Better than practicing on a demo account

I am not doing so well at this Forex stuff, so I deceided to regroup and practice some. However, the free demo accounts just don’t seem to act in a “real” manner–nodody tries to take you out if you’re using play money, and winning seems so easy. Anyways, what I am doing now is using a micro account to practice with. A lot is 1000 units, so 1 pip= $.10 (10 cents). Indeed this is real money, and the action seems to be much more realistic than the free accounts. And I treat it as real money–a 50 pip loss is 5 bucks, and 5 bucks is real enough to me in this economy! My goal, however, is not money earned, but rather [B]PIPS[/B] earned. I am keeping track of weekly gains/losses of pips, and learning, without burning through hundreds of dollars in the process. My first goal is to earn 100 pips/week, on a fairly consistent basis.

FXCM has micro accounts, and IBFX even lets you enter a lot of only 100 units, where a pip is worth only a penny. Pay attention to the number of units you are actually planning to enter the position with–I have noticed different brokers use different meanings for the term “lot”. Just remember a 1000 unit position will result in a pip=10 cents. Obviously you can multiply/divide by 10 to see the pip value of different sized positions.


Who’s trying to “take you out?” How could someone know if you were using real money or not?

I was afraid of this question, Yukon. lol OK, this is what I have seen in 6 months. I have seen prices move against me right to the point of hitting my stop, and then reverse and go the way I had wished in the first place–only without me being onboard. I have experienced this many, many times, but never once on a demo account. I have also seen a million times the price move against me the very instant I enter a position. Certainly some of them were just by chance, coupled with a poor entry on my part. But 80% of the time??

Perhaps someone will straighten me out once and for all—are there people/institutions out there that can see your positions/stops/limits etc., and have not only a reason but also the ability to swing the price against you, if even for only a short time?? [B]OR[/B], am I just paranoid???


I can see how the big traders could effect price swings by buying or selling a huge position. But I’d think when small guys like us trade, our tiny positions are not even noticed enough for someone out there to “get” us. At least I hope not, or I better plan on keeping my day job. :smiley: I’m sure others here will know more about this than me. I hope it’s good news. :smiley:

Obviously your broker sees everything there is to see about your position–he/she is the one who makes it all happen. If your broker has to take the opposite side of your position, well, there you have it. If they group together a whole bunch of customers who “buy”, and they have to take the other side (sell) to maintain liquidity, I seriously doubt they are going to try to lose on their position just to make the customers happy.

Of course, I might have this all confused–perhaps some of you veterans can chip in.


i had the same thing happen to me. opened a practice acct. and all went well for almost 6 mo., opened a mini with $2000 and it was depleted within a few mo.

seemed no matter which position i took, it would hunt me down. i figured something was fishy because it wouldnt go past my stop, just to it and then reverse. i cant remember which site it was (almost 5 yrs ago). i just started a new demo at cms, eventually will try another $2000.

Just looking for the right moves…

ok. here’s the cold hard truth. No brokers are out to get you. By taking the opposite position they are not, in effect, going short if you go long. By taking the opposite position they mean that if you go long, and another individual goes short, they offset each other.

As for demo vs real trading, they are identical in function. The only difference is in the impact of real money and emotions. Believe me, I went through this too. I traded and made around 600 pips a month for 6 months straight…not one bad trade.

Of course, after moving to a live account and realizing what actually seeing the drawdown can do really does change things. Plus…I guarantee you that had you started your demo’ing with the same amount you initially started with, the results probably would have been the same.

I do believe that a move from demo to small live account is necessary precisely because of people like you and me but don’t think that the brokers are out for you.

When you place stops that seem to get hit but then reverse to the original direction it most likely means you didn’t place your stop well. Let me guess, your stop is based on the amount you think you can lose right? Most likely so. Try instead, putting a stop at the last swing high/swing low (depending on which direction you are).

I can pretty much guarantee you that if you place your stops right, they shouldn’t be taken out unless there is a change in direction.

It’s not the broker hunting you. At least not unless it’s some little bucket shop. It is institutional traders. Stop hunting is a very valid way of trading.

If a broker manipulated prices to stop people out it would be very easily proven. They would be in seriously huge trouble and incur way bigger fines that our noob accounts wouldn’t make up for.

A decent broker wants you to stick around and trade and be profitable. They don’t make money unless you are paying the spread or their commision per trade.

Compare your live charts to other traders live charts from other brokers, likely the price ranges will be VERY close. I had thought at one time my broker was f’ing me, but it after checking other live charts it was just my tight stops and putting them too close to obvious stop clusters, which stop hunters gun for.

P.S. I tottally agree with you, demo is worthless after a few weeks. (less if you know how to run a platform and already know a proven method with an edge) Better to trade on demo and at least trade a cent a pip. I test all new things with a cent a pip and ramp them up if successful.

Months and months of demo is a gigantic waste of time and IMO laughable.

Great feedback. OK, Phoenix, here is a question-----how do institutional traders know where your stops are?? Do the just try to push the price past the obvious points, like right above/below a major round number?


That is what I have read and been told by more experienced traders. Round numbers, support and resistance, fibs, all that great stuff that most systems tell you to trade off of and put your SL’s at.

I’ve found through nickB’s method that one of the best ways to find a good stop loss is to make it a percentage of the ADR. Average Daily Range.

So, if the range is say 200 pips and it’s already moved 100 pips, it starts to become hard to push price back that far, if everthing is going in the opposite direction. Sure it could happen and does, but you’ll get stopped out less.

I will second that!! :slight_smile: :slight_smile: :wink: