i’ve finished from the school of pipsology, please tell me what to expect when I start trading with the demo account, and how does the demo account represent your level of expertise in relation to the real thing?
Demo and real trading are technically the same, but you may well find that your experience does not translate to from demo to real, there is much more psychology at play.
It’s a long road you are embarking on, and most likely will be more difficult than you ever imagined.
You may or may not find encouragement in the forums, but in the end it has to come from within.
[QUOTE=“maxiipriestt;620491”]i’ve finished from the school of pipsology, please tell me what to expect when I start trading with the demo account, and how does the demo account represent your level of expertise in relation to the real thing?[/QUOTE]
You’ll need to formulate a trading plan while demo trading based on what styles of trading speak to you naturally.
By now, you should have an idea of what methodologies peaked your interest while going through the educational material on this site.
Work out a strategy and try your best to stick to it via demo…you’ll have nothing to lose.
The three things I’d recommend most if you do decide to go live eventually are:
- Keep your leverage under 10:1
- Journal every single day
- Set reasonable goals
Focus on the process not the monetary results.
Your trading plan will need to cater to your time and capital restraints - not everyone trades the same exact methods.
Jake
Forex unlimited makes some very good points so i second them all.
Something you will also find is, it might be a bit of a discovery exercise in regards to your own personality. If you are patient or impatient different strategies are either good or bad for you. Some strategies have a lot of small wins and then a big loss (trend following etc), some are a lot of little losses and then a big win (reversals etc). If you’re easily frustrated then trading reversals is hard.
Most of all keep things realistic and understand it will take time.
In my experience Demo accounts can help you understand the platform if you are new to it but the feeds are very different and you have to bear in mind that this is the brokers window shop so it is perfect, I know of no one who had an issue with a demo. This also echoed by Anna Coulling one of the most successful retail traders in London.
I think you must open a micro account trading 1k lots and smaller is a great way to experience live trader and of course loosing is part of trading so I won’t fear the loss. Besides if you can’t afford to loose 100 quid you shouldn’t be trading at all. This will allow you to experience the broker and most importantly meet yourself and your emotions. I assure you all those demo decisions you took will look insanely fearful on a live trade.
Demo account just gives you the an sight into the forex market, things change as your real capital is invested.
Hello ‘maxiipriestt’, and welcom to the BabyPips collective.
As ForexUnlimited and Emeraldorc have said, you should definitely have a plan and risk small…
I think that, as Emeraldorc said, opening a small account to trading 1k lots would be absolutely
fine… That is just what I did… My account started at Christmas of 2013 with only 500 Pounds
and I only traded the smallest possible amount: when I diverged from that, in a flight of euphoria,
I ended up shooting my good work into the grave and losing quite a bit, but I have been good for
the last month and the account has been growing steadily.
People that treat a demo account seriously and who risk money with appropriate sizing will not
suffer from ‘going live shock’: only those who do crazy things with impunity on a demo account
will have palpitation when putting on their first live trade… I mean, if you traded small and within
a sensible percentage of your equity, with stops, when on demo, it is not going to be such a frightful,
sleepless experience when going live; on the other hand, if you traded with 20:1 leverage and ridiculous
gambling exploits on a demo account, you will be sweating your brains silly while glued to your screen
on your first live position, betting all your hopes on a 100,000 (Standard Lot) position on maximum leverage,
until either you get lucky or you kill your account in a single trade…
So, as ForexUnlimited said, keep your leverage low, track your progress in some form (do not become maniacally anal about noting everything, but have some record of what you are doing), and be reasonable about expectations…
And if you really want to buy a Lamborghini through Forex trading, well, there is only one Amy Sangster …
Cheers.
A couple months ago I graduated from the baby pips school as well and have been practising on a demo account since then.One thing I’ve learned over the course of it is; you need perseverance, losing is not easy and you have to endure the pain multiple times over. I thought I’d get used to losing fake money, I have not, its painful every time, you just have to try to embrace your loses and learn from them and then move on.
I’ve learned that it is not that hard to close profitable trades,what is hard is learning to do so consistently. I am at the point where I can make profits but I need to set my stop loss far away which makes it insanely difficult to get a risk to reward ratio of 1:2.
In terms of actual trading I do not know, those commenting above have good advice that I think I will follow as we’ll, but overall that’s what I’ve learned so far.
Good luck, and remember to PERSEVERE!
