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Demo account versus live account.

  • #1
  • First Post: Nov 18, 2007 10:47am Nov 18, 2007 10:47am
I started trading live earlier this year and the results have been mixed.

Since then I have opened 2 demo accounts, one of which was accidentally closed having more than doubled in value in about 3 weeks. The second one is having more modest success but is careering ahead of my live account by a factor of about 300%.

On my live account I spend hours of analysis, set small lots with correct money management, get out of losing trades and monitor my trades every 10 - 15 minutes at least.

On my demo accounts I have only set 3 or 4 trades in the same number of weeks, large lots, with little or no regard to money management and only a little analysis. I then forget to check them for several days at a time.

I wonder if any other beginners have experienced this phenomenon?
Gone to a better place
  • #2
  • Nov 18, 2007 3:25pm Nov 18, 2007 3:25pm
Quoting smikester
I started trading live earlier this year and the results have been mixed.

Since then I have opened 2 demo accounts, one of which was accidentally closed having more than doubled in value in about 3 weeks. The second one is having more modest success but is careering ahead of my live account by a factor of about 300%.

On my live account I spend hours of analysis, set small lots with correct money management, get out of losing trades and monitor my trades every 10 - 15 minutes at least.

On my demo accounts I have only set 3 or 4 trades in the same number of weeks, large lots, with little or no regard to money management and only a little analysis. I then forget to check them for several days at a time.

I wonder if any other beginners have experienced this phenomenon?
It's simply luck. You will always have lucky accounts and unlucky accounts, especially when you are measuring in weeks, and not in months (Bare minimum of 3 to get any kind of realistic expectancy, even then you can still just be lucky)

Long term profitability and sustainability will only come from proper risk control.
To be one with the market, you must first be one with yourself.
  • #3
  • Nov 18, 2007 8:51pm Nov 18, 2007 8:51pm
Try not to compare live trading with demo trading. Your results will not be the same. You may do better with a live account or worse.

Use the search feature to read the many posts on live vs. demo trading. You will find very good posts on the subject.
  • #4
  • Nov 21, 2007 11:50am Nov 21, 2007 11:50am
Quoting Unforeseen
Long term profitability and sustainability will only come from proper risk control.


Well said. Sustainability is a new buzzward in our culture. It comes from people being tired of the short term glitz, huge success, only to ultimately crash and burn. Businesses, agriculture practices, and many others are now trying to position themselves for "sustainability". Trading should be no different.

Your statement captures this for trading.

Thanks..


Jimno
  • #5
  • Nov 21, 2007 12:29pm Nov 21, 2007 12:29pm
Quoting smikester
I started trading live earlier this year and the results have been mixed.

Since then I have opened 2 demo accounts, one of which was accidentally closed having more than doubled in value in about 3 weeks. The second one is having more modest success but is careering ahead of my live account by a factor of about 300%.

On my live account I spend hours of analysis, set small lots with correct money management, get out of losing trades and monitor my trades every 10 - 15 minutes at least.

On my demo accounts I have only set 3 or 4 trades in the same number of weeks, large lots, with little or no regard to money management and only a little analysis. I then forget to check them for several days at a time.

I wonder if any other beginners have experienced this phenomenon?
There may be an element of fear in trading a real money account that is absent in demo trading.
Some people may close a money trade just because it doesn't feel right.
Scared money can't win.
  • #6
  • Nov 21, 2007 5:48pm Nov 21, 2007 5:48pm
Quoting smikester
I started trading live earlier this year and the results have been mixed.

Since then I have opened 2 demo accounts, one of which was accidentally closed having more than doubled in value in about 3 weeks. The second one is having more modest success but is careering ahead of my live account by a factor of about 300%.

On my live account I spend hours of analysis, set small lots with correct money management, get out of losing trades and monitor my trades every 10 - 15 minutes at least.

On my demo accounts I have only set 3 or 4 trades in the same number of weeks, large lots, with little or no regard to money management and only a little analysis. I then forget to check them for several days at a time.

I wonder if any other beginners have experienced this phenomenon?


This is the knock that many have on demo accounts. Demo accounts, do be effective are there for you to mange EXACTLy the same way u would a normal account. If you don't, u learn absolutely nothing. Should have the approximate balances u intend to use as well so u get a reasonable feeling of how the $$ changes as the trades go on.

one makes money in your demo by luck and thinks it trading. They go live and trade A WHOLE DIFFERENT WAY....because it is now YOUR DOUGH. They wonder why they now lose...

