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how do demo accounts differ from real live trading?

  • #1
  • First Post: Jun 5, 2011 4:11pm Jun 5, 2011 4:11pm
Hi everyone

I have been trading (VERY) successfullly for 2/3 years now on a demo account.

Turned 3k in to 12k or there abouts (3k initial deposit),leverage (from what I remember 200/1).(lot size 0.1/0.2 MAX)

I keep hearing how demo accounts differ from real live trading but how?

Is it purely emotion(to real money) or the actual data you recieve once live(speed,slippage etc)

Can I also ask(I use forex meta trader 4) ,does the demo for this give me a margin call)if I were to go in to a negative territory.Just wondering if my demo account would have REALLY been closed by now(I must stress I don't think it would have been given my figures) would be needed (live account).

Regards

Ken
  • #2
  • Jun 5, 2011 9:54pm Jun 5, 2011 9:54pm
Quoting kendeb57
I keep hearing how demo accounts differ from real live trading but how?
yes, the main obstacles are of psychological nature. mr. fear, mr. greed and subconscious (better said: unconscious) factors play out in a fashion you can't imagine until you actually 'live' it through. Almost everybody is emotionally tied to money and success and that ties are origin of all the trouble. I could write an essay on this but just search this forum; there are numerous threads dealing with the 'demo vs real' issue and fabulous posts on this topic.

KEEP YOUR RISK SMALL !!!
YOU WILL GET LOSERS; DON'T PANIC !

Read this thread: http://www.forexfactory.com/showthread.php?t=39514

don't bother with spreads/slippage/margincall etc.. there's no problem and no significant difference unless your br0ker is a genuine bucketshop (or you're scalping two pip targets)

good luck.
MarginTrader All Time Return: na
  • #3
  • Jun 5, 2011 11:06pm Jun 5, 2011 11:06pm
psychological as was mentioned, before

and sometimes orders will be difficult to execute on news, re quotes, stop hunting,

remember everyone is in it for the money

and your broker mimics the market, so the money YOU MAKE COMES OUT OF HIS POCKET.

of course there is ways to control his risks, i hear they keep 2 sets of books, but be aware that they wont let you make them go broke
AVT INVENIAM VIAM AVT FACIAM
  • #4
  • Edited Jun 8, 2011 1:26am Jun 7, 2011 1:44pm | Edited Jun 8, 2011 1:26am
Quoting kendeb57
Hi everyone


I keep hearing how demo accounts differ from real live trading but how?

Is it purely emotion(to real money) or the actual data you recieve once live(speed,slippage etc)
With so many brokers offering micro/nano accounts, why don't you start a small ($50 or $200 or so) live account and compare? You'll get an idea of slippage, requotes, etc, that you may not see on your demo.
Even though it wouldn't be much money, you'll get a taste of the psychological aspect too, as it's a nuisance and humbling to have to reload your account if you blow it.
It sound as though you've been demoing long enough and with good enough results to take the next step.
  • #5
  • Jun 8, 2011 12:43am Jun 8, 2011 12:43am
It is much more difficult to trade in the live account not because of the technical aspects but because we not only have to think twice, nor thrice, but many times because that will be real money on the line. So i suggest to treat the demo account as a live account so your good trading habits will be carried forward to the live account.
  • #6
  • Jun 8, 2011 1:38am Jun 8, 2011 1:38am
It is depends on your broker, sometimes the conditions for real and demo are very close, but sometimes when you win in demo you will lose on real.
Okay, let's have fun...
  • #7
  • Jun 8, 2011 6:16am Jun 8, 2011 6:16am
Quoting kendeb57
Hi everyone

I have been trading (VERY) successfullly for 2/3 years now on a demo account.

Turned 3k in to 12k or there abouts (3k initial deposit),leverage (from what I remember 200/1).(lot size 0.1/0.2 MAX)

I keep hearing how demo accounts differ from real live trading but how?

