I’m looking at getting into forex, but before I even begin using a demo account, I want to understand absolutely everything I can about the basics of forex. In a lot of my reading of peoples experiences, I find it common that people are very successful in their demo accounts, and then when they get to their live account, they lose it all, even if using the exact same strategies. I haven’t really been able to put a link between why this is. I was hoping somebody could shed some light on this for me. Thanks.
Most will go on about, psychology, there is an element of that, but what it really shows up is your system’s weaknesses, so it’s the system and the way you operate it, otherwise it’s identicalish.
So really, demo accounts are best used for learning and tweaking a new system? If this is the case I assume that even long time expert forex traders use demo accounts to test new systems and such so they aren’t risking their money.
Im going to tell you my thought on this…
Although I havent traded huge lots, or accounts, I do know this, Its mental…
I see alot of demos running, but everyone starts with large accounts, and high leverage…
You should demo, with an amount in which you tend to deposit.
Heck, even try with a smallest amount you can.
Something else, and its probably just me, but its all about the PIP, or points…
Get the brain to realize, Pips, and not $ signs, so when you get in the higher cash values, the brain only sees pips, not 3,4,5 digits… Its a brain game, inside and out…
Going on Tilt also seems to be a big factor… Means, chasing loses, more-less…
I have traded real money, but small amount, and I may not be able to give a full report, but thats my take on it.
I’m very, very familiar with tilt and how to manage it. I’m a very avid poker player, and tilt is part of the game. Having played thousands and thousands of hours of poker I’ve learned how to keep my emotions in check when there’s money (big and small) on the line. So hopefully this bodes well for me when I begin my adventure into forex trading.
I see, when there’s not real money on the line, people will take more risk (high leverage, no stop loss, etc) so they can win big, but in the real world if they lose just once like this they can lose it all.
I speak of high leverage and stop loss and pips, but quite frankly, I’m still not 100% sure what those are, I have a good idea, done some reading, but I don’t think I’ve fully grasped the concepts yet.
I look at some of the charts in peoples journal threads and I haven’t a clue as to what I’m looking at. So does anybody recommend some good books, or online articles, or anything on beginning forex? I don’t want anything flashy that’s gonna tell me I’m going to get rich quick, or any other hoopla. I want a book that’s going to teach me basics and fundamentals that I can refer to once I start learning different strategies and systems and such.
Thanks.
If you plan to use indicators, read up on the one you like MOST, meaning, choose 1, and practice with it, read up on it, and test yourself even, I write things down, and have my wife go over them with me,… Like flash cards, I do this with candle stick patterns too.
A big part of trading is Memory, and being able to regonize things, that you seen in the past, or intuition, if you will. And the only way to do that, is thru chart watching…
Make your own plan, and just my opinion, base it on Price action… There are some very great threads here in babyPips, But price action is where the bread and butter is at. again, just my opinion…
Train the brain,
I certainly appreciate your input.
I’m not quite sure yet what a candlestick is, but I do know how to burn one!
I just purchased this book:
Trade What You See: How To Profit from Pattern Recognition (forum won’t let me post a link yet)
It seems this is a highly recommended book by a lot of people.
Price action, I’ll keep it in mind when learning and researching!
There is no difference between demo and live except execution. The people who say they were successful on demo and are unsuccessful live have lied, extrapolated and exaggerated their gains on demo ie: they traded successfully for 1 week on demo in a ranging market with RSI and say they have been demoing for months.
What is RSI? (I won’t know if I don’t ask, and I ain’t scared to ask!)
I notice a lot of people tend to ‘exaggerate’ on forex forums. Kind of hard to separate the truth from the fiction.
Another thing I noticed is a lot of ‘hidden’ or subtle advertising pushing for the use of specific brokers/programs/etc. That can get kind of annoying when just trying to read some facts.
Relative strength index indicating whether something has been overbought or oversold. Pointless to be honest because to say something is oversold or overbought it needs to be compared to some fundemental standard. Since RSI doesn’t actually compare to a fundamental then thinking overbought or oversold means anything is flawed.
Well, demo and live is NEVER ever the same. In demo slipping is different and you need no fills. Means, it’s an artificially price quote and your order will be executed no matter if there would be no buyer/seller in real life. That is more important intraday, tho, because for a extraday trader with a good edge a few pips don’t matter.
Well, then there is the difference that with a demo there is no real money on the table.
I use demo only if I get a new broker platform. To look how I can file trades, etc. To check my systems which are all traded by bots I use backtesting, which is the same artificial price like in demo, just a little faster for testing. You will only know if your system works after a while of life trading. Because you can’t see into the future. Plus then compare your life trades with the backtest or demotrades and if those are almost equal in execution and price, well then it’s a sign it could work.
There are systems out there which are perfectly curve fitted either for wrong historic data of prices or whatever and you might have a great profit on demo or backtesting, but the future will give miserable results with a live account. Also more evident with intraday trading than extraday where a pip or two are not that important.
Yes, they are very different.
I once tried to withdraw from my demo account and they would not let me take the funds that I made. They were an absolute disgrace