I’ve been trading a demo account with MG Financial, and as a reasonably educated person, am mystified with the success (blind luck, really) I’ve had with my demo account over the course of a week. 9 of my 10 trades have been profitable, and my demo balance has gone from $5,000 to $8,237. I have no real defined strategy, other than just eyeballing the charts. I’m trading only major pairs, mostly the EUR/USD, nothing exotic. I’m also doing my trades manually, no automation.
I’m not bragging - in fact, I feel like something is obviously rigged. Now, I understand trading with real assets changes one’s risk tolerance, and also live trades can impact the market (although given the enormity of the forex markets, I don’t really see how).
Still, it truly can’t be this easy.
So my question to the forum is, is it technically possible for a demo to somehow exaggerate your profits? Can a broker engineer a demo in a way that makes it ‘easier’ to be successful versus what you would get in a live account?
Any feedback would be appreciated. I’d really live to explore the forex market, but I’m really cynical right now. I would have felt much better if my demo account had actually lost money or stayed flat versus earning such a tidy sum over a 7 day period with no real strategy in place.
Joe, there are new traders out there double their accounts in one day when they’re on demo and lose all their monies when they go live within a few hours. Can brokers help you with doing well on demo? Maybe. Since there’s no slippage, no requote, lightning quick execution of the trades. Like you mentioned, there’s no emotion when trading demo. All of the aforementioned and no money management increase your profit tremendously. At the same time, without a good money management, could wipe out your account in seconds.
Maybe you’ve found THE holy grail for yourself. Keep doing what you’ve been doing for the next 4-6 months and if you keep consistently racking up pips like you’re doing now, then you should definitely go live! You’ve got the Midas touch. Some of the best traders out there are just like you. They do not use indicators. They keep things extremely simple. They only eyeball the charts. Support/resistance and trend lines do wonders.
If you are looking at charts 15m or more, chances are it would be the exact same thing as live. The reason I am guessing that you are so successful is because you aren’t using stops (correct me if I’m wrong). Sure you can let the market swing back your way, but the real question is what happens if it keeps going south?
Read the thread that got started today from somebody who lost a bunch of money in 24hours. I suspect he didn’t use stops…
Yes I would say running on pure luck so far if not using a system, once real money is being used and emotions kick in the “game” is over.
Being an “educated” person you will realise that money management is definitely necessary in the markets, this means to manage your risk against the gains or you will be caught out at some point.
Unfortunately your success so far has probably taught you some bad trading habits towards your long term success/failures