For those people who had gone live. I just like to ask is demo before live
that important. I do agree that there is alot of difference between demo and live.
The emotion of losing consective trades is defintely different from losing at demo. however, shouldnt one be at least be profitable at demo before going live. Or there are those that infact failed at demo and then become success
at live. Anyone?
Does becomeing serious at demo does help one person to be or at leas be prepared at live. I mean if you can felt the anguish of losing consectuive trade at demo. That would defintely be a bonus to be more prepared.
I would defintely like to hear more from those senoir live.
A number of individuals find they can trade profitably on demo but not in real life. Hence demo success means little in the real world. However if you cant make it in demo then you have no chance with real money. Demo is about nailing down every aspect of your approach so that you can do it in your sleep and in my view is a critical part of trader development. Do you think surgeons go into the operating room for the first time without any prior practical experience under safe and supervised circumstances, and if they did would you want to be that patient
You bring up a good question, since as tony said it’s a completely new thing when you go live to when you’re trading demo. I think EVERYONE makes a ton of money in a demo account and then blows out their first live account. That’s pretty normal.
That being said… it will never hurt to demo for at least a month. If nothing more than to familiarize yourself w/ the trading platform. It’ll always be worth it.
But then, I do suggest going live as soon as possible so you can also tackle the learning curve that applies to live trading. Like I say… everyone makes a lot of mistakes, but that’s how you learn. So personally, I’d like to get those mistakes out of the way as soon as possible.
So the way to do that is go live but with a small amount of money. Then you can make your mistakes and even blow your account and then come back w/ more money the next time and don’t make the same mistakes.
I think the very high percententage of failures answers your question.
If you go into this industry without being fully trained which includes using the demo you haven’t got a chance.
IME demo engaged almost none of the feelings or attention that live trading does for me. I just can’t get it out of my head that it’s fake and that something is going to be, at least, slightly different than live when I do a good trade. It always felt like playing a video game, where I want to win, but if I don’t, I really don’t care, because in the end it’s just a game and the outcome doesn’t make any difference in my life. (I know people who throw things/yell at their TV/computer when they lose a video game, but that’s not me.)
IMO, demoing past the point of knowing the platform and developing a repeatable edge that wins more times than it loses, is useless. Demo accounts work differently than live, so the only real test of an edge is live. I feel demoing past a few weeks (if you’ve developed some sort of tehcnique and edge) is an exercise in futility and a waste of time.
Add the fact that you can open micro accounts for laughable small amounts and trade fractional lots at laughably small sizes. You can make or lose as many pips live on a live micro account as you can on a live standard account. So, you can win or lose live and experience actual trading with real money, but in the minor leagues where it’s not so financially painful or rewarding.
IMO, trading on a micro account is a much better learning experience for a new trader than demo.
I don’t think the high percentage of failures is because of not being, “fully trained,” before trading live. No such thing as being, “fully trained,” before going live. Part of the training of consistently positive traders is experience from trading live.
I think the high percentage of failures is because a lot of people start trading live, (regardless of how many books or how much training they’ve had), and lose some money and quit.
You’ll read over and over, not only in this forum and many others and just about any book on trading, that a lot of traders kill their first few accounts and just keep trying and learning and do it all over again until they are consistently postive.
Now, I don’t think that traders have to tank their first few accounts as part of experience.
But, I think the usual reaction of most people after losing an account is just to give up on trading and say, “it’s not for them, trading is too hard, it’s a scam,” instead of taking it as a learning experience.
Most people give up on accomplishing things when they aren’t spectacularly successful on their first try. It’s just general human nature.
To some people, it maybe that way. To many others, usually they take one loss, goes on revenge-trading and loss the rest of their money—or even put more soon-to-be lost money—prior to quitting.
Agree.
One other thing that most people forget about forex trading is the importance of putting a very tight leash on their own emotion. They think because they have a system that quite a lot (although this is relative) have vouched for its track record, or some money (usually over $10,000) to spend, they can tame forex market as savvy as a lion-tamer you see in the circus. That until they take their first loss.
Since many people think they start trading to beat Bill Gate’s riches by next week, if not by tomorrow, it is very painful for them to see their account shrinking instead of growing. And most of the time, it takes only a single loss to make them loose control and killing themselves out by trying to take it back—plus bonuses—in the next single trade.
You can start by a demo, with objection to learn to execute your system flawlessly. Or you can start with as little money as you can spend in a live account, to dip your toe in loosing real money experience. Whichever you choose, although I tend to agree with ThePhoenix to take live from the start, just don’t start by dumping in everything you got.
The bigger your starting fund is, the easier for you to feel that you still have some money to trade however you like. In other words: without self-control. And that stretch the already wide open chance to almost absolutely loosing money in trading.
you dont get to fly an F-16 without a lot of time in a simulator, the 747 pilot HAS to fly simulator a number of times a year, brain surgeons work on their demo’s (cadavers and models) for a long time before being allowed even IN the OR and dentists work on their models for years before being allowed to WATCH a procedure.
each may be different, as phoenix points out but my own feelings are that as one is learning, one is picking up new ideas like a sponge — to try them live is kinda senseless and until you find what “fits” you well, you should continue on the simulator, improving and improving your reaction times (if you scalp) and your “prophesizing” skills if you swing or position trade.
you simply cannot have TOO MUCH practice, but you certainly can have TOO LITTLE !!
while psychologically the demo doesnt approach reality, ONLY reality can do that for you, but if you havent the rest of the skillsets, psychology wont do a tning for you
I’m not so sure about ‘ThePheonix’ suggestion of “trading on a micro account is a much better learning experience for a new trader than demo”
With such a small account your stop losses are going to be so tight your chances of blowing your account will be very high and your confidence very low.
