Demo vs Live | Forex Factory

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Demo vs Live

  • #1
  • First Post: Sep 15, 2010 11:02am Sep 15, 2010 11:02am
I have been in demo mode trading forex for a whole 2 weeks now and I really enjoy forex, I use to trade penny stocks so this is a nice change. I am doing well with the demo accounts and getting much of the wiggles out while developing a strategy. Going to be in demo mode a bit longer as I have had my days.

My big question is how much different is it from a demo to a live account, these are the brokers it's coming down to and I am opening the account with $500. I have no mixed ideals that I am the next hot trader that makes a million in a month, maybe two lol.

Paragonfx
TDFX
ATC
Oanda
  • #2
  • Sep 15, 2010 12:07pm Sep 15, 2010 12:07pm
IMHO the most influential factor in real trading is psychology.

You are dealing with real money. Your profit/loss is real money so this can enforce greed or fear which causes not being able to make the best decision at the right time.
  • #3
  • Sep 15, 2010 7:56pm Sep 15, 2010 7:56pm
  •  Czech
  • | Joined Feb 2010 | Status: You Don't Know What You Don't Know | 111 Posts
It really depends on how you trade. If you trade short-term when liquidity is limited then your orders will get slipped, live. If you trade higher time-frames for hundreds of pips then trading live will be about the same.
  • #4
  • Sep 15, 2010 8:21pm Sep 15, 2010 8:21pm
Quoting Czech
It really depends on how you trade. If you trade short-term when liquidity is limited then your orders will get slipped, live. If you trade higher time-frames for hundreds of pips then trading live will be about the same.
Sorry to jump in here, but how would a noob like me know when liquidity is limited? Are there some hours of the day or night that are better to trade than others?
  • #5
  • Sep 15, 2010 8:33pm Sep 15, 2010 8:33pm
Quoting klrman
Sorry to jump in here, but how would a noob like me know when liquidity is limited? Are there some hours of the day or night that are better to trade than others?
The only time when liquidity may be an issue, is around major news releases. A few minutes before and after the release, spreads may widen and your orders may get slipped. How bad this will affect you will depend on your particular strategy and the broker that you are using. I would recommend opening an account with Oanda. It is one of the more reputable brokers, that have been around for a very long time and are very well capitalized. Another advantage for going with them is the unique way in which you can choose your position size. Instead of lots, they have units. 1 unit represents just 1 of the base currency. So for instance 1 unit of EUR/USD, represents just 1 EUR. This makes them perfect for smaller accounts which will allow you to make the switch to live trading with minimum risk. You could start trading from as little as 10 units and then adjust from there based on your risk appetite and success. HTH
Stubbornly persistent
  • #6
  • Sep 15, 2010 8:35pm Sep 15, 2010 8:35pm
the difference between demo vs live
is like the difference between
porn vs real girlfriend
  • #7
  • Sep 16, 2010 10:41am Sep 16, 2010 10:41am
Thanks to all who provided answers here. I am still in demo with a few but it seems choosing a broker is much harder. I am a scalper by nature and there does not seem to be many brokers out there in forex that are efficient at letting one scalp. Then when I go live I will probably have to learn as I go to what effects live will have. I am very good at baseline emotions, I had to do that in the penny stock world. It seems it's one of those things you cannot know until your live
  • #8
  • Sep 17, 2010 1:26am Sep 17, 2010 1:26am
Quoting sergiu
The only time when liquidity may be an issue, is around major news releases. A few minutes before and after the release, spreads may widen and your orders may get slipped. How bad this will affect you will depend on your particular strategy and the broker that you are using. I would recommend opening an account with Oanda. It is one of the more reputable brokers, that have been around for a very long time and are very well capitalized. Another advantage for going with them is the unique way in which you can choose your position size. Instead of...

Thanks for that info! Have to watch for those news releases then if that is the case. I constantly hear that many are happy with Oanda, but I scratched them off my list for some reason when I was looking. I forgot, but I think it had something to do with forced margin calls at a certain level even though equity is still fine.
  • #9
  • Sep 17, 2010 11:44am Sep 17, 2010 11:44am
The major difference is psychological. If you can trade with small enough positions and only increase gradually as you progress, you will be fine.

Stay with demo for several months more than you really want to. You will allow yourself to get more exposure to various times of the year when the markets change and turn.

For example: the summer months are when a lot of european bankers step away from the market to take vacations etc. The markets tend to lose trend and range.

Good luck!
  • #10
  • Sep 17, 2010 11:54am Sep 17, 2010 11:54am
Would have never of known that, thank you. When I played pennies the summer was the most dangerous, as the bigs step away for vacation there too. Very interesting that forex has seasons. I am going to keep trading demo for sure as I have good times and then I can blow an account up fast. Trying to work out the wiggles now and make sure I bring the correct mindset to the live environment. I watch all my trades so closely I guess I micro manage a lot, it's just my personality lol. I know there is much to learn and been spending about 6 hours a day on forex besides my normal job. I see the potential but am working through the pitfalls, like I had no idea some of the games brokers play in the forex world. Or time of year when things go bad. So much to learn, I know some pairs work together and against each other. Reading charts and trends I like but I noticed there are certain times of day when things get crazy and the swings are bigs. I am logging them as fast as I can but I know it will take time.

Quoting calderone
The major difference is psychological. If you can trade with small enough positions and only increase gradually as you progress, you will be fine.

Stay with demo for several months more than you really want to. You will allow yourself to get more exposure to various times of the year when the markets change and turn.

For example: the summer months are when a lot of european bankers step away from the market to take vacations etc. The markets tend to lose trend and range.

Good luck!
  • #11
  • Sep 17, 2010 11:58am Sep 17, 2010 11:58am
Quoting EricF
Would have never of known that, thank you. When I played pennies the summer was the most dangerous, as the bigs step away for vacation there too. Very interesting that forex has seasons. I am going to keep trading demo for sure as I have good times and then I can blow an account up fast. Trying to work out the wiggles now and make sure I bring the correct mindset to the live environment. I watch all my trades so closely I guess I micro manage a lot, it's just my personality lol. I know there is much to learn and been spending about 6 hours a day...
Yes, in given time a lightbulb will come on for you and it will become second nature. I'm still learning things too, everyday it seems. Make sure you follow the FF calender. You might be interested in the silent service thread since you like stocks too. Clockwork is very wise regarding macro issues.
  • #12
  • Last Post: Sep 28, 2010 3:25pm Sep 28, 2010 3:25pm
When you trade demo, you risk nothing and you may do anything you like. Anyway you can start again and again if you need to.

Trading with real money does not allow you this. You take care of which frank or euro. I have read in one of the recent magazines: "The scare of losing money is several time higher than the desire to win it".
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