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Hi guys :) Trading demo account

  • #1
  • First Post: Jan 5, 2008 10:03am Jan 5, 2008 10:03am
Hi every1, its great to join a site such as this. I would like to ask at what point, to switch from a demo account to a live account?
So far i have traded forex for 4 weeks and feel like i started putting all the pieces together, only this last week..I managed this week to place 47 trades of which 40 were successfull. I want to start trading soon and plan to open a account with £2000..but i dont know if im ready yet?

Also as stupid as this question may seem i need to ask. Is a demo account the same as real but its just that u dont pay the price of a bad trade? or is it a simulation of a trace the broker uses to entice beginners to start trading and what is live is different?

thx guys
  • #2
  • Jan 5, 2008 10:51am Jan 5, 2008 10:51am
Quoting nAVIN2007
Hi every1, its great to join a site such as this. I would like to ask at what point, to switch from a demo account to a live account?
So far i have traded forex for 4 weeks and feel like i started putting all the pieces together, only this last week..I managed this week to place 47 trades of which 40 were successfull. I want to start trading soon and plan to open a account with £2000..but i dont know if im ready yet?
Also as stupid as this question may seem i need to ask. Is a demo account the same as real but its just that u dont pay the price of a bad trade? or is it a simulation of a trace the broker uses to entice beginners to start trading and what is live is different?

thx guys
it seems your still not ready, as they say "when in doubt stay out", either keep demoing or start with a very small account just to get a feel for live trading IMO.

regards
2.minutes
  • #3
  • Jan 5, 2008 11:00am Jan 5, 2008 11:00am
Quoting nAVIN2007
Hi every1, its great to join a site such as this. I would like to ask at what point, to switch from a demo account to a live account?
So far i have traded forex for 4 weeks and feel like i started putting all the pieces together, only this last week..I managed this week to place 47 trades of which 40 were successfull. I want to start trading soon and plan to open a account with £2000..but i dont know if im ready yet?

Also as stupid as this question may seem i need to ask. Is a demo account the same as real but its just that u dont pay the price of a bad trade? or is it a simulation of a trace the broker uses to entice beginners to start trading and what is live is different?

thx guys
Hi

If you placed 47 trades this week I'm guessing you are using a short time frame strategy. If this is the case you may experience more slippage when entering the market on a live account instead of your demo.

Yes, demo is not using real money. It's provided to you in order for you to get used to their platform but you can use it to paper trade your strategy. Only you know if you're ready. Are you Ok with losing the entire 2k? It is a very realistic possibility but if you can afford it then it's your choice. If you open a micro account you can take the next step from demo and risk smaller amounts which is good idea IMHO to start with.

Good luck with whatever you decide to do.

cheers

FXP
  • #4
  • Jan 5, 2008 11:28am Jan 5, 2008 11:28am
1) trade on larger time frames, right now your just trading the "noise"
2) if you feel you got the hang of how things work then go to oanda and open a live account where you can trade 1$ (very low risk) because no matter how good you are in a demo you will not encounter the emotions involved in trading real money (yes you will get emotional even with 1$)
and even if you lose your first account consider it an education and move on to the next one. (education costs money) Persistance breeds sucsess.
Just Trade It
  • #5
  • Jan 5, 2008 11:48am Jan 5, 2008 11:48am
Quoting nAVIN2007
Hi every1, its great to join a site such as this. I would like to ask at what point, to switch from a demo account to a live account?
So far i have traded forex for 4 weeks and feel like i started putting all the pieces together, only this last week..I managed this week to place 47 trades of which 40 were successfull. I want to start trading soon and plan to open a account with £2000..but i dont know if im ready yet?

Also as stupid as this question may seem i need to ask. Is a demo account the same as real but its just that u dont pay the price of a bad trade? or is it a simulation of a trace the broker uses to entice beginners to start trading and what is live is different?

thx guys
You need more time to judge your methods. This past week wasn't typical market movement. It's okay to open a live account, but it's imperative to keep it very, very small as BWR stated.
Not to sound negative, but good results such as yours after only a short time are usually followed up by blowing an account, or at least taking a beating. Your good results will give you the impression that this is easier than it really is. We've all been through it. Start very, very small. If you can't grow a tiny account, you can't grow a larger one.
By starting small, I mean use a broker that allows micro lots or even smaller. Don't try to trade a mini-account with $250; You won't be able to use proper MM that way, as already stated by BWR.
Keep posting and let us know how you're doing.