This is one article from PaxForex who I think will help you to make your decision. Forex trading – Demo or Real? - PaxForex
Do you have backtested your strategy before going demo? it speeds up the process and gives you a pathway to create/probe a winning strategy. Forex tester is the best sw IMHO and I use it even today to refine and retest my trading ideas a lot.
come on… do you mean I can’t get rich trading forex? the case of not being able to buy mr a Lamborghini puts a damper on things. well, i’ll hedge my bets because i’m a daredevil fella who can take risks, but not stupid risks. i’m grateful for the advice you have given, bit i’ll take my chances. thanks
LOL… it’s your money man! bring it to the markets so others can buy the Lamborghini… but don’t look for expert advice just to look the other way the second you hear the truth. People surprising about the “95% of traders lost in the markets” data? Come on… it has to be 99% of “deaf” traders lost all his money… for a reason.
Hey milos thanks for the reference to forex tester, I’ve been looking for something like that for awhile. Is it easy to learn or will I have to spend some time on it to learn the mechanics?
It’s pretty easy to learn… based on MetaTrader the interface is similar. You have to download the historical data for the pair you want to test and then begin to try your system. The program save the stats for later use.
Worth every penny!
I look forward to trying it, thx man.
You also can adjust the speed so for example, could try a system for a full year in just a week or so (varies depending in some factors of course) but got the point right?
That way you can test the profitability of a strategy in deep before going demo.
Wouldn’t it make more sense to backtest before going live rather than backtest for going demo? Just askin’
For become a good trader i needs lots of knowledge and experience but if any senior share their experience ans knowledge with me then it’s give me proper guidance and encourage to straggle in this high risky business.
That’s a very good question, so please let me explain in detail the rationale behind it, point by point to assure everyone is talking about the same theme here:
a) All of us are involved in trading to make money. As simple as it sounds, obviously we know right now is not that simple. But at least, after we’ve graduated from Babypipschool or attend some course or even have learning by ourselves the rudiments of trading in forex, we can bring to the table two critical assumptions:
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To make money we need to develop, before anything else, a well rounded Trading Plan to follow.
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As part of this plan, at least one very rock solid and profitable strategy/system/whatever, you named it.
b) Different approaches gives different systems, but noobs generally comes with a system taken from a forum, a trading guru, a book, a seminar/webinar. It may involved price action, candlesticks patterns, indicators, fundamentals or even a mix of some, but the fact here is:
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You have to write it down and be as specific as possible.
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Your have to include; Financial instrument (in our case Fx), Pairs susceptible to trade with it (all of them, USD pairs, GBP/JPY, crosses, exotics…), time or session where the system is valid, timeframe to look at, the guidelines to apply the system including entry and exit signals, entry point, exit point, where’ll be the stop-loss and take profit and why, to named a few…
c) Now how are you supposed to trust the system only because someone else say it so? it’s really profitable? we know the system so well we can apply it blindfolded in the heat of the markets, consistently day after day? at this point I don’t think so…
You can go live for sure but it’s your money at risk and taking the system live without prior testing is even riskier than gambling. May go well and may not.
Other option is demoing it before going live but the timeframe necessary to test the profitability or convenience of the system could be too long. You’re in real time, have to test the system over an entire year market at bare minimum, in different conditions and if the system only applies let’s say in the European Market Open from GMT 08:00 to 09:00, this could be only 240 trades in a year in best case scenario.
This is not acceptable as an statistical representation of a larger period and number of trades. You have to probe the return expectancy of the system. So you need more… I don’t think you wanna wait so long, right?
d) So now we can go to backtest the system… You can use MT4 but I prefer Forex Tester because it’s specifically designed to this work. The software is based on MT so it’s very similar and among other advantages over testing in a demo account you can adjust the time speed, the program tracks all the statistics for you, you can go back and forth…
e) OK I have backtested the system and it looks pretty good! Let’s make some money, huh? No, no, no… wait a minute. The system is profitable but you tested with historical data in no real time conditions. Are you sure it will stands the heat of the battle? are you capable of use it day after day? to clearly see the entries, the signals, the analysis of the charts, the review of the pairs for the system…
Think about a car. You have designed it in the factory, build it piece by piece, the engine roars like heaven but before it can even be in the streets you have to probe it for sure in a closed road, a test road… this is demo.
Hope this clarify a little my methodology, it’s no different from what the best traders are using right now. I have made a living with it. Don’t look around, it’s here for all of you.
But it’s hard, boring and painful sometimes. Backtesting is not funny, I know, but it pays off you don’t know how much boy.
After weeks of testing, hundreds and hundreds of trades you wanna go make some money but have to keep enduring it and probe to yourself it will stands in the markets, with discipline and hard work.
Sorry for the big post, believe it or not it’s just a little example of what I want to say.
Very inspirational speech Milos! I would agree; back testing is fast and a great preliminary method of seeing if the strategy is profitable, but the only way the individual can see if THEY can be profitable is to use a real time demo.