Difference between Demo and Live

My opinion is trading in real account is always better than trading in demo account because you can feel your real emotion, greed, timidity, hesitation...
But it is the smartest to start demo trading until you know what forex is and what risk you are facing. No point to pour your money in and start trading real right away because no matter how small your position is, a newbie will burn his account sooner or later. Demo till you know what you are doing. If you want to take it further after you are familiar with forex, then real trade with the minimum amount of money you are willing to risk.

Yep, everytime people tell my to better open micro than demo.

I agree that demo must be used to trial a platform or test a system.
But its about LIVE account management that new traders need to learn to manage. They must first manage their emotions. There are more systems than there are ways to manage emotions.

Heres a traders blog who talks alot about this sort of stuff. https://www.tradersreality.com/

Check it out

Happy Trading

I think demo account is good for beginners to learn about market movement, the point is not on the profit but on the knowledge of doing so.
It will be useful too if you are backtesting your strategy if you are an advance trader. So maybe you are in the middle so you find it useless.

But anyway it is always to ask opinion =D

never use demo account unless you only test functions or test programmed code. if you trade longterm or mid term its different, then you can use demo too, but even then the disadvantages are to big.

if you use demo against small cent account (or small real account) you lose so many advantages. its one of the biggest mistakes someone can do by beginning.
you lose time, hold often in stupid strategies that never work in real accounts, you dont know slippage or real spreads movements or offquotes, you dont see real money and no need to control you with lotsize (or you will have money lost),..... its a countless list.

and this is not always a beginner mistake, even advanced trader fall often in this problem, tested something in demo and failed in real account later, because loved months a stupid trading idea in demo what was unable to have profits in reality.

Yes , I also prefer micro account than demo , because after passing sometimes you an lost interest from this trading place . I have never used in demo account when I was a newbie in forex . I was continue in Babypips and practice in a micro account.

Demo accounts are perfect for beginners to learn the various functions of the platform, examine and study charts, and most importantly, develop strategies.

However, you'll see time and time again traders say they did really well with a demo account, then really poor with a real one. There are 3 reasons why...

1) Psychology. Losing real money has a profound effect on decision making. No matter how closely you try to imagine your demo account is real money, you know that losing has no real consequences. And so, traders find it easier to stick to a plan that has short term losses (as all strategies do from time to time). Seeing your real money ebb away tick by tick is altogether different, and recognising the impact that has on your decisions and ability to stick to a strategy is crucial. You'll only discover this by trading real money.

2) slippage. Although you do get slippage on demo accounts, in my experience it's nowhere near what happens in real life. With demo, generally favourable slippage occurs just as often as unfavourable. That rarely is the case with real money (where unfavourable slippage is much more likely) and this can have a make-or-break effect on certain strategies.

3) execution/liquidity. i developed a strategy that in theory would work fine even at volatile times, such as the nfp etc. With demo trading, all was well. Live trading, well, let's just say that reality bites!

The problem is that brokers cannot accurately simulate the effects of an illiquid market, because by its nature it's unpredictable. In demo, they'll assume that your order will be filled. In reality, they **might** be able to fill your order at the requested price, they may not.

The point is, you have to trade real money to see the actual effects.

So, demo trading is great for getting familiar with the basics, learning how to use a particular platforms features, developing and testing strategies and so on.

But, once you've reached a point that you're ready to go live, use a micro lot account so you can see how your strategy works in the real market without risking large sums. (Micro lots of 0.01 will usually risk only a few $ per trade, but it depends on your strategy)

Take careful note of things like slippage, and high volatility days like nfp, interest rate decisions, and other high-impact news, and adjust your strategy accordingly.

You may, for example, find that the whole thing breaks down on those days, and so decide not to trade then at all.

no matter how much you practice on a demo account, you can never experience some things that you will experience on a live account.

the most noteworthy of them all, in my opinion, is the psychological effect of having to risk your real money in a trade. until that point when you hold your first real position on your live account, you can never experience the fear or anxiety of having some money on the line. also there are other factors like greed or patience. you might close your real positions way earlier than where you would have closed them on a real account, due to the "one bird in hand is better than two on a buch" mentality or fear of price reversing against you.

also you might end up being greedy for more profit and turn already winning trades into losing trades.


so yeah, psychology of trading is a big factor which you can only experience on a live account. so give that aspect of it a small learning curve too if you are still learning on a demo account

So many traders emphasis on demo trading for all time but I think the importance of demo account is not too much. you can make profit with consistency by using your trading strategies in demo , but when you move in live account you could not get maximal result as like demo that you have earned. It’s a psychological matter.