It depends on different factors that how you manage both accounts. If you really want to earn money then you will be serious at your learning with Demo account.
If you watch closely the price on a demo account and a live account from the same broker, side by side, most of the time it is in sync. Watch again when price approaches a critical S/R level and you may see one lag the other! That may well be broker manipulation. That may go some way into explaining why your SL’s get triggered on your live and not your demo, or your profit target gets reached on your demo, but misses completely on the live.
It may not be psychological / human factor as is widely accepted. The way to get round this is to trade off a demo and link it to a live using a mirror like FXBlue.
do you manage at all demo or real account at the same time ? any experience ?
Live trading is very different from demo trading. Because in live trading you lose your money. Loss of money causes huge affect on your emotions. You have to control your emotions, avoids risks and you have to think well before making any move.
I have learned that managing your risk is never going to be easy. Sometimes we win and sometimes we have to accept the loss.
Yes this learning and accepting plawa of trading will guide you to real and right trading. If one is able to manage risk he will do just some mistakes that are natural he will not do trading without plan. Then live trading will not be a loss for him he can come out of loss or make good profit pips .On demo profit is much easy than of real trading live trading need a lot of management qualities.
Nothing in trading is ever easy, if you ask me. The more I learn, the more I realize how much I’ve left to learn.
@LauChoKun, you have hit the nail on the head!
People seldom trade the same way on a demo account as they do on a live account. They should, but they don’t. That’s a wasted opportunity, because a demo can be a great tool to develop a trading plan without risking real money.
- The first step is the treat your demo account like a real account. Use trade sizes that are realistic for the live account balance you intend to have: Pip value for 500 bucks on metatrader 4
- Then make sure you use appropriate risk management: Leverage and Margin
- And when you start trading a live account, stick to your plan: How do you deal with your loss?
nice answer , sometimes of course we have to accept the loss percentage. but practically we making losses we cant control the emotions.
Yes, demo is a great opportunity to the new traders; but they have to open the demo with an educational mindset.
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You have answered your own question. Another reason maybe because there is no active pressure in demo account trading. Trading with pressure has a direct affect on your performance. You need to have actual nerves of steel to be prone from the pressure. What do you think about it?
Hi @Cariar,
If your trading requires nerves of steel, then it’s possible you’re risking more money than you should. You should only trade with risk capital. That is money you can afford to lose, so your trading does not cause you so much stress it leads to emotional decisions.
Forex trading involves significant risk of loss and is not suitable for all investors. The good news is forex traders have tremendous freedom to choose the level of risk that is suitable for them. For example, with FOREX.com you can open a trading account with as little as $50. Some smaller brokers let you open a trading account with even less money. Also, micro lot trading is offered by most retail brokers which lets you risk as little as 10 cent per pip on a trade.
Increasing leverage increases risk. The good news is you don’t have to use all the leverage that’s available to you. It’s important to understand the difference between the maximum leverage available to you, and the actual amount of leverage you are using. Maximum leverage is like the top speed your car can reach, while your effective leverage is like the speed you actually drive your car. And just as you would never drive your car at its top speed, you should never look to open trading positions so large that your effective leverage reaches the maximum leverage available to you.
That’s because leverage magnifies both your gains and your losses. Beginner traders tend to think only about how much money they can make and don’t pay enough attention to how much they could lose. You may find this article helpful in understanding the rationale behind risking only 1% of your account balance per trade: http://www.newtraderu.com/2016/07/19/important-math-trading/4
It would be very hard to limit your risk to 1% of your account balance if you are using more than 10:1 effective leverage. That’s why studies have shown that traders who use 10:1 leverage or less tend to perform better than traders who use more than 10:1 leverage.
Regardless of the maximum leverage available to you through your broker (30:1, 50:1, 100:1 or 400:1, and you should be concerned about the risk management of brokers offering extremely high leverage to clients), you can choose to use 10:1 effective leverage (just as you can choose to drive 45 mph, whether your car has a top speed of 155 mph or 255 mph) which would equate to one micro lot (or 1000 currency units risking 10 cents per pip) for every $100 in your account balance.
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Demo is the account where you don’t be afraid of losing the money. That’s why you do your trade having full control on your emotions this is the reason behind the success on demo account. But in case of live trading when you lose your money than you lose control of your emotions which is the reason behind your loss.
One can do emotional trading on demo account he takes many bold decisions that are not possible on live account but he not faces effects as he can feel with live trading. It is good option to trained himself through different dimensions using demo account. He can manage his emotions and understand which market conditions can favor him by doing analysis.
That’s a classic problem. If you are incurring loss on your live acount then perhaps you need to go back to demo trading. The main reason is that people are generally unable to take their emotions into account. As soon as you start trading live there’s an adrenaline rush, a surge of anxiety and fear you did not experience on demo. The fear of losing money, actually losing it, grips traders and leads to more confusion, indecisiveness, stress and careless calculations. You have to be balanced and calm or at least you can start trying.
That happened to me as well. But don’t dare to give up, learn from the mistake is your only solution to get it right. Focus on your mental difference between demo and live.
It’s been three years, are you still trading and how’s it going @Xskppy?
In demo account you do a trade fearlessly. You can easily controls your emotions. That’s why in demo trading you always win. But in case of live trading controlling your emotions is too hard. And chances of making mistakes are higher if you can’t control your emotions. You must have come to the live trading only when you have some skills, education and experience.
Hi , yes I’m still trading. I stopped using signal providers and stopped looking for the holy grail of indicators. What I do now is concentrate on 1 pair, use a few indicators and stick to the daily charts. I’m breaking even so far this year but that’s a step up from losing. I also sometimes take the opposite of a trade if I have been successful a few times in a row.
But without a crystal ball it’s an educated guess at best . How’s your trading going?
I’ve also scaled back my trade size to give me more peice of mind when the trade is placed. Once my trade goes into profit I move my stop to break even and see where it goes that way even if it does retract I’m not down money.
I think that the biggest reason for this occurence is that there is no pressure in demo account trading. You must be trading freely in it. But there is a lot of pressure in live trading as the money is on the line. You need to factor in this reason and then trade. Maybe the results could change.