In the casual world of free demo accounts - many young traders find they are able to garner impressive profits without a significant amount of effort. It almost seems too good to be true. But transferring this success from a demo account to a real account is far less common. Why is this?
Because most robots that perform well on demo use scalping and fast moves to make profits and it’s difficult to catch these moves on live : slippage.
Psychologically harder to let the profits run and cut losses short. Most common issue is closing in the profits too early and/or moving SL too close instead of letting the trade develop. Taking profits too early negatively affects risk:reward ratio.
Trading Feared.
“Cortex”, part of our brain which control our rational though, that’s where the problem is. They took a good step on DEMO, but they make too large step on LIVE. This is the main sources where trading feared came. By doing small incremental, it is more likely to success because our brain won’t detect discernible change of the behavior.
Demo performance is better than live account performance because most of the traders don’t take demo account seriously and they trade with different trading condition on both account.
Trading in demo account without emotion pressure and usually startup capital in the demo account is bigger than if we invest on a real account, and generally, start with huge capital will giving power margin to withstand price movement, and although like as only throw order randomly demo account will free from emotion and different when trading in real account that really involve emotion
Main reason of better demo account performance as per what I have seen is your psychology. Your mental state of mind undergoes a significant change as soon as you realise your real money is at stake. People start panicking, get nervous or most of the times overconfident. Basically they can’t manage their emotions properly. They get used to the “fake-money” of demo trading. That is why it is said to trade seriously on demo accounts just as you would on a live account.
1 Like
There was so fear of losing money: it’s big deal.
Demo account trading performance is much better than live trading because there is no threat of losing actual money in it. The pressure is bare minimum. The things in which there is no pressure, you tend to trade freely. The game changes when there is pressure upon you.
A strategy on a demo account may work fine but will crash and burn on a real money account.
Because the fear of losing your precious money kicks in. You can safely trade with much less worry on demo but live acc? Hell no!
You also sometimes notice that the demo trading is too easy than the live trading because in demo trading you work without the fear of losing your money. This will helps you to control your emotions and do some good trading. But in live trading one wrong move makes you to suffer from a loss.
very well said, in demo account there is no fear of losing money, that’s why people trade freely and often get good results. but as per me there is no benefit of such good results if they don’t appear in the real account. that’s why it is necessary to trade demo account with the same psychology which we use in live account.
1 Like
It is logical to be better than live because the execution is instant and always at the requested price as the orders are not actually transferred to the real market. After all, demos are for testing and learning purposes and of course traders are a lot braver than usual. Here, the psychological factor cannot be disregarded at all.
Very often newbies do not take the Demo account seriously and it helps them to make right decisions because they have cold minds. I can say that the largest majority of mistakes are made by traders when they start to get nervous, when they understand that they can lose their money or or vice versa have the opportunity to earn good money. I think this is the main reason 
There are several reasons:
- Often Demo accounts have a better server connectio that live accounts.
- People trading on demo accounts aren’t nearly as anxious and afraid to trade as they are on live accounts, so their decision-making is better.
- Newbies sometimes sometimes have this thing people call “beginner’s luck”, which I don’t really believe in. I think that they simply learn a simple strategy or two and then stick to it because they don’t know anything else, and as a consequences they trade well. They have no other information to clutter their mind and create doubts and anxieties.
Because, in demo there is no way to lose real money!
2 Likes
- Trading virtual money removes the psychological element from trading.
- A forex demo account gives novices a risk-free start to trading in the forex market.
- Strategies can be put to the test without assuming any risk.
Demo account trading is better than live performance because there is no pressure in demo account trading of losing actual money. You can trade easily and learn about the various aspects of forex. You need to give demo account trading a chance and you will see the results.