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When do you know you ready to go from demo to real trading?

  • Post #1
  • Quote
  • First Post: Mar 5, 2007 6:34pm Mar 5, 2007 6:34pm
Lately I have been wondering what do you have to achieve in the demo to get ready for real trading. I have been learning the demo for 6 months now. With various effects in the beggining - and in my opinion good ones now.
I know that there is still a very long road ahead of me.

And heres the question - How did you know that the right moment for real trading has come ? What results did you have in the demo, and what happened when real money got involved.

And the general question "When do you know youre ready for the real thing ?"
Quoting ShowMeZieMoney
Lately I have been wondering what do you have to achieve in the demo to get ready for real trading. I have been learning the demo for 6 months now. With various effects in the beggining - and in my opinion good ones now.
I know that there is still a very long road ahead of me.

And heres the question - How did you know that the right moment for real trading has come ? What results did you have in the demo, and what happened when real money got involved.

And the general question "When do you know youre ready for the real thing ?"
If you have been in demo for six months it's already long past the time for the real thing. Fund a very small real money account and retire the demo today.
Quoting ShowMeZieMoney
Lately I have been wondering what do you have to achieve in the demo to get ready for real trading. I have been learning the demo for 6 months now. With various effects in the beggining - and in my opinion good ones now.
I know that there is still a very long road ahead of me.

And heres the question - How did you know that the right moment for real trading has come ? What results did you have in the demo, and what happened when real money got involved.

And the general question "When do you know youre ready for the real thing ?"
Start trading real money when you have a consistantly profitable trading strategy that has proven it's results in back testing and live testing.
Demo trading is useful to learn to operate the platform. It will not show you how well you will do in the real market. I did very well with the demo (500 - 1000 pips/week). Using the same system the real market ate me up. I did about 5 months on demo. It then took another 3 of real trading to start turning a profit. Get a real account where you can trade penny or dime pips and hone your skills for a few months or longer before trading any sizable amounts of money. Don't get overconfident and start swinging around big numbers too soon or you'll be broke. Take it from the voice of experience. I started slowly and successfully. Decided I had it knocked, and then it knocked me down. Told myself that if I lost half the account, I would quit and go back to demo or penny lots. When I did lose half, I just tried harder to get it all back at once. When I had about 10% left, I stopped and got smart. Read Mark Douglas "Trading in the Zone" and Lewis Evans "Left Brain Trading". Figured out my problems and started over. After two months of trading dime pips, I'm back to having about 20% of my original account. Would staying in demo longer have helped? No, because the demo (0% risk) would not have exposed my internal problems with trading. Only the real world can do that, and only when those are conquered (not when you have the world's best set of indicators (mine are pretty much gone, and the ones that are left don't determine my trades)), will you be able to successfully trade in the live market. So just jump in and find out where you stand. Just be sure you can afford to lose the money.
Demo Accounts should not be used to Learn How to Trade.
Demo Accounts should be used to Learn How to to Use the Platform.

Once you know how the Platform works {how to place the various types of Orders quickly without having to think "How do I do that again?} it is time to fund a live account with a portion of your available Trading funds and trade the smallest lot size available to you.

Only this way will you be able to train yourself how to deal with losing positions and no less important, how to deal with winning positions.
  • Post #6
  • Quote
  • Edited 8:36pm Mar 5, 2007 8:18pm | Edited 8:36pm
You have received excellent advice from four respected members and your about to receive more. Heed what they say since they have been in your shoes.

Your question has been posted here a few times in the past and here are the links.

http://www.forexfactory.com/showthread.php?t=10682

http://www.forexfactory.com/showthread.php?t=11420

My advice is to go to the Forex Beginner Q & A of this forum and look at the threads. Excellent questions have been asked and answered. Soak up as much as you can in the Forex Beginner Q & A.

My single advice is to TAKE IT SLOWWWWW.

I wish you luck and may the pips be with you.
1. Read Trading in the Zone by Mark Douglas.
2. Fund your account.
3. Risk no more than 2% of your account per trade.
Mr. Trend
i think i've spent like 2 weeks on a demo before deciding to go live. Cause i feel it's like wasting my time. I just cannot bring my mindset that I'm trading real 50k or 100k money. But once you trade on a live account..it feels juuusst riiight
Working towards CME membership
simple. When you start believing in yourself, and your system. That can only be achieved, when you prove to yourself that your system is profitable. Forward test your system on a demo, for atleast 3 months.... And always keep in mind, RISK MANAGEMENT.
Just jump to real account now, trading demo will never give you confidence going to real acct. Losses is normal in real acct, just take what lessons should be learned on why you lost. Demo's are for testing your own trading systems only.
  • Post #11
  • Quote
  • Edited 9:46pm Mar 5, 2007 9:02pm | Edited 9:46pm
Quoting fxpinoy
Just jump to real account now, trading demo will never give you confidence going to real acct. Losses is normal in real acct, just take what lessons should be learned on why you lost. Demo's are for testing your own trading systems only.
Fxpinoy, don't you agree that one needs to learn the demo since it gives one the working knowledge when it comes to knowing how to make trades and get the feel of the trading system. A beginner should know what each function of the brokers trading system is before moving onto live trading. A totally different aspect of trading ones system.

Practice with demo until you can make trades without making costly mistakes. You need confidence in both the trading system and the program your trading.

Good Luck!

