Is demo important

Beginner Questions
22

a question

when you lose, WHAT are the greatest reasons (most number ?)

mp

23

I don’t record the chart. I record why I entered the trade. Why I won or lost and if I followed my rules or if I did an emotional trade. When I win I make note if I followed my rules as well. I also record how a felt about a winning or losing trade, when in the trade and when it was done. The euphoria of a string of winning trades can be more dangerous than wanting to revenge trade.

Some winning trade are not good trades, but just dumb luck, if I wasn’t followling my rules. Not following your rules, even if you win, messes up the validity of any sample sizes while you record the ratio on an edge.

So, not following your rules and winning, can lead you into trouble as you aren’t exerciseing a developed system, but still trading haphazarly, which will eventually lead to loss.

This is not to say you shouldn’t use your mind and act on what you see, but it entry and exit should be based on repeatable edges, not random hunches or eagerness to get into a trade.

24

When I started out trading (stock & options) I was learning from a gentleman who would donate to charity any winnigs made by trades that were just as you say dumb luck and out side his system.

In saying that he is in a much better financial situation than most.:slight_smile:

But putting in place a penalty/reward is a metod that he taugh to overcome trading outside your system. Could be if you go outside your system you have to demo again for a period. Of course you have to make sure you are honest with yourself cause no one else is going to make you do it.

Cheers

25

hi mp,

Most of it is the missed entry. When i saw my setup is there and had infact make pips. I tried to curve fit myself to enter again at a discounted price.
Most of it did not make it.

If i enter on my first entry. I would had at least secure some pips and then followed by breakeven.

This is also because i am not fully focused on the demo. I was doing other things and then on/off looking for the setup. Wondering if for a real account. Wonder i be doing that.

Hmmmmm

regards
vincent

26

the “hmmmmm” is well worth thinking about — granted, you can ignore a demo for a bit, and honestly thats just fine because if youve got real money on the line, you probably wouldnt be as “loose” about it.

BUT, even though playing hookey or skipping a class is ok, understand that the demo is your bridge to whatever forex future you intend to live.

no more or less important than courses taken at school, its your laboratory for your ideas and methods and you must earn a good final grade before you even consider “real” trading.

heck, i even play hookey on some trading days cause it does tend to get boring, even with real money, but you come back with a clear head and go at it again and again and again.

after all, you got a better (read legal !) way of becomeing a trillionaire this week ?

enjoy and trade well

mp

27

In addition to the known Psicological differences between live and demo, are there any other important differences we should know about?

I am reading in different threads that brokers manage order times different in live, and that they take more time than in demo. Also, that sometimes the complete platform can go down, before you try to close a position. And If you try to call them in that moment, they don’t answer right away. Is all this true?? Has anyone experienced those problems in live??

28

since its a rare newb that runs right off and starts scalping, invariably they start on the longer timeframes and work their way down to the lower, if thats the way they want to go.

when trading the longer timeframes, split second fills have NO importance, because whats a pip or two when youre entering for a run of 50 or 100 and since youre setting a tp point for the future, manual exits without slippage are not really a problem either !

for scalpers, the preferred platform is the ECN because of its flexibility, but for the “normal” newb, this is not a consideration.

is it done — yes, but if one chooses a reputable “broker” (check this site) these things are rarely a problem — some of the smaller and newer “brokers” can and probably “do” resort to some of those tricks.

29

I think that with real money on the line things would be a bit different.

30

Trading a demo account is not the same as trading a live account so why bother trading one? I would suggest opening a $500 account with a broker that allows nano lots like ibfx or better yet, one that amounts in cents to the amount you will be trading after the learning curve has been fully turned.
Eg. If you are going to trade a $25000 account, deposit $250. Loosing $500 should be looked at as education cost and this should definitely help with the emotions as they pertain to trading. Good luck and happy trading!

31

i like the “get to know how to trade first” ability that the demo gives you ---- when one goes live, another set of problems comes up, psychological mainly.

back when i used to do this kinda thing, i took one student and had him trade repeatedly on the demo till he was able to hit 10 out of 10 — when he was turned loose with real money, his mental “set” was such that there was simply NO difference between demo and real ---- he WAS a trader and the money made NO difference.

BUT, that only works when someone is forcing you to do it — on your own, men tend to want to get right in there and DO IT (VERY similar to NOT reading the instructions — its a testosterone thing !)

GIVING AWAY money, because you DONT know how to trade is a given, NOT getting a winning trade when you first go live is a reasonable given also — THERE IS NO REASON you have to enter trading with BOTH those monkeys on your back !

maybe its the way you have to do things, but its a tad reckless and will DEFINITELY cost money that might well be on its way to tremendous profits, had the demo been a tad more respected !

BUT i cant stop the 95% who will wash out — right now im dealing with what i believe are the 5% that remain and go on !

enjoy

mp

32

I did almost got into live when i tested a strategy that gives me about 40%
return for the first week. I double up in the third week.

Is it very good? i personally think that is fabulous. Everything seems
so destined that i thought this is a close to holy system. confirmed open live next month. Luckily the last week shows alot of negative trade.

I further trade it and it just doesnt seem right. Everything just doesnt work.
Is it me or the system. Its probably the system as i followed the rules which is really simple.

What i trying to say is that make sure you fully exploit the system to have
a good idea of what the winning percentage would be. I know even if the system is tested for a good 3-6 months. It may still doesnt guarantee forever.
But it at least let you know what the system is capable of.