Bill
  • #6
  • Jan 5, 2008 12:05pm Jan 5, 2008 12:05pm
yeah i agree......I went on a trading course for stock market over 2 days, didnt know what the hell was going on!!! as it was to quick to grasp information but somehow it lead to me being interested in forex. I use all the time frames to do analysis. I use daily chart to see trend direction and see the big picture, 1hr chart for indicators but have found the 15 minute time frame fantastic for entry positions. I make sure all support/resistant lines are in place and even use pivot points. the demo is like a real account....lol I dont wanna lose a single penny.

All in all its going great but i have found that when i go for huge number of pips i fail (excess of 25) when i go for 10-15 pips i see success.
I must also say i have paid for a course which alowed me to put the peices together, I understand how impt it is to follow rules.
Im gonna take these great advises and perhaps trade on large time frames and when this seems to lead to successfull trades i will start a live account hopefully.
  • #7
  • Jan 5, 2008 12:33pm Jan 5, 2008 12:33pm
Quoting nAVIN2007
...at what point, to switch from a demo account to a live account?
It's hard to say because you provide too little info about your experience with trading so far.
Are those 4 weeks the only trading weeks of your life (including other instruments like stocks, futures...)? What knowledge you have about money management? How well defined is your strategy (is it discretionary? mechanical? Is it rigorous or based on gut feelings? And so on...).
Lacking these information it's impossible to give a reliable answer.

Anyway, to be really honest, and I hope useful to you, what more concerns me about your case is your success rate. You say you made 47 trades of which 40 were successful. Well, contrary to what inexperienced traders can believe, this is generally very dangerous. I mean, unless a trader has experienced a long series of consecutive losses (10 or more, even if only whit back testing or in demo) he cannot consider himself ready for live trading.

Now, be totally honest and ask yourself this: "What would I do if I get 10 consecutive losses?"
If you answer with a proven, precise, well defined and already tested (on past data) strategy, you are ready for live trading. If you answer that this will never happen to you, or (worse!) that you will increase you position size and will recover as soon as possible, I think you are not ready, at all!

I remember the first trading month of my life I increased my capital by 21%. Two years later I was just ready to blow out my second account. And they were both HUGE accounts!

On the other side, the sooner you start trading live, the sooner you will progress in your learning. Demos are good to test strategies, plans, MM, but to master the real thing you need to get wet!
.Ubeee.
  • #8
  • Jan 5, 2008 1:43pm Jan 5, 2008 1:43pm
yeah i agree....thats my problem i am facing right now ...I havent really used money management rules as of yet and when i face a loss i find myself increasing the stake, to try an cover my loss, which isnt right.
I always believe when i go live, these mistakes will iron themselves out. I guess thats my next step and i need to employ this. All in all i have only traded demo account for 4 weeks.
I started with virtual trader $10,000 account and over 3 week it went down to 8,4000$. I made losses because of learning and then i thought i was more confidentafter finishing the course. I then switched to metatrader because it seems a better platform, this week and over thurs, fri i got results actually i think i have been reading the statement wrong.. the number of trades being 43 and 7 losses dont add up.....lol

what i got is:
short positions (75%)
long positions 91.3%
loss trades 16.28%
profit trades 83.72%
consecutive wins 6 (average)
consecutive losses 1 (average)
total net profit 940.75
gross loss 307.50
I didnt use money management rules at all and i guess this is where i need to start b4 live account. the loss is to big in relation to %
  • #9
  • Jan 5, 2008 2:50pm Jan 5, 2008 2:50pm
Quoting nAVIN2007
I always believe when i go live, these mistakes will iron themselves out.
I used to think the same. BIG ERROR!
When you go live every small mistake you occasionally make on demo you will do A LOT MORE OFTEN AND BIGGER in live trading.
This is why I also say that until you start live trading you cannot really learn (or understand those kind of things, how different it is from demo).
The problem is if you go live now you will almost surely blow out your account. It seems to me you have too few planning in your trading.
Before going live why don't you try to do some manual back testing for a week or two on past charts and try to better formalize your trading strategy (including money management)? It surely cannot hurt!
.Ubeee.
  • #10
  • Jan 5, 2008 3:55pm Jan 5, 2008 3:55pm
for sure bro ....thats great advise.
  • #11
  • Jan 5, 2008 4:16pm Jan 5, 2008 4:16pm
Quoting nAVIN2007
Hi every1, its great to join a site such as this. I would like to ask at what point, to switch from a demo account to a live account?
So far i have traded forex for 4 weeks and feel like i started putting all the pieces together, only this last week..I managed this week to place 47 trades of which 40 were successfull. I want to start trading soon and plan to open a account with £2000..but i dont know if im ready yet?