Is it purely emotion(to real money) or the actual data you recieve once live(speed,slippage etc)

Can I also ask(I use forex meta trader 4) ,does the demo for this give me a margin call)if I were to go in to a negative territory.Just wondering if my demo account...

I think the problem comes if you don't write down your trades or if you're trading alone. If you write it down it will hold you on track...

I have a set of sheets which I print out before the week with different rules... After I justify the trade and write it down I execute the trade and put the sheet in a shoe box in my living room...

I used o give it to the misses back in the day and she looked over it (and she could ask why I did this and that(she cant trade but she knows if it doesnt make sense and whenever I had broken the rules)).

If you trade too much give yourself vouchers, 1 for each day and put the time on the sheet...

If you have tripled your money you have the know how to and can more easily implement it to the real world, I have done so since 2004...

Enjoy your new mental job
  • #8
  • Jun 8, 2011 8:11am Jun 8, 2011 8:11am
Larseg i think you missed the point. "how do demo accounts differ from real live trading?"

Let me put it this way. If the London box is too big to play I open the garage and get out my Ducati and take it for a spin. I don't like motorcycles really but if you own a few, like me, it does them good to warm them up from time to time. The same applies to my women as well.

When back from my bike ride I shout at the gardeners for a bit then go and lie by the pool and sip champagne until lunchtime. Sometimes I invite Chonchy and his family over for a barbecue in the afternoon and we brag about our boats, holiday homes and stuff like that. Chonchy nearly always drinks too much (I'm a champion cocktail maker) and his wife and children have to carry him back to the car.

I have four monitors for trading. That is essential because only losers use one. And I have a room for them. And a secretary, but I'm not sure what she does.

Someone asked me if my new ferrari was a V12. I said what do you mean, V12? He said it was a type of engine. I said I don't know but it goes like fuck.

Now. Do I sound like a demo trader?
Gone to a better place
  • #9
  • Jun 8, 2011 8:45am Jun 8, 2011 8:45am
Quoting smikester
Larseg i think you missed the point. "how do demo accounts differ from real live trading?"

Let me put it this way. If the London box is too big to play I open the garage and get out my Ducati and take it for a spin. I don't like motorcycles really but if you own a few, like me, it does them good to warm them up from time to time. The same applies to my women as well.

When back from my bike ride I shout at the gardeners for a bit then go and lie by the pool and sip champagne until lunchtime. Sometimes I invite Chonchy and his family over...
yes yes...hehe...

I answered that question in the start but got carried away after...

In the beginning I pretty much said It doesn't differ if you have written down your trades and do something consistently...

When you are making money you are averaging pips into the positive, and thats it... There isnt really much more to it... At least that is the hardest part...

So short answer, there isnt any difference but mentally there is... Taking out the mental part is performed by having a boss or a set of rules...
  • #10
  • Jun 8, 2011 9:10am Jun 8, 2011 9:10am
Quoting Larseg
yes yes...hehe...

So short answer, there isnt any difference but mentally there is... Taking out the mental part is performed by having a boss or a set of rules...
Thanks for being patient, Larseg, I'm having a bit of a mad afternoon. Of course your answer is valuable and to describe the set of rules as "the boss" is spot on. Self discipline is definitely something we need to develop.
Gone to a better place
  • #11
  • Jun 8, 2011 1:59pm Jun 8, 2011 1:59pm
There is much more emotion involved in live trading. You're using real money, that's to be expected. Key is to stay composed and trade without emotion. Of course, there's a lot more to it...I'll be posting a video in the coming days on how to help make the transition.
  • #12
  • Jun 8, 2011 3:19pm Jun 8, 2011 3:19pm
Quoting smikester
Thanks for being patient, Larseg, I'm having a bit of a mad afternoon. Of course your answer is valuable and to describe the set of rules as "the boss" is spot on. Self discipline is definitely something we need to develop.

