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Difference between demo and real trading

  • #1
  • First Post: Nov 25, 2009 5:01am Nov 25, 2009 5:01am
I'm very new to forex, been trading on a demo account from various brokers for 2 weeks. I'm very consistently making profit, so I'd like to start doing real trades. I've been practicing mostly with an Alpari demo account, and intend to register a real account there once ready. My trades go over a period of 10-15 minutes usually. The problem I'm having here is that it just doesn't make sense that you make such easy profit with so little experience, there has to be something I'm overlooking. The question I'd like to ask is: what is going to be difference between demo account and real trading ? The only thing I'm aware of is higher spreads during news (I don't think this reflects on demo accounts with Alpari). Any tips are welcome.
  • #2
  • Nov 25, 2009 5:30am Nov 25, 2009 5:30am
Nothing should be differend on the technical side(trading platform, price movement etc), BUT the REAL difference will be YOU!

Dont make the mistake to start trading large sums in the beginning. You should only deposit that amount of money, you are ready to wipe out. If (and it probably will) you lose your account, consider it as a learning fee
  • #3
  • Nov 25, 2009 6:15am Nov 25, 2009 6:15am
Quoting johto
Nothing should be differend on the technical side(trading platform, price movement etc), BUT the REAL difference will be YOU!
Actually, having spoken to Alpari they describe their demo account as a guide and their real account is different. I noticed this even running an ea on a real and demo account. This is not the same on every broker though. My GO account is exactly the same demo as real.

Having said that, if you can make money on demo you will make money on real providing you don't let the fact that it is real money get the better of you. Your best bet is to start with a small amount and build it with success. If it takes you a couple of months longer than you originally thought to make your millions I am sure you can live with it!

Max
Gravity goes both ways in forex...
  • #4
  • Nov 25, 2009 10:01am Nov 25, 2009 10:01am
Can't comment if execution is easier in Demo, but there is one other big difference between Demo and Live - Psychology.
  • #5
  • Nov 25, 2009 10:27am Nov 25, 2009 10:27am
Quoting TraderT
Can't comment if execution is easier in Demo, but there is one other big difference between Demo and Live - Psychology.
I second that.
  • #6
  • Nov 25, 2009 1:51pm Nov 25, 2009 1:51pm
And I 3rd that!!! LOL Pshychology is the largest determinign factor when going from demo to real. You must bea able to separate your emotions from your money.

I put a post up a while ago about going from Demo to Real. Maybe you will get a little something from it.

http://www.forexfactory.com/showthread.php?t=56737

Cheers,
Vick

Quoting Jhig
I second that.
Nothing is impossible, with a willing mind!
  • #7
  • Nov 25, 2009 2:25pm Nov 25, 2009 2:25pm
Alpari Demo vs Live: Demo allways has instant and smooth execution. Live is a bit slower especially for bigger lotsize and also during high volatility.

and... please, please dont overanalyze and complicate your strategy when going live. It's easy to do so when you're playing real money. You are NOT overlooking anything if you consistently make profit on a demo.
  • #8
  • Nov 25, 2009 4:17pm Nov 25, 2009 4:17pm
When nothing is on the line as is the case of a demo account, then you, and I can almost guarantee this, will begin trading differently once your own hard earned cash is on the line. Although you make not think so, I am sure almost every trader who has gone from demo to live can attest to this.

In addition, with ECNs you will likely experience slippage, liquidity issues (limits/stops not being executed) which do not factor into demos. Market Makers also will requote, among other things which could affect profitability...

Best,

Veng.
  • #9
  • Nov 26, 2009 4:20am Nov 26, 2009 4:20am
Quoting enterfx
Alpari Demo vs Live: Demo allways has instant and smooth execution. Live is a bit slower especially for bigger lotsize and also during high volatility.
This is rather interesting, would you have any idea how much time we're talking about if you're saying a bit slower ?
  • #10
  • Nov 26, 2009 6:02am Nov 26, 2009 6:02am
of course live is slower - goes through dealing desk above a couple of lots
  • #11
  • Nov 26, 2009 6:08am Nov 26, 2009 6:08am
Quoting drtsb
I'm very new to forex, been trading on a demo account from various brokers for 2 weeks.
2 weeks is most likely just luck. Trade for 3 profitable months in a row and if you can do that you maybe ready to open a very small live account to get a feel for the psychology.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #12
  • Nov 26, 2009 6:20am Nov 26, 2009 6:20am
Its not just the dealing desk with alpari that makes the difference. There are several pips difference between highs or lows between demo and real and that can be costly. That said if you can trade demo and win, you can trade live and win. You just have to believe it. Stick with your plan and start small.

