Hello to everyone!
My name is Hilal. I started trading three weeks ago. The first demo account I created I blew up mainly because I was too greedy. With the second demo account I tried to be more cautious and so far it has worked out well. Since I wanted my demo account experience to be as real as possible I chose my initial capital to be as little as 100 Euro. For those two weeks I have managed to make to 196.25Euro. I’m wondering if these are realistic numbers? I mean is something different in the real account which might stop me from having the same success?
Yes - many things. Both practical/mechanical and psychological.
The most important key concept is probably the statistical one that your sample-size needs to be statistically significant before it can suggest the probability of being duplicated in a live account. (But there are many other “key concepts”, too!).
I’d strongly suggest that you don’t even think about using a real, funded account until you’ve collated the results of a minimum of 300 consecutive trades on demo without making an overall loss, [B][U]and[/U][/B] traded on demo for a minimum of 6 months as well, whichever is the [I][U]longer[/U][/I].
Hi Hilal, I found that [U]psychology[/U] was the biggest difference going from Demo to Live… the stress invoked by real money… start with micro lot positions… unsuccessful micro trades generate micro losses… the experience is major.
I agree with Lexys… trade the Demo until you are comfortable of what you are doing… Even though I had substantial capital available to trade with, I started with a small account ($500) so if “I blew it up” it wasn’t a crippling loss.
Now most of my Demo strategies revolve around 0.01 lots per pip on a $200 account.
I agree with the previous posts. Definitely the psychological factor is the main difference. It is easier when you are trading on the Demo account as you feel more confident and you don’t care if you lose. But when you switch to live, fear appears along with greed and impatience. If you manage to control your emotions, train enough time on demo and take small steps while going live, I think you will be ok. The other main difference is that there is no slippage in demo so take this into consideration as it usually affects the trading results.
Sebastiano Can you elaborate the term slippage? I mean i know what this is but reason i ask this again n again n again n then again because this is the only fear that holds me back from shifting on to the real account and guess what? no matter what so many people tell me the fear does not go awayyyyyyy… i have been trading virtual money for over 8 months now. Major currency pairs but different account sizes and strategies (i try to base my strategies on simple Price action… i mean really simple. nothing other then support reseistances and MAs). And i no matter how real i try to be (even making some bold moves just to see if they can wrong) my account size never stops getting bigger. for last 4 months i have had no loss, not a single one. buttttttt… since i am on demo i dont face this slippage problem and i read about it as a major difference b/w Demo and Realtrading affecting trades.
Yes a lot of things. Live account is completely different. Its much about emotions and money management which can’t be felt in full on demo account (because you basically lose nothing and there is no psychological pressure). My main advice is to ALWAYS set stop loss and cut losses as fast as its possible (if it doesn’t contradicts earning opportunity)
I’d mirror what has been said, highlighting that psychology was always my biggest demon. In fact it was such an influence in my own trading that I had to start my trading approach from scratch, scrapping my entire way of previous thinking.
Finally I managed to structure a trading approach that requires me to login at 4.45am UK time, place pending orders and exit the platform at 5.00am UK time. Essentially I eradicated the issue of ‘psychology’ by creating a set and forget system using OCO limit/stop orders. It’s worked well and I finally have the time to do other things during the day in question. Mind you, it’s taken 8 years to develop.
Hey Shehryar, what I mean about the slippage is that in the demo version it doesn’t exist because the trades are not actually transferred to the real market. High slippage is most likely during important news release so make sure to explore this and avoid it. It can also occur under calm markets, when the banks have not yet opened and the liquidity is lower, because the best Bid or Ask price and volume are not enough to match all the requests. You should actually be concerned only for negative slippage. If you are so afraid but in the same time confident in your skills and strategy, perhaps you could try to open a micro account to see how it will go on the real market. You will see that the more you practice the less scared you will feel. Good luck!
Demo accounts are designed to help newbies especially to get familiar with their trading platforms and also to develop strategies to successful trading. However, successful trade in a demo account does not guarantee the same successful and risk-free trading. I’d recommend that you continue learning. Never stop demo trading. Never be afraid to lose money and quit. It is not that complicated as long as you’re willing to spend the time to learn about it.
You need to practice more and more! Now you can use cent type live trading account, but professional live trading account is not appropriate choice for you because of your immature trading skill! Make a 1000 trades and then count your success ratio! Don’t try to make huge amount of money in a short time, be logical always! Best of luck, happy learning!
Micro account doesn’t give you access to the real market because of insufficient trading volumes. Your orders are executed in house with the broker acting as a counterparty. If you want to avoid trading against broker find competitive and reliable platform which reveals name of their clearing houses and liquidity providers.
Youre right. But anyway, I recomend to svitch to cent account first, not to live. As for me, trading on cent account was helpful to feel this emotional aspect of live trading, when you risk real money(even if its small).
Yes I too agree that first should start with small account only to test the live trading conditions. Atleast it will provide the sense of trading with real money which will somehow deal with the psychological barrier in demo & live.
I agree with you that the psychology is the big difference when you trade on a demo and then on a live account. The stress that you are going to treat is higher than before.
Another big difference is slippage and requoting. It’s something you won’t see on a demo account, but depending on the broker you use you could see it pretty often on a live account.