Absolutely, that was one of my worst mistakes... Could trade vigorously all day
  • #13
  • Jun 9, 2011 4:51pm Jun 9, 2011 4:51pm
Even if you're using forex robots to trade, there can be a huge difference in performance between a robot trading on a demo account and one trading on a live account, even with the same broker.

Most robots are scalpers, which makes them very sensitive to the trading spread and order slippage. Demo accounts can differ from live accounts in these two aspects.
  • #14
  • Jun 9, 2011 9:09pm Jun 9, 2011 9:09pm
Quoting Rlakhani00
There is much more emotion involved in live trading. You're using real money, that's to be expected. Key is to stay composed and trade without emotion. Of course, there's a lot more to it...I'll be posting a video in the coming days on how to help make the transition.
I look forward to that
  • #15
  • Jun 9, 2011 9:58pm Jun 9, 2011 9:58pm
There can be differences in data from demo to live as well this can skew indicators among other things. I don't know if this is a broker trick or just a difference in server times or what. I have learned ways to deal with these inconsistancies over time.

I know there are some brokers demos out there that are nearly identical, but even with those you can have minor differences.

The emotional thing is something you can't put a finger on until you go live. There will come times of feeling desperate... sweating bullets, heart burn or whatever other ailments you might have. No one plays this game to lose and if it looks like you are gonna lose it's a very defeating mind game psychologically.

Realize a good amount of people quit because they can't overcome the statistics. If you bring your attitude of the demo over to the live and can execute it without second guessing yourself you are on your way.

But start small... if you can do it with big lots on a demo you can do it with small lots on a live account.

Some people get behind the eight ball and blow a small account then get on this kick they can win it all back by jumping back with a larger account and upping the lot size. Remember patience is just as much a part of it as other emotions like Mr. Fear & Mr. Greed.
  • #16
  • Jun 11, 2011 11:54am Jun 11, 2011 11:54am
well, the problem with demo accounts is that you wont feel any pain(losing a real 50bucks is a lot of different). I would rather suggest to open a small real account, instead of spending to much time with a demo account.
  • #17
  • Jun 12, 2011 11:33am Jun 12, 2011 11:33am
From my point of view in demo accounts you can make decisions much more easily. There is no adrenalin rush when you win or lose.
  • #18
  • Jun 12, 2011 1:31pm Jun 12, 2011 1:31pm
Quoting blacktrades
well, the problem with demo accounts is that you wont feel any pain(losing a real 50bucks is a lot of different). I would rather suggest to open a small real account, instead of spending to much time with a demo account.
Actually, treating my demo account as if it were real money (and starting small, it's a good thing OANDA allows you to change your starting balance) has made me successful in my real life trading. But each to his own I guess.
  • #19
  • Jun 20, 2011 11:34am Jun 20, 2011 11:34am
I've noticed major difference when trading the news spikes. Slow execution and slippage might be a real problem with some brokers, while in their demo accounts it's all nice&smooth.
  • #20
  • Jun 21, 2011 11:08am Jun 21, 2011 11:08am
Quoting kendeb57
Hi everyone

I have been trading (VERY) successfullly for 2/3 years now on a demo account.

Turned 3k in to 12k or there abouts (3k initial deposit),leverage (from what I remember 200/1).(lot size 0.1/0.2 MAX)

I keep hearing how demo accounts differ from real live trading but how?

Is it purely emotion(to real money) or the actual data you recieve once live(speed,slippage etc)

Can I also ask(I use forex meta trader 4) ,does the demo for this give me a margin call)if I were to go in to a negative territory.Just wondering if my demo...
Hi,
i think that biggest difference between trading demo and real account is in emotions, because you know what do you risk .. your money = your work .. when you trade demo, you risk nothing, when you make mistake it doesnt cost you any money, my personal advice for all rookies is .. dont trade demo .. its much more better trade small real account (100 - 5000 $) than trade demo account
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