It’s a good idea to explain about why we must use demo account first before we opened real account. Yes, we must try to apply what we have learned in the theory but we use simulation which is made as similar as happened in real trading. We could use our strategy, psychology, and also our money management better if we trained in demo first although it didn’t guarantee we won’t suffer loss.
It gets you accustomed to the environment and the platform, how the prices change in real time. It educates you about Spread, Pip, Bid Price, Ask Price, Orders, Positions, Take Profit, Stop Loss, Slippage etc. And you can do some back testing, that when the market do this so then what happens and what time of the session. It is not necessary to do it for long time it’s until when you get to know and understand everything. Everybody is different and the way they learn, some are fast learner and some are slow.
This is ok to work out the things like spread, order types, different market dynamics etc. I do however wonder if people realise how different trading a real account is in regards to the emotional demands.
I absolutely agree! The psychological preparation that one needs to trade with a real account is not something you can get using a demo account. However seriously one takes his demo trading, the fact remains that the demo is risk-free. This means that there is no adrenaline rush, worries, and most important of all, there is patience!
Demo enables us to hone our skills withouta ny risk taking at all its advisable for newbies to open for a demo account first untill they are confident enough to do the actual trading,but as many would say that not to be stick with demo for so long it is also better to open on small amount to feel and experienced the real actual trading.
If someone is new to trading I think that the demo account is a must for quite some time to understand trading. However, if you understand the differences in playing poker for matchsticks or for money then you will understand that there is a lot that a Forex demo account cannot teach you. When trading for real you will experience emotions and psychology that didn’t come close to touching you as a demo trader.
Demo and real account are different when we work on them .In demo we are get profit very soon due to the high amount of capital either we are making risky trading or not. With loss we can deal next time effectively but in real account our performance is some thing different.
For me, demo account is just a flat form to learn but trading live is so different. However, if your so attached with trading in demo you might get carried away when you go live.
see in demo account you will do all things same but you will earn and use virtual money but in the reall acount you have to use real money and you earn or lose real money
I would only say demo is useful for testing your trading plan/strategy and also familiarising yourself with the platforms.
People start behaving differently when real money is involved (emotional attachment) and it’s not until you trade live that you understand your own strengths and weaknesses.
I agree with you…
But trading in demo contest will be more good for all newbie.
Why??. you can try hard for learning the trade and willing to win the contest…
Yes demo account enabled us to familiarized the trading platform of our chosen broker and hone our skills.But after gaining confident one must move into live trading with a small amount to start in order to experienced and know the real world of trading.Yes demo doesnt involves risk since there is no real money that is present which is the other way around of actual trading but one way or the other we still learn from demo account .
The difference between live and demo trading I failed to grasp initially, and it wasn’t until someone put it into a sceanareo that I understood (sport) that it became clear to me.
When you play sport, if you put time in on the training pitch, then your skills and ability to understand situations in a real game improve. Using a demo account is like the traing pitch, where as a live account is a competative game. The more time, you spend practicing the basic fundimentals in training, the more likely when it comes to the crunch that they will stand you in good stead for the real thing.
It does not guarantee success, but it puts all the tools needed for success at your disposal, you just need to know when and how to use them. A great example is in basketball, you can practice taking shots from the free throw line every day, but that does not guarantee that in a game you will hit every shot, although it does increase the chances of you making the shot more often.
Take a look at this infographic as I think it explains it rather well. While every trader needs to make the decision themselves, it is safe to assume that most will make the wrong decision based by misguided marketing.
This is my mindset. My demo account is real. I will practice this for a long time, so that when I go live, I will be trading the same way. These questions will be answered when I think I’m there, and will go live: have I proven to myself that I can make consistent profits…have I settled down emotionally and can keep it cool when I lose…is the account balance growing or at least not losing, over time…do I have AT LEAST 6 months of records to prove that I can make money consistently. Sorry, I just do not buy it when people think they can go live only after like 3 months of learning the trade. That’s absolutely nonsense. Only unless they have money to blow, and think nothing of it. Sure. But, if money means anything to someone, it’s gonna take a long time to figure out this game.
This helps me out a lot also…I have another demo account open. I use that for practice. That’s my demo account. I trade seriously with my real account. (demo…but REAL).
I should have posted this here… so I’m re-posting from another thread…
(I couldn’t agree more)… the only way to consider a demo account not useful is if you’ve missed the purpose of it… if someone tried out some demos and then rushed to open a full “pro” live account, it’s only normal to find himself in a completely new surrounding where the previous rules do not necessarily apply… but imagine if you deposited $1000 and then opened the MT4 for the first time… good luck with that :30::41:
