Success with demo account - what about a Live?

Originally Posted by ronron

This is a craft that you need to learn; "Assume every trade will against you from the start"

You are implying if you learn an assumption that you can deal with it and act accordingly.

Won't happen. Your behavioural patterns won't change. Therefore you still won't be able to cut it when required.

Now can you tolerate the loss, if not then trade smallers. I've stopped doing Demo accounts because of the inflated EGO I get . Trade small learn the craft you can always trade bigger.

You are fooling yourself.

No behaviour modification is happening here. Still the same emotional responses.

[John4pips]

Originally Posted by cas

Because people have not modified their behaviour and emotional responses to certain signals that require a modification if you want to trade successful with real money over any length of time. Especially with big sums of money.

The most important signal that requires a modification in response thereof...there are others...is to know when to get out.

Anyone who can't modify his/her behaviour and emotional response to above signal will never trade successfully.

One of the best advice i have got on this forum.

[John4pips]

Originally Posted by paidraig

Just my 0.02...

First, you HAVE to understand that when trading spot/cash FX you are trading in the wild wild west. It is unregulated and you have got to do some homework on the broker you choose.

MANY brokers out there will give horrible fills, flush stops...and worse. Seemingly profitable positions can vaporize when the broker insists the order was not filled or received. Pick a reputable broker, do a lot of research and read reviews.

Sorry but trading a paper account is good for a couple of things but not much more:

First, it allows you to get acquainted with the platform and understand how to place orders etc.

Next, it somewhat proves your "system" and can give an indication as to whether you are onto something or not. You should stick with it for several months and be ruthless in recording wins and losses.

Do not assume that you can repeat the performance seen in a paper account with real money. There are a couple of reasons but the biggest as prior posters have indicated is the psychology of it all.

A good trader is not excited when they have a great trade OR fearful/depressed when stopped out. Trading is best done in an emotionless state. Plan your trade, exit and stop BEFORE you enter it. Once you are in the trade remember that plan and stick to it. Don't move your stop, don't second guess yourself. If you get stopped out carry out a post mortem to see whether it was a good trade or a bad entry.

Being stopped out is NOT always indicative of a bad trade. You have to accept losses as well as winners. A good entry can result in a profit or being stopped out. If your system works you need to take each entry provided. If you try to cherry pick them you remove any chance of statistical analysis as to whether the system does in fact work. NONE of us can work out at the point of entry whether this trade is a winner or a loser, otherwise we would be billionaires in short order.

If you want to read up on the psychological aspects of trading try a book (Trading for a Living by Dr. Alexander Elder). There is a lot of material in there about reacting like the rest of the sheep like we are all programmed to do.

Another reason that paper trades differ from real trades is obvious, you are not being 'filled' with anything so have no impact on available bids/offers.

There is a reason that 90% of traders that open a $10k account close/lose it in 6 months. The playing field is heavily sloped against you. Nothing in life is easy. Forex trading is no exception to the rule. It requires a lot of work and discipline to come out ahead of the field.

Use good money management. Ensure EVERY trade you enter has a decent risk:reward. Track every trade and KNOW what your win/loss ratio and average risk reward ratios are. Without having these in order you will slowly but surely bleed capital.

If people tell you you are likely to turn $1,000 into a seven figure account balance in 12 months they are doing you a disservice. It can obviously be done, insofar as it is technically possible. The odds against it are huge but if I were you I would aim at something more realistic. If you turned $1,000 into $50,000 in a year you will have done incredibly well, in fact amazingly well. Personally I think $10,000 is a possible target if you have discipline and a good system.

Good luck!
Padraig

This guy just tell the truth. I may print this post and read every day for a while.
Good job.

[Valkryder]

Of all aspects of trading, I think psychology is the one area that is the most under appreciated. As many here have stated, one can have a great plan, but if you can't stick with it, it all goes out the window. The deer in the headlight syndrome, so to speak.

There is a lot of excellent reading material available, some of which has alredy been mentioned on this forum. Personally, I recommend anything by Brett Steenbarger. He has a number of excellent books. The book by Alexander Elder, Trading for a Living, is very good. Trading in the Zone by Mark Douglas is also very good.

Happy Trading!

V

Originally Posted by Valkryder

There is a lot of excellent reading material available...

Books of theory are of no use if A.C.T.I.O.N. is not taken.

You can fill your headspace with all the theory you like...in the end it comes down to required behaviour that any given situation while in a trade demands.

Trading isn't suited for people who are undisciplined, lazy, disorganized and fearful. That applies to their psychology and their mental state as well.

Unless above behaviour is identified, accepted, dealt with and modified no successful trading over any length of time will be forthcoming.

The sooner people get that fluff out of their headspace that successful trading can be archieved without serious commitment to all aspects of trading the higher the probability that they make it into the 5% group.

[Valkryder]

Originally Posted by cas

Books of theory are of no use if A.C.T.I.O.N. is not taken.

You can fill your headspace with all the theory you like...in the end it comes down to required behaviour that any given situation while in a trade demands.

Trading isn't suited for people who are undisciplined, lazy, disorganized and fearful. That applies to their psychology and their mental state as well.

Unless above behaviour is identified, accepted, dealt with and modified no successful trading over any length of time will be forthcoming.

The sooner people get that fluff out of their headspace that successful trading can be archieved without serious commitment to all aspects of trading the higher the probability that they make it into the 5% group.

People have to begin the process where they are. Did you ever wonder why most professions begin with an extensive study of THEORY in the beginning before delving into practical application? Trading is no different.

[Davidee]

Originally Posted by soul786

.In my own opinion however I beleive the differences are psychological. Knowing that YOUR REAL MONEY is now on the line with every trade could make you anxious (makes me anxious thinking about it). With a demo, no matter what it is desensitized. Losing that $20 in fake money is reconciled by our mind saying 'meh well I could have done this, we'll see next time". On a Live account I can see myself losing sight of the loss being a learning experience, thus clouding my other trades and possibly moving away from my system.

Just my 2cents.

I think you are right. I've asked the question why can you demo trade but not live a lot and got some very insightful answers but still can't completely 'crack it'.

First time I went live I lost £300 in around half an hour.

Some spread betting firms allow you to bet with really low amounts of money like 10 pence per pip and when I started using that amount of money I didn't lose so badly but was never going to make very much either.

Anyway, in the last year or so I came to the conclusion that I would never be able to over come this psychological barrier and now limit myself to system trading, trading a purely mechanical system.

A good trade for me is following the trading rules to the letter - a bad trade for me is not following the trading rules to the letter. I don't pay attention to the outcome of any one trade, the only thing I worry about is did I follow the rules. This is the only way I'm able to trade. Don't know if it's good or bad but I have come to accept it.

Anyway, in the last year or so I came to the conclusion that I would never be able to over come this psychological barrier and now limit myself to system trading, trading a purely mechanical system.

A good trade for me is following the trading rules to the letter - a bad trade for me is not following the trading rules to the letter. I don't pay attention to the outcome of any one trade, the only thing I worry about is did I follow the rules. This is the only way I'm able to trade. Don't know if it's good or bad but I have come to accept it.

That's not the point...good or bad.

Sounds like you have accepted a certain behaviour of yours, dealt with it and adjusted to it.

You didn't go as far as behaviour modification...but then...who knows...what the future might have in store for ya.

Originally Posted by Valkryder

People have to begin the process where they are.

Did I say anything to the contrary...?

Trouble is most people haven't got a clue where they are when they start trading.

Did you ever wonder why most professions begin with an extensive study of THEORY in the beginning before delving into practical application?

Did you ever wonder why most professions with an extensive study of THEORY in the beginning have a high drop out rate before they even get to the practical application...?

Trading is no different.

Ever cared to find out how many ' wannabees "exTrader" ' and Trading Drop Outs there are...?

Just look around here...on this board.

[ThePhoenix]

Originally Posted by Valkryder

People have to begin the process where they are. Did you ever wonder why most professions begin with an extensive study of THEORY in the beginning before delving into practical application? Trading is no different.

I think what cas is more or less getting at is that reading books or theory and never learning to apply said theory, that is actually trading, is more or less useless.

I'm sure like lots of people do, before I traded live I read dozens of good and not so good books on trading that had lots of theory. Most of them made trading seem cut and dry, do this, this happens or even easy.

The leap from reading books/theory, to applying it and actually doing what you read successfully is a big leap. And, IMO, the most important part of learning to trade is actually trading live. I've personally learned more from live trading and learning from my mistakes than most of the dozens of books or posts I've read.

First hand experience beats the stink out of reading or being taught theory.