Lesson: Trade a demo with the same patience and discipline u would real money and it will help you identify your mistakes, errors, tendencys, weaknesses, and the like. Trade it any other way and it is pointless.

Good trading...

Jimno
  • #7
  • Nov 21, 2007 6:19pm Nov 21, 2007 6:19pm
Quoting james275

Lesson: Trade a demo with the same patience and discipline u would real money and it will help you identify your mistakes, errors, tendencys, weaknesses, and the like. Trade it any other way and it is pointless.

Good trading...

Jimno
Extremely good advice, and is also much more difficult then most would imagine. I found doing this harder then trading my live account, however it was the best experience I went through in learning the ultimate trading tools: discipline and patience.
To be one with the market, you must first be one with yourself.
  • #8
  • Nov 22, 2007 1:25am Nov 22, 2007 1:25am
A lot of points have been made here and I would like to comment on each one. Forgive me if I miss any and feel free to criticise where you disagree.

1. Luck. As in life there is an element of luck. I always count myself lucky to have been born into relatively priveleged society but when I read about so called primitive cultures I sometimes wonder. But I have always believed that "you make your own luck". In the demo account I can see luck, for sure. It makes my live account seem unlucky!

2. Sustainability. Proper risk control will keep an account going for longer and hopefully more profitable. Yes - and I like the word integrity. I have gambled from time to time because I enjoyed it. The trick is to use "gambling money". It should be a toy. Like a demo account?

3. Fear. Always makes me think of the phrase "We have nothing to fear but fear itself" Who said that? Fear has a big impact on my trading. As I have not yet been able to come to terms with losing trades it has the effect of stunting my winners. Perhaps they should not be thought of as winners and losers. Maybe A and B. Accept there will be so many B's for so many A's

4. Trade a demo as if it were the real thing. With patience and discipline. I have tried that. It still isn't quite the same. Could it be to do with boredom? I have come to terms with waiting for the right trade to come along. I have backtested various systems with A4 pads full of pencil calculations and especially on 4 hour charts and above I know that sometimes days can go by before the right trade will come along.

5. I would like to add "detached". This is a bit philosophical but bear with me. In my opinion as in life it relates to trading. Emotion. I have to live with it but it can lead me when I least want it to. Most damaging from a trading point of view as it leads to confusion and impetuous behaviour. Self observation is easier said than done as it requires constant awareness but in my earlier years I read a book called "The Master Game" written by a follower of Gurdjieff, Robert S. DeRopp. I would recommend this to any trader, or human being, for that matter. Not the easy way and Gurdjieff's writings are particularly chewy.
Gone to a better place
  • #9
  • Nov 22, 2007 4:03am Nov 22, 2007 4:03am
If you have a mechanical trading system, then demo or live, it is the same.
  • #10
  • Nov 22, 2007 4:10am Nov 22, 2007 4:10am
Quoting vinnie99
If you have a mechanical trading system, then demo or live, it is the same.
No it's not. If the system starts to make a drawdown you will think about if the system doesn't work anymore or it's just another drawdown...

Regards - Xaron
  • #11
  • Nov 22, 2007 11:24am Nov 22, 2007 11:24am
[quote=smikester;1726027]

4. Trade a demo as if it were the real thing. With patience and discipline. I have tried that. It still isn't quite the same. Could it be to do with boredom?
quote]

U are right that it isn't "quite" the same. Boredom would be a part. With a demo, one thing that we LEARN is the importance and Absolute need for DISCIPLINE. If i can't properly manage a trade on a demo, there is no way i can do it with money on the line. Besides, when u go live u start learning a whole new set of items, especially in the realm of emotions, fear and greed.


Good trading..

Jimno
  • #12
  • Nov 22, 2007 12:20pm Nov 22, 2007 12:20pm
Checking your trades every 10 to 15 minutes takes its toll. It also means that you are not very confident or that you are worrying quite a bit that the market will turn against you. This tells me that your trades are probably based on lower timeframes. If they are, then you may want to try out higher timeframe trading. It is much easier in my opinion and there is much less stress.
I dream, therefore I become.
  • #13
  • Edited 3:51pm Nov 22, 2007 3:41pm | Edited 3:51pm
Quoting smikester
1. Luck. As in life there is an element of luck. I always count myself lucky to have been born into relatively priveleged society but when I read about so called primitive cultures I sometimes wonder. But I have always believed that "you make your own luck". In the demo account I can see luck, for sure. It makes my live account seem unlucky!
My opinion of luck is in my signature:
"The harder I work, the luckier I get" Samuel Goldwyn


Quote
2. Sustainability. Proper risk control will keep an account going for longer and hopefully more profitable. Yes - and I like the word integrity. I have gambled from time to time because I enjoyed it. The trick is to use "gambling money". It should be a toy. Like a demo account?
In the beginning keeping your trades small so that u will last long enough to learn how to trade. Gamblers pay for tearing down perfectly good hotels and building brand new hotels in Vegas; think about it.

