How realistic is a dummy account?

A babypips member mentioned in a reply to one of my previous questions that, and I quote, “The downside to simulators is that they can’t make a chart go from looking bullish to bearish the instant you go long. You think I’m kidding…I’m not”.
Having only traded on a dummy account so far, I was not aware that the above could happen as I thought the chart information on a dummy account was the same as you would get on a real account. If not, why isn’t it??
I am currently practising with an Oanda dummy account and using their own charting software. I had hoped that this was giving me a realistic representation of trading but if it isn’t it would be a disappointment.
Your comments on this would be appreciated.

I have been using the Oanda game & real accounts for months and the only difference I see is the game lacks emotions. It is very easy to hold onto a trade longer when you have nothing to lose, as opposed to losing real $$ on every pip. I have seen no performance difference between the two except that the game takes longer to load. Trust me, if you can seperate your emotions, fear & greed and treat the game just like its the real thing (and not use 100,000 to start with :slight_smile: ) than you will do just fine.


Thanks for that Topgun. I was hoping that this would be the case. Cheers for the reply.

i traded oanda’s game very easily but when it came to a real account i blew it up, its definatley emotions that mess you up, so if you want to get some more realistic practice i suggest you open a very small account with like 50-100 dollars and trade that, you will probably blow that up but you will gain a taste of the real market and it should help prepare you for when you put more money in. at least thats how it was in my case :slight_smile:


I would not start a live account with so little capital as suggested by gregesa. I would start a micro with 1,000. If you have proper money management you shouldn’t be able to blow that up. Make sure you tell yourself what your maximum draw down is!

I never like trading demo for a long time. They just make it seems too easy to make a good trades. Aside from no emotion, stop hunting, etc to me it’s just so different of an environment when you have made the transition to go live with your money.

Go live but use microcospic risk to really start getting a feel of the real thing. You may lose a little bit of money but I gaurantee you, the knowledge you learn from those microscopic risk will do you more good than spending lots of time in demo mode. “You cannot make money in demo mode.”

As soon as you put real money on the table, all of a sudden your trading IQ will trend as well as your commitment to what you are doing.

Happy trading! :slight_smile:

You can start trading on Oanda with gregesa’s suggested $50-$100. Heck, you can use even less! You don’t have to deal with mini lots or micro lots, since they don’t have fixed lot sizes. So why not get some real life trading experience? As newbie you’re probably going to lose at first, so I would much rather put only $50 at risk rather than $1000.

If you go along with the suggestion of opening a live account with Oanda with a small stake of only $100 (which I would also recommend doing), make sure you don’t have the mindset that it’s only $100 and you don’t care if you lose it all.

You should look to preserve your trading capital no matter how small or large it is. It is vital that you aim to hold onto that money right from the start of your trading career.

If you look at that $100 as the cost of gaining an education in trading then you’ll have formed a bad mental association between your trading capital and learning to trade.

When you get to the stage where you have a much bigger live trading account this could be a serious mental block that you’ll have to overcome.

It’s far better to view a loss on a trade as part of the cost of doing business trading rather than as an expense to be paid on the road to learning how to trade. There’s a subtle difference in the way you should view things, and one that can be important as you take your first steps with a live account.

Hi kamoshikasan, as a newbie myself I find your comment about ‘making charts go bullish to bearish the instant you go long’ to be more than a little scary. You mention this in the context of simulators and I am wondering if this is the same as a demo account? Can you please explain this more clearly? Many thanks.

That’s a fair point. Long-term success does require a business attitude.

Even though $100 seems like a small amount - and really it should be if you are following the advice here - you would be surprised how much of a difference it can make in your mindset. I’m not saying that going from live to a really small account will give you the full experience of live trading. It’s a step along the way, though. Once you have the impact of the shift to tiny account sorted out, you can then step up to a larger one. I don’t mean all the way. Just step it up progressively.

My take on what kamoshikasan wrote is that your mental picture of what you see on the chart changes.

Quick example: let’s say you see a bullish pattern or signal on the charts (based on whatever system you’re following). You decide to take the trade and enter a long position.

Now that you have a long trade entered into the market you go back and look at the chart again. Price drops a few pips, moving towards your stop loss.

You begin to fret.

Maybe price is actually going to go down, and not up. In an instant, your mind now highlights all the factors in the chart that point to reasons why price might actually go down and not up.

You fret some more.

Before you know it all you can see are signs that the market is going to go down. The reason why you went long seems utterly hopeless in the face of all these opposing signs.

What do you do?

All that is really happening is that your mind is playing out all the possibilities of what could go wrong. You see every scenario where things will go bad, which outweights all the things that can go right.

Negative mental thoughts and energy will always easily brush aside positive thoughts and energy if you let them.

kamoshikasan -

my advice would be:

  1. Learn the mechanics of entering trades etc and get a basic understanding of the fx market on a demo account.

  2. Start a mini account and trade with real money albeit small. If you’re trading a mini contract the pip value is $1 which is great to practice with I think. You catch a 50 pip move and you make $50. With the large swings in the currency pairs such as the gbp/usd (with average ranges of over 100 pips in a day) you can see some real action even with a mini account.

  3. Once you’ve got your style down graduate up to the full size contract.

Good Luck!

hey my tips to be a efficient forex trader
1.)avoid trading on fridays and holidays
2.)for about 1 month i have seen that gbp value increases every monday and yen on every tuesday.
3.)dont invest all of ur money in buying a currency.
4.)exit targets are very useful tool in making profit. dont ever be a greedy forex trader.u ll definitely loose all ur money.
5.)remember trend is ur best friend. never go against him.

I will definitely agree with #3, and personally favor #5 as well. I’ll even say that #4 can be good too.

As for #2, one month is not enough to go on.

For #1, holiday periods can either be really dull or really volatility because of thin trading. Friday’s though, are some of the most signficant days of the week, though. Based my own research, about 50% of the time Friday will see the high or low for the week. Monday shows a similar pattern. Tuesday, Wednesday, and Thursday are only about half as likely to see the market make a turn.

i saw this in baby pips. whenever i do a trade in friday i loose money.

To me that probably speaks more to your method or style of trading than to the day. Consider that the US Employement data release is on a Friday each month, so there are certainly opportunities.

Now if you are speaking of trading the afternoon of the US session on Friday, then I would agree. Not usually much going on then.


I was the author of that quote and to the person who indicated it was more than a “little scary,” it was intended to send a message.

Given the message could have been mis-interpreted, let me clarify. The chart does not literally change just because you place an order using real money. What changes (or has a very real possibility of changing) is your attitude toward the trade the minute you place the order - especially if it goes a few pips against you right off the bat. While the chart may well look bullish prior to putting on the trade, a “live money” position can do crazy things to your psyche and all that “bullish context” you formulated to get yourself into the trade can just go away in an instant if you are not used to watching your money go the wrong direction.

The result is people changing their stop limits to exit trades early or even worse, exiting the trade immediately and reversing the position short (only to watch their original long theory play out like a finely tuned instrument). Ugh.

The point is that simulators can’t make you go “nutty” like trading with real money can. If you haven’t traded with real money, I’m sure this sounds like the ravings of a complete lunatic but believe me, it happens all the time - and seemingly moreso to folks who are not quite comfortable with the notion that you do indeed “lose some” and “win some!” Hope this helps/clarifies!

You’ve hit it exactly on the head.

“You’ve hit it exactly on the head.”

Actually, I was the one hit on the head!