OK, I was just wondering 
Itās just a few things on this post seemed to not be communicated very clearly, but :DNP
Is that so?!? oh wellā¦ sorry if thatās the caseā¦ 
I will try to be clear next timeā¦
Not to offend or anything, I just wasnāt sure if others or I had answered your question clearly. Maybe my communication wasnāt that clear
No iām not offendedā¦ I truly understand you and i am pretty aware that I am just a newbie and this whole thing is still new to me so i still have a hard time on finding the right words to sayā¦
And I wouldnāt say āI agreeā if i donāt know what they/you are talking aboutā¦ LOLā¦ I learned from all the insights you and the rest who replied from this thread and i really appreciate itā¦ Though I am still on the process of grasping the whole idea of Forex but at least on that process i am learningā¦
[This information is not written by me but it answers the thread starters question]
[B][U]
The Demo Account Myth[/U][/B]
You may have heard hundreds of Forex experts from the famous to the not so famous telling you that before you trade real money you should trade a demo account. My theory is the majority of these guys have no idea how to really trade and they just say whatever sounds good. The whole demo account for 2 months before starting real trading is a ridiculous concept. I will go as far as saying it is the single largest killer of newbie traders.
Why are demo accounts bad? Because they give you false confidence and they do this for two reasons.
[B][U]
Broker performance[/U][/B]
A brokerās demo account performance is almost always significantly better than its real life performance. Generally speaking, demo accounts do not get stop hunted. Stop hunting amongst market makers is a huge part of trading that you will need to learn to deal with right from the start. If you do not you get lulled into this false sense of security and when you open a real account BAM! BAM! BAM! Trade after trade is killed before its time and you are left penniless.
On top of that are all the other different performance issues such as execution speed in volatile markets. Good luck getting a market maker to a give you an immediate entry during a highly volatile period when trading a real account. If you are trading a demo it is completely different. You will probably get an immediate entry. Again this lulls you into a false sense of security; you will think that you can get in at any time. Not learning these boundaries can be devastating in real trading.
Another thing you do not see with demos is what a broker will do if you scalp too much. A lot of brokers put scalpers on a manual execution list which means your trades will not get executed right away. It at times can take over 30 seconds which in a scalp trade can easily be the difference between profit and loss.
Unless you experience these things from the start you will never learn to defend against them. You will walk into the market cash in hand and be torn apart in the first two weeks.
[B][U]
Demo trading mentality[/U][/B]
No matter what you tell yourself, no matter how hard you try you will never be able to treat fake money like real money. You cannot replicate the feeling of trading real money by trading a demo. Trading real money equals real pressure; trading real money equals real losses when you make a mistake. There are countless stories about traders doing fantastically well on demos, doubling, even tripling accounts in just a few weeks. As soon as that trader trades a real account and is under a slight bit of pressure, the mistakes start piling on and the account disappears fast.
Hereās an example that fits in with the whole boot camp theme. If you train to go to war with a plastic gun, pointing it at targets and shouting āBang, Bangā it will in no way prepare you for firing an real gun in a real battle. The bullets flying past your head and the handling of the gun itself, you will have no chance of fighting effectively. Ok, that is an extreme example but it is exactly the same thing. You trade fake money, you take fake risk and you feel little or no pressure. A demo account will in no way prepare you for real life trading.
[B][U]
Sumamry[/U][/B]
Trading demo accounts may seem like the best way to go as a new trader but it isnāt. All a demo account does is gives you false confidence in your abilities and the brokers performance. Do not make the mistake of trading a demo account for a few months before opening a real account. Open a micro account with $100 so you can learn how to trade REAL MONEY. If you canāt afford to lose $100 in 1-2 months on a micro account you should not be trading anyway.
The only time a demo account is truly useful; is when youāre a complete beginner and you need to learn which button does what or when you are testing out a brokers platform.
So are you trying to say that most Forex traders who undergo or those who tell that itās better to demo trade first going before live are too naive on how demo would affect them and most especially their trade?
What is being said (remember I did not write this) is that demo trading has certain drawbacks. One drawback is that you cannot experience what its like to trade in the real market because brokers make demo trading easier. The other is that playing with pretend money is easier than playing with your money. Ultimately your plan is to trade real money so learning with play money cannot prepare you for that.
I like to think of it like this, if I was playing the board game monopoly with a real $10 thousand I would play differently than if I am playing with play money, everybody would.
The writer bring up two very good points.
The suggestion he makes is that you start with real money and I really do not see any sense in trading demos. Three years ago yes but these days you can open accounts with $1. If you put $50 in the market and use it to learn how to trade it would be better than trading a demo account.
First, i wanted to say sorry, i forgot that what you mentioned above wasnāt from you, i mean you were not the one who write itā¦ Sorry for the mistakeā¦ So get to the topicā¦
I do get him on thatā¦ He has a point why trading demo is senseless than trading live immediatelyā¦ So the hanging question would be, why there are lots who still advise demo trading first(even in the School of Pipsology) than go liveā¦ And why does others did not see whatās the importance of what the writer brought up?
The only time a demo account is truly useful; is when youāre a complete beginner and you need to learn which button does what or when you are testing out a brokers platform.
But that is the point demo trading is for complete beginners.
I also gave NickB my opinion on this on his website.
If you train to go to war with a plastic gun, pointing it at targets and shouting āBang, Bangā it will in no way prepare you for firing an real gun in a real battle.
Also yes this is an extreme example or comparison, in fact it is
a ludicrous comparison, losing money is no where near the same
as risking your life. If you lose your money just go out & earn some
more, but if you lose your life?
Open a micro account with $100 so you can learn how to trade REAL MONEY
I agree with this though, after you are comfortable with a
system, the platform you are using, how all the buttons work etc.
in a demo account, then go live with an account level which you are
willing to lose. I would put no time limit on this, everybody is
different, some may feel comfortable after weeks, for others it can
take months.
It also helps if you have been in a position where you have risked
money before, on say poker, horse racing, greyhound racing, spread
betting et al. This helps in the psychology of risking money.
I really donāt care who wrote that but I disagree with some of those points. I traded and at times still do trade demo on Oanda to test strategies and I use my live Metatrader feed and I notice no difference in price. Stop hunting still happens on both. Iād like who wrote that to show us proof on which brokers do this. I would think it is not in the best interest for a broker since they would make more in spreads if they have a an active trading as opposed to someone who loses some money and quits. In any case if a complete newbe canāt succeed trading a strategy on a demo than they will surely fail when trading live so why start with real money. If they get a false sense of security than they are not prepaired enough to trade real money anyway so they better read āTrading in the zoneā by Mark Douglas :). [I]NO Iām not advertising that I just love the book![/I]
If I weāre learning how to fly a plane I would definately not start by using a real plane when you could be using the simulator to give you the confidence and security you need to know what your doing.
To each their own opinions.
Topgun
I think it would be the instant results whether good or bad. I could be wrong though.