Most traders do not make money in trading over the long-run for one simple reason: they trade way too much. One curious fact of trading is that most traders do very well on demo accounts, but then when they start trading real money they do horribly. The reason for this is that in demo trading there is virtually no emotion involved since your real money is not on the line. So, this goes to show that emotion is the number one destroyer of trading success. Traders who over-trade are operating purely on emotion.
Furthermore, another common mistake is not applying risk reward and money management correctly, since risk management is critical to achieving success in the markets. Risk management involves controlling your risk per trade to a level that is tolerable for you. Most traders ignore the fact that they could lose on any trade, if you know and accept that you could lose on any trade. Since, why would you ever risk more than you were comfortable with losing?
Agreed! However it is crucial to acknowledge the difference between trading demo and trading live, not only emotions are not involved but demo is a way to test the platform’s technicalities and test strategies to a certain limit, however the EXECUTION is not comparable.
Execution on a live account can involve requotes and delays, these are factors that were not taken into consideration when trading demo.
This also comes down to the broker and what trading conditions they provide their clients.
Well it depends… If you apply the same approach, same rules, same execution, same system/strategy in demo or real account. Every trader is different… Sure it won’t be the same as real account but if it practice enough especially in an account that you can grow slowly and in time, it should work.
If you want to know more, don’t ask me directly… Feel free to post it in Newbie Island
I agree, every trader is different in there approach whether it be in a demo or real account. In addition, trading also need discipline in order to avoid over-trading.
Its like playing poker for matchsticks… putting down $100 instead of a matchstick certainly grabs your attention and affects your behavior completely. With Forex I think its better just to see the figures as numbers and not money… if we can do that then we would all probably be better traders but easier said than done.
I agree, since money has a negative connotation attached to it. By seeing it in figure would really help traders to look at it in a different perspective…
In addition, using candlestick chart would greatly help newbies to determine it support and resistance. Thereby helping you to use trailing stops and other stop orders.
Starting of forex with low learning is a common mistake of traders. When they read about earning and make good profits in demo they think they will easily get their targets. They are not enough experienced to manage their risk . Their attempts to gain high profits become a loss.
trading should be controlled according to traders capability its not necessary to trade everyday if you think market is very volatile and its risky for trading then it should be avoided…
Hi Everyone. I am not sure everyone will understand this problem, but I trade the Asian session on the USD/JPY pair. I am a late afternoon USA/mountain standard time trader. I wonder if anyone has the following problem: normally, when I am watching the Asian market, the Yen strengthens by the nature of the market that time. When the Tokyo market closes, the dollar begin to strengthen. This does not happen all of the time, but there is some truth to the fact that pairs gain or lose according to the trading market they are in. Thus my question is, when a market changes in polarity, the typical practice of shorting or buying a currency becomes more complex. Recently, I have lost over $2,500 in my demo account once the market changed. I had gained $2,200 by anticipating the natural tendency of the market. (i.e the yen strengthens during the Tokyo session and the dollar strengthens during the New York session. I have made a lot of money with this theory. I also have produced a “Correction” theory whereby I buy a currency at the end of “Spike” knowing that the market will correct itself over time. This doesn’t always work, but it has provided some high yields. In any event, I was wondering if others think along these lines. I appreciate any feedback.
In my opinion we should have a good strategy and should follow our strategy if we do not follow it is a big mistake. Also we should have good knowledge about Forex.
the most important thing for me is psychological. I know a trader one of the banks…, good analys, but no mental. accompanied by an assistant to handle him, he only determine entry and exit levels, then he stayed away for a coffee. :18:
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