Whats the big fuss with demo vs real?!
I really dont understand the whole point of people saying that Demo accounts are useless.
No they arent!
The whole notion that you should go ahead and put money in a real account (even a micro account) and then lose it sounds pretty counter productive. Yes you can learn from experience, but it will be a very limited experience. You will hardly be able to place any trades without being stopped out many times. Then you've lost so much money that you have no choice but to either put in more money or switch to demo.
Then calling it "tuition money" for learning to trade makes no sense either. So you have $500 in a mini account and you blow it all in 20 trades. Then what? 20 trades in nothing at all. On top of that, you pay the price of a damanged psyche.
Consider this analogy: your kid wants to learn how to drive a car. Would you sit with them in the car (maybe with Dual control perhaps?) and teach them or would you let them take the car out for a spin in the hopes that once they wreck it a few times they will learn how to drive?
Assuming you take it seriously, a demo account is useful because:
1) You can devise and test strategies on it.
2) Find out the kind of trader you are...swing, day or long term etc
3) Find out what works for you.
4) Iron out any stupid mistakes you make. Come on, we've all been there...pressing sell instead of buy?? Sound familiar?
5) Learn how it feels to win money even on a demo. How many here have honestly played a demo account, made money on it and then not been careful enough to preserve it? <--- Doesnt this sound like the beginnings of money management?
6) If you cant make money on a demo, then how are you supposed to make money on a real account?
I think the whole idea that demo's are useless has been derived from a few idiots how start up a demo and then randomly buy/sell every currency in sight and somehow manage to make a lot of money on the demo. Who cares about that? You're cheating no one but yourself of a valuable learning tool.
Please dont turn this thread in to a bashing hot spot between the newbies in pros. We can all learn here.
I am not personally saying the demo accounts are useless. It's just a slightly distorted image of what trading with real money is
If I loose $20,000 fake in a $50,000 fake account I sleep well and take the next trade.
If I loose $1.00 real in a $250.00 real account, I barely sleep and think twice to take the next trade.
If I profit $20,000 fake in a $50,000 fake account I go "big deal, it's fake"
If I profit $1.00 real in $ 250.00 real account I go "ohh.. now we're talking..."
I'm a $250 microlot account believer, for learning purposes...
100% agree. You're much better off taking a micro account. One of the biggest obstacles in fx trading is getting your mind right - and with demo, that's just not there. You can make a million on demo - then lose the same in a live account in half the time.
The only reason I would use demo is to familiarise myself with the platform. To test a system? - No way.
well i can only say in my beginners perspective. that demo account can be really real(to woke up 4am just to look what is happening and back to bed.). and yes my plans is to open macro account during the summer. but i have learned a mile during demo blastin!. and correcting lot of common mistakes.
and i can defenedly see it when it comes eaven in 0.07 euros pip in real cash. will make lot more meantal impact. but to get the beginning basics at least and no to be in totaly front of rulet table. then it gives some sense to go and and loose your realmoney. atleast then you "think" and realise what you are doing.
had to edit one more point there.
dont know what is exacly people perspective when they do demo.
for me. Money managment what sound silly when there is no real money. but i only trade 1-2 slot in time max 4 diffrent currensy pairs and never have STOP LOSS more than 3-5% of my account size.
take it as real you can and brain start to beleave it so. but i can see soo easaly people just wanking the demo account without care a less. and yes. then it will not gain nothing
Demo accounts arent totally useless, they have their place when you are learning the basics of forex. But once you start getting the hang of things, and really understanding the market, trading with fake money is absolutely nothing like trading real money, whether it be a nickel of your own money or 10k. Psychologically it makes a huge difference. I thought the same thing as you when i first demoed, whats the big deal? I'll just trade as if it were real money. But you just cant do that. Even if you trade with 50 bucks in your account, at a point, thats much better than trading demo, after of course you know what you are doing. Simple example, when you are demoing and have a drawdown of 30-40% of your account. You'll just let it run, no big deal. When you have your real account of 50 dollars, and you're losing 20 bucks of it, you think twice about closing, about what your next move is, about why you made this mistake. There's a fairly big difference between demo trading and live trading. But again, demo trading is not useless.
A $250 micro account isnt going to do much good if you are too scared to even place your next trade. The whole point is to learn, not to be scared of trading.
Doing that with a demo is a piece of cake. Doing that with microlots is really messy and scary. And I know I'm not ready to go mini after this experience.
My point it: microlots, even $0.10 a pip take you to real world, psycologically and emotionally, while once you blow the crap out of a demo, all you have to do is open a new account. No pressure.
You can trade like a robot all you want on a demo account, but once you flip over to a live account and you see your money going down, or you get too excited and risk too much and lose, that's where you get hurt.
A demo account can never prepare you for the real thing (in most cases at least). And the widening spreads and other things that might happen in a live account can throw you off balance too.
Unless you're totally new to forex, the best thing to do is to set aside a few hundred bucks and trade a micro account after a few months.
This is just my opinion at least.
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