Also as stupid as this question may seem i need to ask. Is a demo account the same as real but its just that u dont pay the price of a bad trade? or is it a simulation of a trace the broker uses to entice beginners to start trading and what is live is different?

thx guys
Hi,
iam trading for about 4 years ago -real trading-..
According to what i remember before 4 years i have open a demo account for 2 weeks, and it was profitable 2 weeks... then i decide to open huge account but first year was not profitable :s .. but on the same time its profitable on my demo account.. there is something related to emotions in real accounts, and you will never learn it if you didnt open a real account, so go ahead and open a small one that you can handle...
good luck
  • #12
  • Jan 6, 2008 6:57am Jan 6, 2008 6:57am
thx man for the good luck ..i will surely try and it make complete sense. The psychology of trading with a real account definitely going to give butterflies and this can effect the thinking process. I guess it all come down to how u handle pressure at the end of the day ....and this can only be seen on a real account.

So many people i know say " It just isnt the same and almost any trader beginner makes money on demos"..which is why i asked the question how do u know to take the plunge...i guess the answer is when yur comfortable with yur knowledge which is reflected in consistant wins and have regard for money management rules followed with discipline. I hope other beginners like myself can take note of this thread and gain from it .
  • #13
  • Jan 6, 2008 8:10am Jan 6, 2008 8:10am
Quoting nAVIN2007
...i guess the answer is when yur comfortable with yur knowledge which is reflected in consistant wins and have regard for money management rules followed with discipline.

Yes Navin, that's it. Every experienced trader says this, and this is true.
But to be more concrete how do you get there?
For me there is only one way and it's to have a proven system in which you are extremely confident and to have developed it before going live. Also don't focus on wins, wins are easy to handle in live accounts. When developing your strategy focus a lot on losses, on what you have to do when you lose, on how and when you would eventually stop your strategy and decide it's time to develop another one. Focus a lot on how often you change strategy. All of this can be done on manual back testing. If during these testings you find yourself changing your strategy too often then you are not ready to go live.
.Ubeee.
  • #14
  • Jan 6, 2008 8:55am Jan 6, 2008 8:55am
thanks for tips ......i will start them in motion this week
  • #15
  • Jan 7, 2008 11:07am Jan 7, 2008 11:07am
today is a different story i lost 900$ on cable...it seems today i cant even find the direction of the trend...trading today is hectic
  • #16
  • Jan 7, 2008 12:29pm Jan 7, 2008 12:29pm
Quoting nAVIN2007
today is a different story i lost 900$ on cable...it seems today i cant even find the direction of the trend...trading today is hectic
This type of honesty will help accelerate your learning curve. For, now, I'd be studying MM and applying it to demo--every trade. Make your MM a matter of habit before you open a live account.
I don't know what trading books you've read, but I'd put Trading in the Zone by Mark Douglas, and Trade Your Way to Financial Freedom by Van Tharp on your required reading list. Very good stuff. They're considered staples to most.
BTW, trading cable can be a rollercoaster. Scroll back through your hourly charts and see how many 80+ pip candles you'll find--for no apparent reason. Something to consider when planning your stoploss and position size. And plan them in that order. Stoploss first--position size second.

All the best
Bill
  • #17
  • Last Post: Jan 7, 2008 2:57pm Jan 7, 2008 2:57pm
thx bill ...I will buddy
Im only glad it happened on a demo and i learnt a lot from it to..I need to stick to rules like glue....only just its easier said than done
today i didnt look at the chart to carefully...i normally use virtual trader and have switched to metatrader. I find analysis of chart to be so much clearer with virtual trader its just a pity that the pivot indicators arent so hot.
I just didnt analyse the charts properly and wasnt able to enter at the right places an b4 i knew what was happening i was 75 pips down, the rest of the day just was about narrowing down the loss....I didnt even think about mm. there was no structure to the day just random actions ....I need to be mechanical.
I will find those books for sure .....thx man
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