What's the difference between Demo and Live accounts?

Is it accuracy, up-to-date information, what is it?

All brokers offer demo accounts for us beginners to get used to trading with Forex but everybody out there warn people of switching from demo to live as it’s not the same. So why is there a demo account if it doesn’t have the same qualities as a live account?

And what’s the difference between them?

EDIT: I’m sorry. I was in the wrong section when I posted this. It should be in Newbie Island. Mods are free to move it. Thanks.

For the most part demo’s are exactly the same as live accounts. I do however believe many demo’s have much better execution speed. Besides that a demo accounts and live accounts are almost identical.

The massive problem when switching is a mental one. When trading real money two emotions come into play, fear and greed. These emotions are why people can fail miserably moving from a demo account to a live account.

Trying to treat a demo account like a live account is the same difference as playing a game of paint ball and going on a real live-fire spec ops mission. You just wouldn’t react the same way to paint balls that you would react to real bullets. That sense of fear does not emerge when you know its fake.

It’s the same with demo accounts, those irksome emotions that mess with a traders head are much milder on demo’s.

So it’s basically a psychological issue. I though demo accounts don’t have as much features as live accounts. Thanks for clearing that up.

I agree it almost the same thing I have been reading, one big difference is the leverage you get in your real account compared to the one you get to choose on the demo. The best thing is to always apply the same conditions as you would in your real account.

The [U]fear matter[/U] can be expecially pronounced.

In a [U]demo trade[/U], you do not really care if the trade is going very negative.
You are not going to suffer, so you let the trade run.

With [U]real money,[/U] you are very concerned if the trade is going very negative.
You [U]are [/U]going to suffer, so there is a probability that you would like to interfere in the trade to rescue it.
The rescue causes you to terminate the trade and lose money.

[U]The answer[/U] is to start out with very small amounts when trading live for the first time.
If you lose then, it will not worry you too much.

Slowly, as you gain confidence, can you increase your lots.

Hey tyman you mean to actually practice with your money, I understand your point of view but that sounds a little risky. I read you say to trade a little but is that possible?

I believe what Tymen is saying is that when somebody is ready to open a live account they should open it with a small amount of money. So as that they can become accustomed to trading real money.

To answer your other question, you can open a Forex account with as little as $1.

I really don�t know, I don�t want to risk my money because I want to gain money to early, I think everybody once feel the confidence to go out to the real market, but they can be wrong, everyone has to learn more about it, maybe you can have not luck and something big important happens and all your small knowledge can�t work your you in those moments.

The emotions.

If you demo your system of choice until you know how it works
for you, you know the % of wins to losses, then luck does not
enter the equation.

You can then enter the live market with a small account size to
understand the psychology of losing(winning) with your own money,
then grow your account size from there.

The problem with most newbies is they haven’t enough patience
to follow through with a systematic plan. They are chasing the big bucks,
“lottery chasers” as I like to call them, & can’t see the “wood for the

I think you should only demo for one reason. And that’s when you’re completely new to forex and you’re learning the basics.

The rest I think should be done with real money. You can literally trade with pennies. And there’s a big difference between demo’in $100k account and a real account with $20 in it.

When you stand to lose $20, you’re a bit more serious about staying ahead. Just imagine how serious you’d get if you had to pay to get a demo account.

Thank you for your replies. I’m still reading the School lessons and I’ll be demo-ing in no time. Thanks!

Yes it�s very true what you are saying, it doesn�t matter if the amount is minimum as long as its real money you will pay more attention than if it were any practice account. So practice with real money but I don�t think you can open an account so small.

What do you mean practice with real money, is that crazy or what how come some of us are just starting here and that is the advice you are given them?

At Oanda you can open an account with $1 and trade with pennies.

I think you should only demo to understand how forex works. But once you get the basics down, I don’t think anyone would ever get serious unless some money is on the line.

It’s easy to play around with 100k account and blow it numerous times, but you’ll never feel the real fear or greed or playing around when you have money on the line. It’s those two emotions that completely change the game.

Yes, demo-ing is oversold and overvalued by a lot of traders
trying to give advice to newbies. Demo has very little value.
It really does. Now, some people demo demo demo in one
platform by one broker and then when they open their live
account they for some bizarre reason choose another broker
offering a totally different platform. This proves that they
are haphazard to start out with. Get organized and choose
smartly from the get go so that you don’t waste time.
And don’t demo for years either like some people do on here.
Complete waste of time. 1-3 months tops and then get going
with the chosen platform and the chosen broker. Ideally, you
need to decide on a broker before you decide to demo and know
which firm you will go with before even demo-ing. Plan ahead.
Unless you are taking this whole thing as a joke.

Hey jhonny fx that is some great advise, I was thinking one should practice for more time and lately I have been losing every time I open a trade. I have been using the William percent range and it is not helping or I am not reading it correct, so I need help , here is a picture of my trading.

Ok maybe you can open a forex account with as little as a dollar but when you begin trading since the amount is so small then your emotions are going to be the same as if you had a free account, so I really think that unless you trade some serious money then you will be a serious trader and not before.

Money is relative. Someone might not want to lose a dollar over and over. Others might not. So you cannot dictate to one what his emotions will based on the size of his account. We’re all different.

That said, I entirely disagree. I think even trading with a dollar is better than demo. You can blow 100k demo accounts left and right and not care, however, you don’t want to blow $1 accounts left and right. Even $1 repetitively loss will add up.

Lastly, define serious money. $10. $100. $1000. $1000000? Tell me, at what level one is a “serious” trader. And this isn’t rhetorical. I truly want you to come up with a figure. Then after you find that figure, go back and reread the first sentence of this post. Money is relative.

A serious trader is anyone who is serious about trading forex. For me that defines anyone who is willing to put in the time and the effort to actually learn how to trade and eventually trade successfully.