babypips.com/newbie-island/36868-how-demo-trading-differs-live-trading.html
http://forums.babypips.com/newbie-island/37557-demo-accounts-vs-real-accounts.html
http://forums.babypips.com/newbie-island/39258-demo-vs-live-accounts.html
http://forums.babypips.com/newbie-island/40382-what-differences-between-demo-live.html
http://forums.babypips.com/newbie-island/40929-demo-accounts-how-realistic-they.html
http://forums.babypips.com/newbie-island/42004-what-differences-between-demo-live-accounts.html
http://forums.babypips.com/newbie-island/42277-difference-between-demo-live.html
http://forums.babypips.com/newbie-island/43011-demo-trading-vs-real-trading.html[/B]
Hahaha
You beat me to it, Lexy!!
Never underestimate the Power of The Search!’
There you go, Roark
Happy Reading
The OP used terminology different from the links, one word - ‘[B]Practice[/B]’ not ‘Demo’.
In the not so distant past learners had to catalogue everything by hand, thus the term ‘paper trading’.
Many of the best paper traded for years, even the legendary Wyckoff, before committing small live accounts.
Any professional sportsman dedicates many hours to practice, this game is no different, practice makes perfect.
I use two practice accounts, one GMT, the other GMT-5. There are many times when I am practicing that I become completely absorbed, my emotions are no different.
I truly believe that if I cannot apply the same emotional concentration to practicing then I may have an increased chance of emotional problems on the live.
I apply a challenge to myself, if I cannot maintain a practice account by increasing it’s equity curve to my specified target and at the same time maintain targeted drawdown then I re-think the approach. I’d say that the second part of the equation is actually more difficult when practicing.
Good points, as always peterma…
but he did mean ‘demo’ by ‘practice’, because then he went on to refer to trading with ‘real.money’…
He did. While referring to demo accounts, clearly: he said “[I]practice money[/I]”, contrasting it with “[I]your own capital[/I]”.
This is the difference, ‘demo’ trading is like some of the posters said about matchsticks.
Practicing is a whole different ball game, you are practicing for real, not as a demo, not for matchsticks, this is the real thing, an old trader once said that to be a good trader there are three important words … practice…practice…practice .
Told this before, the retired bank trader who decided to start up on his own in retail, sat up the entire night on one of his early trades, it was going wrong and needed nursing, he needed to minimize the loss.
The fact that it was a practice account did not come into his thinking.
In 2002, I threw in a 1000 bucks and traded options, having no idea that I could be called upon to come up with the dough if exercised,wtf…I lasted 2 1/2 months, surprisingly. Amgen, Biogen were my biggies.
I am on practice, as Oanda calls it and rightly so. I have no concern if the market goes against me as I have no money on the line. I have read time and again one only begins to learn money management once live becomes of age.
I do believe the time nears as I am preparing to do such. Still need to do recommended studies such as a journal???..makes me feel like a girl, but nevertheless, recommended. Memory is good, but can’t file all. Weakness is buying into resistance…can’t seem to shake that for the brain of me.
I do not want to be the 90% who fail, I want to be the 10% who succeed, so here I come.
Tim
Apart from the technical differences like different quotes and slippage, the main difference is that you’ve got something to lose when you move to e real account. Whereas in demo/practice you are venturing in a new area of knowledge and looking with bright eyes at what’s there… when you move in with a deposit it’s like you have a knife in a jungle, but you still want to get to the treasure. The first is pleasant and lacks pressure, whereas the second is a challenge and you experience fear.
You are right, demo and real account are two totally different things. A trader can learn a lot about techniques and methods for trading in a demo account but his actual practice should be carried on a real account.
I may not know much about forex trading because I have only been doing this for 6 months now.
I started with a demo account for 1 month just to learn the platform (MT4) then I jumped straight into a real account. Why? because I felt trading a demo without the fear of losing real money is a waste of time. many will disagree with me but I fould out that it’s easy to find a good trading strategy but the fear when trading your system is the real challenge.
With real money we tend to set stops loses to close and get knocked out before the direction moves in our fava, and jump out a trade to soon because the fear losing is all to real. Learning to manage your fear can only be learnt on real account.
So to answer your question I think a practice account is just that, practice your system and your platform
and when you confident and brave enough to face your fears and make some real money open a real account.
Well there you go, the old demo vs live, most learners feel the need to use the demo to get a feel for the technology, but they really need to feel the fear , so open the live.
You don’t learn how to cope with fear by giving money to bookmakers, you learn how to cope by taking a deep breath, you have practiced, with that practice you have gained skill, with that skill you have gained confidence.
A confident trader most often has his own edge, gained from practice, not from giving money away.
Btw, nothing wrong with having a bit of fun in the market, no more that having some fun at the race course, like they say, horses for courses - want to take the business serious, then first learn how to practice for real.
How do girls feel, exactly?
Hi.
Well, I’m different. And all I can do is tell you how I am.
I have taken this business very seriously since I began it. Jan '13. I’m old enough to know how to actually be serious about something.
I have always refused to just jump into the market and lose my money. I grasped the concept, pretty quickly, of speculation. And I also understand human behavior. We want to be right. We think we can be right. And we will even put money on our feelings that we will become right. But I also understand the fact that we just never will be always right. It’s best to play the odds. Know, realize, immerse yourself with the understanding that you will lose along with winning. And it just only makes sense that you need to learn the game, develop a good strategy, test it, and prove to yourself over time that it’s possible. I mean, what makes more sense than to give it your all on a demo account. Like it’s real. And after keeping track month after month you see the account grow. Or not. See, only a serious person will be honest with himself.
Well, that has been me. Sure, I have blown 3 1K accounts during the last 3 yrs. Believe me, I’ve been bent out of shape… pretty much the entire first 2 yrs of it all. But I have a genuine love for the game. That has always kept me in it. The only real problem I have is just how long will it take for me to get there? (that’s a feeling that crops up at times) (but I do know it just doesn’t matter how long it will take, I will always be in it) That’s my mind talking.
I’ve pushed my ‘live’ date back so many times it ain’t funny. I thought it would be the beginning of this year. Nope. I wasn’t ready. But, I do think I’m ready in two more months. Jan '16. That’s when I’m going in.
(Don’t worry…there’s a big thread coming with that)
And I even remember reading some good psychological books that blew me away. And I even said to myself that I’m soooooo glad I didn’t go live yet!
Well, at the present time now, I feel confident, in myself, my plan, and it’s about time to get in live.
Man…for as much as I have traded seriously in the past just about 3 yrs now, it’s gonna be the same old thing.
Look, I am different. I am not your average person. I do not expect anyone to believe me. Nor do I think anyone should do what I do.
There is some really good advise thrown out there that newbies do need to heed.
But, this is who I am.
Mike
Much the same as anyone else, really: typically with our fingers.