Not only is trading a practice account before going live a good idea, but also continuing once you are live. I think one of the best things I’ve read here (sorry, I really don’t remember exactly where) was how one of the most dangerous things to a trader is boredom. Many times there will be no entry signals for your system so you end up not trading and feeling kind of left out. Many times (I know I’m guilty) people talk themselves into placing a trade only for that reason and more often than not it goes bad. When you feel “itchy” to trade, you can always trade the demo account.
My other advice is to trade a demo account that matches what your live account will be. All the ads I see for $10,000 and $50,000 practice accounts are a joke to me. I can be a lot more successful practicing on $10,000 and having a draw-down of $2500 than trading on $100 and losing $25. Sure, the percentages are the same, but the psychology is very different. The first account I blew was only $100 and was disappointing but easy to get past. If I’d traded the same percentages and ended up losing $10,000 I would’ve been devastated. IBFX lets you open endless practice accounts at whatever amount you’d like. I’ve blown through many of them testing different systems and it has helped me a lot.
this makes pheonix happy and probably works fine for him, but i would rather be bored and competent BEFORE i take off in the 747.
well, getting way ahead of “newb” status, the majority of losses come not from BAD trades but from stop losses being hit, IMO — so the wider the stop, the better it seems for trading. Im sure a number of peeps can comment on that, since i have never used and will never use a stop loss.
and it doesnt matter what size account you have as per the size of your stop — i think youre getting some other rules mixed in there.
IDR, your feelings towards beginners has been noted (I refer to Vicky) and you are right I didnt do my maths.
My concept of a micro account was that of $200 and having to limit each trade to a 2% risk margin would mean a stop loss of no more than $4.
Add that to the problems micro account holders appear to have with FXCM (refer to thread 'FXCM problem?) with no telephone calling facilities and no ‘No desk Dealing’ has resulted in me having serious misgivings about micro accounts.
In no way was I undermining ‘ThePheonix’ recommendation. I was just voicing my concerns.
Interesting question, I’m new with forex and also here on babypips. Unlike the most traders I decide only to play with demo for a few hours.
So early January I opened a micro account with 500$. I made a lot of mistakes that shouldn’t be like sometimes I thought I was selling, while i was buying… Most of the time i tried to get revenge after losing a trade.
In a 2 weeks my account balance grown to 1.600$, You can call it good luck, in fact it can not be anything. I made a withdrawal of my originally deposited money (500$), and now my balance has fallen back to 100$
So after 2 months trading I’m still 100$ in profit, and I guess I learned more than I could have with a demo. Anyway, now I am trying to make my system using everything I learned so far. And by making trades of 1K I will not easily be over-leveraged.
I just think that it is better to trade with very small amounts, so you take it more serious than trading with a demo… Or would’t you try harder to land a 747 successfully when it is in real live?
The reasons that i asked this questions is that i had been demoing for a few months. I found that demo
Besides trying out and familiar with the software
Trying out your strategy and deem whether it is a profitable one.
It also helps to found out what your problem
The drawn down of the strategy
The reasons that stop me from going live is that and lucky that i self confess myself and not try to hide the facts is
I do tried to get into any entry late after i missed my price and it went my way after the requote.
After losing two trades, i do revenge one more trade.(however, getting less)
From what most of the forumers respond. i think demo is important to certain people. It is good to demo to know what the at least basic tools to go live.
I tend to lean towards Phoenix point of view. Using demo trading is good to learn how to trade live but until you actually deal with the emotions involved with using real money you will not know if you can trade your system and stick to it.
Using demo to test a system or additions to your system is a good idea so you can use it with a moving market (as opposed to backtesting) without risking money. But once you are convinced that it works I don’t see much point in further demo trading.
Just unsure that you that you don’t go crazy and throw all your available trading cash in and max out to start. As already said here start with a small amount of money then as you become more confident and consistent add some more.
Being as your question can’t really be answered in black and white you will need to make up your own mind as to what you are comfortable. If you do go live (with a small amount) there is nothing stoping you going back to demo or continuing to demo as well.
Are you writing out a trade journal? I write down every trade. The most important part of the journal is to be honest and write why you got in and why you think you lost or won. I found with my journal that my worst losses were always because of stupid emotions controlling my trades. Things like letting losers run because I didn’t want to lose and convinced myself it would come back. A well done journal can really help pin point your faults. Most concentrate on trying to do the right thing, but often if you just eliminate the bad things you are doing you can improve vastly.
The question is what brokers offer micro demo accounts. I agree that it makes no sense to have 10k demo accounts when we will open a 50 bucks micro and trade 1 cent per pip.
Also, someone with experience should never convince a newbie to put a lot of money from the beginning.
i do write a journal and keep my chart. The worst part is writing the
information when the trade goes against you. You just dont feel like writing
when it goes against you.
However, when i won. You tends to see more writing… lol…Actually, should be the other way. More writing on why my trade is wrong.
Do you still keep the chart and record if several of your trades are all similar and is quite accordingly to rules when you enter. I assume you do all analysis that you trades.