I often hear, that trading on demo account and live cant be compared. And I dont really understand why. The priciples of trading are the same. The only difference is that on demo you trde virtual money.
So, what does the traders mean? Is it about psychological aspect? Because, when you trade real money, you become more nervous. Or there are some other issue?
Exactly. It’s about the psychological aspect. When real money is involved, emotions gets involved too ! Emotions are kind of an enemy to logic and reason especially in a field where you can lose thousands of dollars in seconds.
Losing fake money isn’t the same as losing real money! You’re more likely to change your plan/ system or your stop loss if you’re using real money. The fear will be more present with real money and that will make you do things that are not according to plan…Unlike in Demo, you really don’t care that much of losing something that doesn’t really exists !
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The psychological pressure of trading with real money is certainly not something that can be overlooked as a factor. I can only speak for myself, but I can tell you that once I started trading on a live account I was a lot more stressed than when I was trading on the demo account, and that had an effect on my decision-making process.
The main difference between Demo and Live is that on demo you (usually) cannot get any slippage on execution. However there might be also some other differences depending on your broker so for sure first ask there for detailed information. All things like pricing feeds, spread/commissions, symbols specifications etc. should be same on Demo and Live.
On the other hand, what you mentioned about the psychological aspect is completely valid. You make decisions easier on demo because you don’t care that much about the virtual money there, you don’t pay that much attention on risk management, lot size etc.
And still you should never go live before testing everything on demo first. See how things work, build your strategy, make mistakes and learn for them… For sure you will learn a lot more when you go live but on demo you can get the main idea.
I think that’s what most people are primarily referring to, when they mention the differences, but the other points made above by Eyedfondue are perfectly valid, too: in theory, there “shouldn’t” be practical differences, but there can be, over slippage etc., depending on the broker.
In general, one shouldn’t assume that one will [I]necessarily[/I] be able to duplicate [I]perfectly[/I] in a funded account the results one’s produced on demo.
Hi to everyone! How do you think, are there any tricks from brokers on demo account? Is it easier to get profit on demo?
Demo server might good than live server, in demo account will rarely facing requote problem but on real account sometime often facing requote and this is also making trader being emotion sometime, but if making comparison server live between broker also has different speed execution
Definitely the major difference between the demo and live account is psychological aspect during trading. State of mind while trading matters a lot and when a person is dealing with the real money it makes a huge difference. during real trading Emotions come into play and can significantly affect the trading decisions. Also it seems to the person that he can certainly make more profit in demo account as stress, fear, emotional involvement all affects the trading in live account.
Some people recommend to try cent account after demo. So, you trade with real money, but with really small sums. How do you think, is it a good idea? Are there any requotes and slippage, while trading on cent account?
I think it is, in principle, as long as people treat it as a way to learn and practice with real money, and not as a way to try to get rich.
Sometimes; it depends on the broker.
As for me, Im testing scalping strategy, so slippage is really important for me. But what about traders, who have more long term strategies? Changes in price in some pips doesnt really metter for them, isn`t it?
Requotes are possible when broker uses instant execution method and slippages are usual, if there is market execution. Am I right?
What kind of execution is better for scalpers, how do you thing?
The psychological aspect is certain a factor and a large one at that. Apart from that, on a demo account you always trade under the best possible circumstances, while on a live account there’s slippage and requotes which can affect your trading regardless of the type of account you have.
Might because different server between demo and real, sometime I am hear if on real server account as broker they can intervention to disturb transaction like as we often facing requote or slipage etc
I have seen many of us consider demo trading as dull. But for me not that dull at all, actually it is totally different , live account is the real market and many financial things affected the market , and it is different with demo account which is positioned as the “perfect market “ by the broker that we use, so that is why that market is good for newbie who want to trade as the place to learn only and make theirselves more familiar with the platforms.
in order to me , the best way is for someone to get a demo account and then try Forex trading without the benefit of any training or even reading of the basic of Forex trading, this way , you will get confused a lot and therefore , if you get attracted to the trade, you will search the web and find out and learn about the things which are making you confused.
I used demo account for some months and then, when I became profitable on it, I decided to go live and created cent account. And it is abdolutely different feeling! I trade with small money, but feel so excited and sterssed all the time, that sometimes close orders earlier, just because Im stressed too much. Hope, its a metter of time and I`ll become more calm.
But I strongly advise you to try micro account after demo and not risk big ammounts of money.
Yes, I know this feeling. This is what we are talking about here, a psychological aspect of live trading.
Trading on micro account is really good idea, I also use it.
Me too, still use micro account or cent account, as level beginner this kinds account is safe than standart account because value per pips is only one cent, for learning purposes if can increasing money on micro account hence also will possible money will growth
I have gradually moved away from a cent account, but I still too prefert to trade with small sums and not take any excessive risks. I’d rather profit less and lose less than profit a lot and lose a lot.