max
Gravity goes both ways in forex...
  • #13
  • Edited 12:56pm Nov 26, 2009 12:54pm | Edited 12:56pm
Quoting drtsb
This is rather interesting, would you have any idea how much time we're talking about if you're saying a bit slower ?
Live can be near instant or a split second difference from demo. The main thing is that your orders actually has to be filled by real market, (which is simulated fills on a demo. The higher lotsize, the slower it tends to execute. (Remember, this could also go in your favour).

We're talking split seconds up to a few seconds occasionally. Also depends on their server responds and current market volume / accessabillity.

This goes for all retail brokers I guess, but all in all, my opinion is that Alpari UK is one of the best for small to mid sized accounts.
  • #14
  • Nov 26, 2009 1:12pm Nov 26, 2009 1:12pm
Just don't demo! I've never used demo just because it's too easy to not follow your personal trading rules. I trade with a mini account and have been so called trading live for little over 18 months and have just recently moved up to .10 per pip. I find that I don't like losing a .01 per pip anymore then I would losing $1.00 per pip. I"m sure it'll be another year or two before I even get to the point of trading $1 per pip.

So if your broker allows you to trade micro then do it and go for the .01 per pip. Just my opinion.

thx,
todd
  • #15
  • Nov 26, 2009 1:32pm Nov 26, 2009 1:32pm
Interesting isn't it, how his only response so far as been to how the platform works. The issue of psychology just doesn't register with people in the beginning. I think one factor is the typical belief that it doesn't happen to me, only to others, kind of like accidents.
  • #16
  • Nov 26, 2009 2:25pm Nov 26, 2009 2:25pm
The final word on demo trading...
http://www.forexfactory.com/showpost...0&postcount=82
  • #17
  • Nov 26, 2009 2:59pm Nov 26, 2009 2:59pm
HAHAHAHAHAH omg that is funny shit hahahah AWESOME
  • #18
  • Nov 27, 2009 2:16am Nov 27, 2009 2:16am
try trading on demo account at least 2 years, you will find no different

-------

trendline indicator
  • #19
  • Nov 27, 2009 10:16am Nov 27, 2009 10:16am
Quoting Dopey
Interesting isn't it, how his only response so far as been to how the platform works. The issue of psychology just doesn't register with people in the beginning. I think one factor is the typical belief that it doesn't happen to me, only to others, kind of like accidents.
It does interest me. But when posting the topic I actually considered stating: "apart from psychological factors, what's going to be different". In the end I didn't. The purpose of my thread is to decide to make a real account or not. Whether or not psychological factors will affect me in a negative way, does not affect my decision to start doing real trades: the only way to find out how psychology will affect me, is by finding out the hard way anyway. I'm looking for actual good reasons not to go into real trading yet, psychology is not one of them.
  • #20
  • Nov 27, 2009 9:33pm Nov 27, 2009 9:33pm
Quoting drtsb
It does interest me. But when posting the topic I actually considered stating: "apart from psychological factors, what's going to be different". In the end I didn't. The purpose of my thread is to decide to make a real account or not. Whether or not psychological factors will affect me in a negative way, does not affect my decision to start doing real trades: the only way to find out how psychology will affect me, is by finding out the hard way anyway. I'm looking for actual good reasons not to go into real trading yet, psychology is not one of...

Well put. If you have a strategy you kan follow by rules, and you're keen on going live, start small with an account you definitely can afford to blow, $100 or something... You will gain a lot more experience and play your strategy live. Nothing else beats that. Probably you will adjust a few things and make mistakes that you wouldnt notice on a demo. Experience is worth its weigth in gold.
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