When to go "live"?

Beginner Questions
1

So, I’ve been trading demo for 6 weeks (longer but 6 weeks with this “technique/style/system”) and even with the little amount of free time I have to trade I am earning an average of 129 pips per week.

I started with a $10k demo account, 10:1 leverage, 20 pip stop loss, 60 pip take profit although I will manually adjust the stop to preserve profits if I am in front of the pc.

My 129 pips average are coming with me doing this while at my regular job (I run my own company so the boss isn’t gonna bust me!) and I am not able to fully focus on trading. If I was and I manually adjusted my stops to preserve my profits I would likely be a lot closer to the 300 pips per week average. Sooo many trades would go up to 40 or 50 pips profit and dive down and either stopping out or I will manually close the trade.

That all said, I feel that 129 pips is pretty good? This all feels a bit too good to be true and I hate that feeling. Did anyone else have that feeling when they were considering writing the cheque to open their first real money trading account?

I have rrsp’s, tfsa, etc… this is really only play money even. But still, it’s MY money and I don’t want to waste it jumping into this too soon.

Thoughts/comments appreciated.

(no, I am not going to try and sell a forex system)

2

If you aren’t aware of trailing stops, I would say you are not ready to go live.

3

that’s kinda how I was before I went live. The thing is, is that when you go live with real money you realize your emotions are very much tied to the trade.

I’ve only started to become consistently profitable about 1yr after starting precisely because my psychology was off. Now I’m much more detached so that I can trade more logically.

Anyway. I’d suggest going live with a small amount and trying to grow it. If you do that and stick to your plan you’ll make money. After becoming comfortable trading with your cash then you can add more money.

4

I’ve not been able to find the perfect trailing stop technique for my style of trading. When I use a trailing stop, it almost always gets me stopped out before any profit is earned due to retraces. :expressionless:

5

Only two reasons to stay in demo mode, IMO:

  1. learn the entry platform and charting functions.
  2. demo a new method or technique and see how good it works over a large sample size of trades, so that you can speculate on the win/loss ratio live.

Demo should be the same size as the account you are going to go with live, so you can practice money managment in demo somewhat realistically.

I disagree with advice that says demo for months or even years, until you have x system or method down cold and have developed a great win/loss ratio. I also diagree with advice that says go back to demo after blowing an account. If demo didn’t teach you enough not to blow your account the first time going back to demo isn’t going to do anything for you.

Trading live can be much different than demo. With too much demo, you will be internalizing fantasy land price moves, and be in a magical place where your stops are never hit, and then the price goes to your TP anyway.

IMO, as soon as you feel like you know your method good and have developed a good win loss ratio, you should go live and trade small to start.
On a micro account, you can trade as small as a cent a pip most of the time.

For me this was just a couple of weeks I think. I really don’t see a point in demoing endlessly. IMO, the people who do that are just to insecure or afraid to trade real money, even if it is on a micro account.

As you said, you mention the, “too good to be true feeling,” that demo’s can bring. Which is why I think they are a waste of time. You aren’t trading ANY real market. So, endlessly demoing isn’t getting you real trading experience.

Also, you won’t experience that emotion and mental reactions that live trading provides. Demo won’t do that for you no matter how much you try to pretend.

Experience in live trading and the willingness to keep improving every time you lose, and you will, is 1000x times more valuable than demoing for months or years on end.

If you have a system that you understand well and that seems to be working, sure test in on demo. A sample size of a hundred trades is a good sample size. If you have a good win/loss ratio, then I say go live and try to reproduce those results. Just trade small at first.

Think of your first account as your live learning account. The quicker you blow it the less valuable of an education it is.

6

You said alot of your trades go up 40 to 50 pips only to come back and hit your stop. If you set a TS for say 25 pips you would still be making 15 to 25 pips on all of those losing trades you had. I don’t know about your broker, but with mine, my TS doesn’t become active until im up by the amount of pips as my TS is set. So you start a trade with 20 pips as a stoploss, you would have to come up 25pips before your TS was set to break even, even so break even is better than a loss.

7

IMO, trailing stops are a device put in place by brokers to cheat traders out of profit.

I’ve tested trailing SL’s and you’ll find that most of the time they end up reversing and hitting it very quickly.

My personal solution is to move my SL to either break even as soon as I can, or to manually keep moving my SL postive as I see price either breaking through or resting on support & resistance levels.

If you have a well placed, “O crap SL,” in place and a reasonable TP, I’ve found it will do better than a Trailing SL almost every time.

8

I agree. I went live after only one month of demo trading. I opened a $50 account. After I’d gained 20% I upped it to $1000. After another 20% gain I went to $3000… Adjust those numbers for your budget and you’re in business!

That’s a 20% gain using real money management, though, not one or two overleveraged lucky trades… :slight_smile:

9

Thanks guys.

ThePhoenix, you make some great points. Really appreciate all the input from everyone.

I think I’ll be giving it a shot…

10

I use fxdd. They have 200:1 leverage pretty good support and all account types. spreads are also good on the majors. check them out.

Also I would like to know what system you are using. I have been trading for about the same time and I am trying to gather as much info as possible before i go live.

11

You mentioned that you have an TFSA. Do you know if forex accounts qualify for a Tax free savings account?

12

I prefer a thousad times to trade with 1 buck than with 50k of fake bucks!

0 Emotion in Demo, 0 Commitment…

Demo is for learning the platform and for the very newbies who have no Idea what trading is.

I recommend going live with little money soy you get used to emotions, is what I did and is working pretty well.

13

Go to live when you feel you are ready. If you are making consistent returns, and feel it is you and not solely luck, then give it a shot. Also, don’t listen to all the crap about how demo is 0 emotion and 0 commitment. It is not the exact same, but certainly not 0.

14

You could try those cent accounts.

So with 100 USD you get 10,000 cents. Which will feel as a nice sum to manage with the real commitment money management begs for.