33

MP has summed up what I have always believed.
That you dont go ‘live’ until trading becomes second nature to you, and how long that will take will vary from individual to individual.

I had a target of eight winning trades out of ten, but if ten out of ten is possible so be it.

34

This is the precise reason why a live account should be traded rather than a demo account because it prepares the trader for one of the most important things in trading which is the psychological barrier faced by all traders. Demo account gives one a blind sense of over confidence. When this happens one of two things may occur 1)logic and precise execution is implemented at all times because all emotions are under control/focused or 2)the ego takes over where emotions will play a very vital role, and newbs who trade on the demo accounts tend to be in the latter category. Now, while some people might have the ability from the get go to overcome this, the majority don’t.

Happy trading!

35

the truth in the matter is that EACH one of your cases is true, plus a LOT more problems floating around.

standard learning procedures in most civilizations is to first SHOW and DEMONSTRATE, then allow you to go off and do it YOURSELF — if in school, its called LABORATORY time.

Slowly the “newb” is introduced to reality over a period of time, allowing adjustment to the new environment. In THIS world, this is the normal LEARNING method, no matter how anxious to “get in there” the newb may be — the elders simply hold BACK the newb until PERFORMANCE under fire can be established.

this would be the average scenario for someone entering the institutional business of trading — start with training, advance to small situations and if PROVEN, go on to larger situations.

UNFORTUNATELY, there is NO such thing for retail traders, and so their OWN egos, testosterone levels and anxieties propel them forward at the speed THEY desire, more often than not at the expense of really knowing what theyre doing.

Now, not “knowing” retail trading does not have the same impact on humanity as does an inexperienced doctor doing brain surgery, but it DOES result in that 95% wash out rate.

much behind the 95% rate is simply “unsuitability” and a large dollup of “day dreaming” on the part of the starry eyed newb, and NOTHING can be done about that situation.

there is full agreement, that without PROPER training (which does not exist in retail forex learning) people will have different needs and desires — some of these people will find that running into the surf without knowing how to swim results in getting wet, BUT they learn how to swim by neccesity, but many will also DROWN, unfortunately !

others will learn well how to swim, but panic when they hit the surf and end up in the same situation.

It becomes a problem that has NO real solution, given that there is no FORMAL training situation, and given that, people will be people — some will read the instructions and their child will NOT die when the bicycle falls apart and others will NOT read the instructions, leave out the most important nut and bolt, and watch their child sail merrily off the cliff !

theres NO solution to our roundy round discussion at the present time unless margin requirements are raised (to keep out the really starry eyed) or you are FORCED to attend formalized instruction (and that wont happen either)

SO — for your type of person you are correct, and for my kind of people I am right, and down the road a piece there are prob a FEW more solutions, and THEYRE ALL OK for those who work that way !

problem being though, there are still 95% who wont be around in a month or so, and i think your method gets rid of them faster than mine !

enjoy and trade well

mp

36

trading demo for a few months is not a bad idea but one might want to switch and go live especially with a broker offering 1/10th of a micro-lot… which basically means that 1pip = 1 penny as you go along on your journey you can increase your trading size to match your risk appetite. Never think of profits before accepting the risk you are taking.

37

I think to practice demo for 1 year then to open live a/c. If you practice more year then you will be more expert in trading forex. If you just learn about 3 month , then I think is not enough practice for you to open live a/c. While on demo a/c. where you learn to use all the indicator and other forex matter. Everything you learn forex during the demo . You never lost your money during demo a/c. While on demo , you will decide , how much money that you have to open live a/c . One day then you will open live a/c with that sum investment. How much then deposit you will put ? $1000 , $10, 000 or $100,000. All depend on the individual. . Let say you just have $1000 and you want to invest this amout when you go for live. So , what you decide to do now in demo ? Do you want to open 100k demo a/c then you practice . Later with the $1000 that you have , you want to invest to open the 100k live a/c. Do you know that you risk 100% on the single trade. So what you need to do know , You can select good demo broker that give you to practice to trade with any lot size . example you can select Oanda Demo , whereby you can imaigine that with the $1000 that you want to invest in the future , You will now demo that amout with Oanda . With Oanda you can select leverage and you can also trade with different lot size.
If you have $100,000 , then you can select broker that provide 100:1 leverage while on the demo, so when you open live a/c , you can select the same leverage with the amout you want to invest $100,000. Yes you can also open live a/c with $1000 , with leverage 100 times. Do you know that you are in very high risk. You can just lost all your invest in just one trade. The above is just one example that i provide. You have much to learn while on demo. While on demo , you learn everything about forex and when you making really winning trade , then now you are ready to open live a/c. For your info ,I,m demo 1 year , before open live a/c.

38

It’s defiantly important to learn and to go for the demo trading with demo account in Forex market because it makes you familiar with the market and its strategies as well as it will get you familiar with the trading software.

1 Like
39

Mistake we does whn dealing with demo is thinking demo is a time waste. I will answer this with a question, how many newbies in trading tht can blow their account if thy can do well in their strategy and risk management? Market in real and demo behaves same way especially good brokers demos. I think if we can do well in demo nobody one day will say forex is scam.

40

I have two groups here guys group A does demo for a year and perfect their entry exits and risk management and group B only does demo for one month between these two groups which group tht will have more successful traders? And why?

41

Yes, Demo trading is important before entering live trade because through demo trading one can understand how the forex market works and get familiarized with the broker’s software platforms.