StockKJay's statement below is well said!
I would like to respecfully disagree with traders that said to just use demo to learn the platform: No. This is just my honest opinion... not argument. Demo new strategies and systems. Dont do that on a live account.

I would suggest opening a broker that allows micro lots or .10c a pip. Trade at this level until you are ready to move up. Don't rush anything. Once you make say... 500 pips using .10c, move up to .20c. This way you get the real life experience and your account will grow slowly to substantiate the added risk. The more important part of this scenario is that if you lose 250 pips at .20c/pip... move back down to .10c and start over. Do not start at $1/pip or anything like that. Especially if you have a sub $1000 account. 1000 pips does seem like much to lose, however, one bad trade last week could have gotten it done for you.

If you have a system you like, trade is slow and allow yourself to make $20 - $50 / week. Don't worry about the rest, you will be trading $5/pip in no time.

Good luck.
The market is my nation. Traders, my family. Hello, brothers and sisters!
Quoting StockKJay
I would like to respecfully disagree with traders that said to just use demo to learn the platform: No. This is just my honest opinion... not argument. Demo new strategies and systems. Dont do that on a live account.

I would suggest opening a broker that allows micro lots or .10c a pip. Trade at this level until you are ready to move up. Don't rush anything. Once you make say... 500 pips using .10c, move up to .20c. This way you get the real life experience and your account will grow slowly to substantiate the added risk. The more important part of this scenario is that if you lose 250 pips at .20c/pip... move back down to .10c and start over. Do not start at $1/pip or anything like that. Especially if you have a sub $1000 account. 1000 pips does seem like much to lose, however, one bad trade last week could have gotten it done for you.

If you have a system you like, trade is slow and allow yourself to make $20 - $50 / week. Don't worry about the rest, you will be trading $5/pip in no time.

Good luck.
True enough, but this step comes after he figures out how bad his execution and psychology are with real money. Learn and master the platform on demo. Learn and master yourself on a tiny real account. Return to demo to learn and master your system. It's an evolutionary process...
In my opinion if you can't trade a demo account seriously and consistently profit from your trading than it is a waste of time to trade real money. Trading micro and mini accounts under capitalized do nothing more for trading psychology than blindly trading a demo account.

You can have free lessons and you can have expensive lessons. I prefer the latter.
if you win 0.2% and feel it is enough, you are ready
if you trust your stop and limit & can go with your live, you are ready
do some basic math, and you are ready
don't get bored
Demo until you truly understand your trading system. Trade a tiny real account once you understand the trading system and how to trade. Start with USD 10-20. Yes, there's a high possibility that you may burn those money, but hey, if you are not willing to spend small money for "tuition", you are not serious about becoming a trader. Nothing can be accomplished if we are not serious.

In fact, it takes ages to burn USD 10 dollar in the market if you follow simple money management.
Like everyone says, open a small micro-account with Oanda. However, don't put too much in it.

Let's say you have $1,000 you can afford to lose. At first only put in $100. Lose the $100. Put in another $100. Lose that. Put in the next $100 and lose that. Hopefully by the time you get to 6th or 7th reload, you'll have learned some important lessons and you'll begin to see improvements. Remember that all progress is incremental, ie you're not going to turn from a losing trader into a winning trader in a week. Just losing at a slower rate signals some improvement.

Once you start winning don't get greedy. Let's say you have $400 in hand and $100 in your account. You slowly begin building it up. Once you've doubled it to $200, add another $100. But only do this if you've made a minimum of 30 trades with that particular $100. The reasoning is anyone can get lucky with a trade or two, but 30+ trades show some consistency in your trading.

Once you have $300 in the account, run it up to $450, making another 30+ trades. Once you achieve this goal, put in the rest of your money.

How you break up the allocation is up to you, but I hope you get the idea. Set goals that are realistic and show you that you're truly making progress. Once a goal is reached, set another one. You need some way to measure yourself and this is a good way. Be careful not to give yourself a time goal though because you'll be adding unnecessary pressure. Just focus on not losing your money and slowly building it up. This takes a long time, much longer than most anticipate, but the time goes by quickly...and I'm talking years, not months.

Good luck.
All beginners should read this thread. thanks.
Taking Life One Pip At A Time I officially have my own opinion.
I dont agree with those who say to open a mini-live account right off. In my opinion, demo accounts are very useful (if taken seriously) to gain confidence and understanding of your system. For example, let's say you trade range breakouts - well, I reckon it's very wise to demo-trade them for a healthy while until you are able to spot them correctly in the chart, to experiment with different price targets, etc.

Once that confidence and understanding has come to you, then jump onto a mini-account, not before. Why would anyone risk real money before the basic pieces of the puzzle have fallen in place?
Quoting ShowMeZieMoney
I have been learning the demo for 6 months now.
please.

fund your account with real money. it will help you with your trading "psychology" if you use ".10 USD" a pip. it really will. i promise.

oh and by the way, if you been demo'ing for 3 month that's ok too. 1 year? sure.

when you fund your account, your trading platform will make you feel gravity, and turn 3-D. you will feel the wind in your hair and it'll give you surround sound.

ok. maybe not. once a shitty platform. always a shitty platform.

but wait! there's more:

blowing your account once is a prerequisite to becoming a true trader. blow your account twice and you will be an expert. join the ranks. everyone's doing it. why not you?
BAM BAM BOOM! -bravado
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