Demo vs. Live

Newbie here, and I just wanted to thank everyone for the posts, school, blogs little the little tidbits. The information here has given me the start that I needed to get going in the Forex market. I have been demo trading for about 3 months and learning everyday by reading new and past posts.

My questions is why is it soo much different going from demo to live. People do great on the demo account then bomb when they get to the live account. Is this because of the entry points? Is there a delay in the live when compared to the demo. I thought that the demo was the same as live just using a demo account. Is there some way to make it more like the real deal, or just have to keep using the demo until you feel comfortable then enter live and pretty much start all over again.

This is why I am a little hesitant on entering into live trading. :frowning:

Could this be the mindset of using you own money compared to money giving to you to use in a demo account? Do people really change their perspective on trading going from demo to live?

If anyone can give me a little insight it would be much appreciated, as I am slowly working my way to trading live.

Thanks for your time and keep pipping to happiness:) .

Hi Gotpip. Its a great step moving from demo to live trading. There is quite a bunch of threads at newbie and forextown covering the ‘difficulties’ of making the transition.
To cut to the chase the live and demo systems are all the same as far as my broker is concerned. How do I know this? I’ve traded the two simultaneously and the entry, exit and spreads were similar the many times I’ve made the trades. This might not hold true for all brokers, especially the ones that use dealing desks to fill you in. Here the demo account might be fully automated but the live one is handled manually and thus there would be a disparity in results.
From my experience I believe that discipline and emotions are what make the difference. When you trade demo you take time looking at the charts, watching fundamentals and when satisfied you don’t hesitate to make the call.
On the other hand when your real money is at stake you use most of your time worrying and second guessing your decisions. Taking the trade is delayed and by the time you do it the environment has changed. Cutting your losses is not part of the discipline and you keep hoping that the move will turn favourable. After a loss/stop-out you try to recoup the money lost without having done a proper analysis. Discipline is thus non-existent.

To be able to make a smooth transition you should amongst other things;

  • don’t trade based on emotions, read the signs
  • don’t try to pick tops and bottoms. Nobody knows for certain how the market will move at a given time, if you got it before and managed to pick a top and a bottom accurately it was just luck. A margin of error has to be accommodated
  • trade lot sizes that do not affect your emotional sobriety
  • stick to a system that you are familiar and comfortable with
  • have proper money management. You’ll need that money in the account to make the next trade
  • when the trade is gone tits up just drop it. Whats the point in chasing 5 pips when you are 30 pips in the red
  • avoid having simultaneous trades that go both ways, i.e short and long. Most people might disagree with me on this but these positions are much more emotionally draining than being on the wrong side of a one way trade.
  • avoid trading during news times (even old hands get it wrong). Think of big spreads, slippage, whipsaws and the odd system failure
  • approach trading the same way you would a business. Discipline and having realistic goals are paramount to your success. When making a journey you don’t just wake up and start wandering outside, you have to prepare, plan, follow through and make changes as necessary if and when need be.
  • last but not least, try to enjoy what you are doing and take breaks, otherwise this might turn out to be similar to a boring office job

This is not exhaustive, use the search facility to find other threads dealing with the same subject.
All the best

The biggest difference I’d say is your emotions. Hey, your dealing with real money now, its not a game anymore. If you can control your emotions, you’ll be good.

Thanks for the info. Pretty much goes over what I have read throughout this forum about money management and your feelings entering in and out of trades. That is probably the biggest factors in a winning and losing trade. I am back testing a few of james systems to see how they work and trying to add a few of my own. We let you know when I go live and how it work out. I would like to see a few of these live trades and see how it works first hand.

Thanks again,

both of these friends, are correct.
in demo you know its virtual money, whether you lose it, it wont effect u.
In live, you are in to it, you get a lil panick sometimes.

So why there is demo, learn and learn, take it serious, think its ur real money, apply anlysis, technicla, fundamental, use everything when you gonna use in live trading.