Quote
3. Fear. Always makes me think of the phrase "We have nothing to fear but fear itself" Who said that? Fear has a big impact on my trading. As I have not yet been able to come to terms with losing trades it has the effect of stunting my winners. Perhaps they should not be thought of as winners and losers. Maybe A and B. Accept there will be so many B's for so many A's
“Only Thing We Have to Fear Is Fear Itself” Franklin D. Roosevelt. It is the fear of losing money that is affecting. Once you learn that it is not about the money, but the trade then you can get the fear behind you. Again, trade small enough to last long enough to learn these important lessons.


Quote
4. Trade a demo as if it were the real thing. With patience and discipline. I have tried that. It still isn't quite the same. Could it be to do with boredom? I have come to terms with waiting for the right trade to come along. I have backtested various systems with A4 pads full of pencil calculations and especially on 4 hour charts and above I know that sometimes days can go by before the right trade will come along.
With apologies to Edwin Lefevre: "Traders that trade for excitement are the kind that are gonna pay for my beach house and keep my wife in good humor"

Quote
5. I would like to add "detached". This is a bit philosophical but bear with me. In my opinion as in life it relates to trading. Emotion. I have to live with it but it can lead me when I least want it to. Most damaging from a trading point of view as it leads to confusion and impetuous behaviour. Self observation is easier said than done as it requires constant awareness but in my earlier years I read a book called "The Master Game" written by a follower of Gurdjieff, Robert S. DeRopp. I would recommend this to any trader, or human being, for that matter. Not the easy way and Gurdjieff's writings are particularly chewy.
It is not so much the observation that is tough, its the not lying to yourself about what you see that is so hard.
Good Trading to you.
In trading, there is no bullshit. You either make money or you don't.
  • #14
  • Nov 28, 2007 1:18pm Nov 28, 2007 1:18pm
Quoting mrgreen

It is not so much the observation that is tough, its the not lying to yourself about what you see that is so hard.
Good Trading to you.
And thank you for that last bit...
Gone to a better place
  • #15
  • Nov 23, 2008 10:06am Nov 23, 2008 10:06am
Hi Guys, Sorry to interrupt with irrelevant topic.
Does anyone know of a good demo trading platform that offers long term demo trading. I subscribe to a demo account but that only allows me to trade with a trial period of 2 to 3 weeks.
Please kindly advise as i would wish to try out the demo before going to the real account.

Thanks in advance.
  • #16
  • Nov 23, 2008 6:18pm Nov 23, 2008 6:18pm
Quoting FXconfused
Hi Guys, Sorry to interrupt with irrelevant topic.
Does anyone know of a good demo trading platform that offers long term demo trading. I subscribe to a demo account but that only allows me to trade with a trial period of 2 to 3 weeks.
Please kindly advise as i would wish to try out the demo before going to the real account.

Thanks in advance.
Oanda and Alpari
  • #17
  • Nov 24, 2008 4:44pm Nov 24, 2008 4:44pm
Fxconfused

tradeviewforex also allows you to use the MT4 for a longer period of time. actually that's the platform that i've been using for practicing until today.
  • #18
  • Nov 24, 2008 6:09pm Nov 24, 2008 6:09pm
Yeah, it gives you a 30 day trial, which is kinda cool, when that times expires you just open another account and that's it just keep on demo trading, is there any other broker that offers a longer time? I would really like to know.
  • #19
  • Nov 25, 2008 12:10am Nov 25, 2008 12:10am
A Demo account and a Live account are worlds apart in the emotions involved. Fear and greed hardly play a part in a Demo account. Of course that helps to make for a clear mind to formulate the right decisions.
  • #20
  • Last Post: Nov 25, 2008 4:56pm Nov 25, 2008 4:56pm
yes...there are differences between them, the thing is that when you go live you risk your own money fear and stress wont let you make the greatest moves in the market...which would be the best way to go according to that situation?
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