This Week's Question: Based On Your Own Experience, How Different Was Live Trading From Demo Trading?

Live trading differs from demo trading by the presence of fear for your own money. If you start trading on a demo account without thinking about losses, then such trading will not bring a positive result. You need to trade only strictly following money management, even on a demo account. The broker’s conditions are also important

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I agree with you and operate the same way.

For Context: In my prior work, I was responsible for negotiating the best money terms for business contracts involving immense sums of money that did not belong to me. My edge in that job was that I always treated my employer’s money as if it was my own.

I bring that same mindset to my paper trading. I treat my paper trades as if real money is at stake. I don’t treat them any different. As such, whenever I place a paper trade I feel lots of pressure and anxiety, as if it was real money; these emotions must of course be managed.

I dare say that if a trader isn’t treating their paper trading accounts in the same way they’re treating their live accounts, they are not doing it right.


So, I’m not the one and only. I was starting to feel quite of a strange trader! You are for sure more experienced than I am, so I thank you a lot cause you made me feel more “normal”.

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Very true! What works in demo often doesn’t work the same way in real trading.

I used to believe live trading gives you many of the psychological challenges in trading that you are unaware of.
I had blown a few funded accounts as well as live accounts. Yes when I started trading I did all the mistakes that a rookie will do in spite of taking a courses and consistently insisting on the following statements, I did those mistakes due to impulsiveness.

  • Revenge trading
  • Moving the stoploss
  • Entering without proper plan
  • Entering against my plan even when my trade setup have not formed
  • Too lazy to journal
  • Too lazy to back test

But my personal opinion is you could have done all that in a demo account without losing a single penny.
When you have a properly back tested plan, that you want to test live it is always better to do it in a demo.
Because back testing and live testing (even if it is in a demo ) makes a huge difference in the execution part based on the following reasons.
While executing you know your psychological state
- How difficult it is to execute in a 1 min chart vs 5 min chart vs 15 min chart vs 1 hr chart

  • Your stress level to hold the trades less than 1 day, more than 1 day, around a week and ore than 1 week, etc.
  • What happens to your patience level when your setup is not being formed for 2 days or 3 days or 1 week.

It is important to study all these factors and find your comfort zone where you can execute flawlessly.
Then you can hypothesize various trading models and backtest them and practice executing them consistently in demo first and then live.
It can save you many dollars