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how do demo accounts differ from real live trading?

  • #21
  • Jun 21, 2011 11:09am Jun 21, 2011 11:09am
Yea, the biggest obstacle are emotions. But i think those demons (fear, greed etc.) should go away with experience, 'cause experience and good results give you more confidence.
  • #22
  • Jun 21, 2011 1:39pm Jun 21, 2011 1:39pm
Quote
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)

before you start live trading i would do a detailed analysis of your performance: how you did achieve your results and how this way could affect your mental state while trading with real money

for example did you achieve your demo results by accepting low RvR, huge drawdowns, martingale stuff and probably not using stop losses which is the easy way to triple up demo accounts?

unfortunately these tactics do not work well in trading with real money cause they will make the trader suffer too much
  • #23
  • Jun 21, 2011 1:55pm Jun 21, 2011 1:55pm
Quoting fx111
Yea, the biggest obstacle are emotions. But i think those demons (fear, greed etc.) should go away with experience, 'cause experience and good results give you more confidence.
Yes, thats absolutely true.
  • #24
  • Jun 29, 2011 12:12am Jun 29, 2011 12:12am
Quoting the redlion
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
The major difference is in the mental aspect as mentioned through out this thread.
Just wanna point something out with demo and real account like what I quoted from redlion,some say:
-they keep 2 set of books
-demo & real are in 2 different servers
-pricing are not quite the same
-demo is somehow programmed to be easier

True or not,I woudn't mind to sweat on these..winning or losing depends on you.
  • #25
  • Jun 29, 2011 4:05pm Jun 29, 2011 4:05pm
I have been trading demo for the last 3 months and I feel like I am trading live I am full of emotions even on dummy money I keep creeps and jumps, from my own experience demo accounts feel like real accounts and money. A broker said to me that the live market prices between demo and live accounts are the same demo has slightly faster executions!

Here is a question always wanted to know. If you have a successful trade strategy on demo has it failed on a live account or vice versa?
Find your Favourite Pattern
  • #26
  • Jun 30, 2011 5:00am Jun 30, 2011 5:00am
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 apologize for my question, but you have been trading on demo account for 9 months?
  • #27
  • Jun 30, 2011 6:21am Jun 30, 2011 6:21am
I think that the main differences are psychologically based. As soon as you start trading with real money, risks go up and you aren't playing the spreads the same way you were in the past.

This is why I usually advise transitioning to micro lots first to minimize risk and then moving up accordingly. This is a great way to build your confidence again on a small step up rather than a giant leap.

I have heard, though, that some brokers demo account and live account are not run the same which could effect the win percentage of bots, IMO
  • #28
  • Jun 30, 2011 7:56am Jun 30, 2011 7:56am
Quoting josef
I apologize for my question, but you have been trading on demo account for 9 months?

2/3 years
  • #29
  • Jun 30, 2011 7:57am Jun 30, 2011 7:57am
Quoting coreyrab
I think that the main differences are psychologically based. As soon as you start trading with real money, risks go up and you aren't playing the spreads the same way you were in the past.

This is why I usually advise transitioning to micro lots first to minimize risk and then moving up accordingly. This is a great way to build your confidence again on a small step up rather than a giant leap.

I have heard, though, that some brokers demo account and live account are not run the same which could effect the win percentage of bots, IMO
Thanks for your reply
  • #30
  • Jun 30, 2011 11:30pm Jun 30, 2011 11:30pm
Quoting kendeb57
2/3 years
Sorry, that's why I was asking. What does it mean? 2 years? 3 years? 9 months?
  • #31
  • Jul 1, 2011 12:14am Jul 1, 2011 12:14am
Quoting josef
Sorry, that's why I was asking. What does it mean? 2 years? 3 years? 9 months?
Aproximately 26 months or thereabouts
  • #32
  • Aug 4, 2011 5:38pm Aug 4, 2011 5:38pm
It depends on the broker but sometimes your actions cant be executed as quickly on a live as a demo account, especially if the currency is moving rapidly.
  • #33
  • Aug 22, 2011 10:27am Aug 22, 2011 10:27am
well I started live today.

and lost a few pips.

got into a few more trades and started revenge trading.

for me its been purely emotional. i'll let you know what else happens.
  • #34
  • Aug 23, 2011 7:08pm Aug 23, 2011 7:08pm
Guys I want to know whether:

We are playing against the Dealing Desk broker, something like Casino where they make money out of spread & the money you lose while paying out your winnings. So when you win they are not happy.

What about No-Dealing Desk (STP or ECN+STP), like FXCM (i hear their micro account is DD) or Oanda, are we playing with the market or the brokers, meaning they make money out of spread & commissions but wining/losing is from the market? Which has less conflict of interest.
  • #35
  • Aug 24, 2011 8:27am Aug 24, 2011 8:27am
Quoting burningbun

What about No-Dealing Desk (STP or ECN+STP), like FXCM (i hear their micro account is DD) or Oanda, are we playing with the market or the brokers, meaning they make money out of spread & commissions but wining/losing is from the market? Which has less conflict of interest.
Hi burningbun

FXCM uses No Dealing Desk (NDD) forex execution for micro accounts. With our NDD model, you're right that we’re compensated through a pip mark-up on the spread which essentially acts as a commission. Our revenue with NDD execution is tied to our clients trading volume - not client losses since we're not taking the chance of a dealer managing a position properly.

A dealing desk broker could possibly make more money by trading directly against their clients by going for more than the spread. From a business stand-point, dealing desk execution introduces more risk if a dealing desk broker has to be concerned with how clients are managing their trades. If all of their clients begin to win, that could then result in larger losses for their business.

You can learn more about FXCM's NDD execution at http://www.fxcm.com/forex-execution-center.jsp

I hope this helps and let me know if you have more questions!


- Jason
  • #36
  • Aug 25, 2011 4:32am Aug 25, 2011 4:32am
Quoting the redlion
and your broker mimics the market, so the money YOU MAKE COMES OUT OF HIS POCKET
How does that work, I thought it would be from another trader?
  • #37
  • Aug 25, 2011 4:38am Aug 25, 2011 4:38am
Quoting duderoo1
How does that work, I thought it would be from another trader?

It could be but the minute you think your broker isn't a trader is a big mistake.

You have to ask yourself why would my broker stop with winning just one side of the trade? If he has another trader on the otherside of the trade why wouldn't he try to win that side too?

Your broker in most cases is greedier than you. Otherwise there wouldn't be fines of $2 mil dollars. (FXCM)
  • #38
  • Aug 25, 2011 4:21pm Aug 25, 2011 4:21pm
Quoting burt
well I started live today.

and lost a few pips.

got into a few more trades and started revenge trading.

for me its been purely emotional. i'll let you know what else happens.

I'd be interested to see how it goes for you.(please NEVER revenge trade)

I am about to go live on a £2k account,not my money(but will treat my trading) as though it was.

Demo/live,what's the difference,if it isn't your money once you go live,(a LOT if you have a conscience)and I have.

Regards

Ken
  • #39
  • Aug 26, 2011 1:32am Aug 26, 2011 1:32am
Quote
I am about to go live on a £2k account,not my money

Ken, trade only with your money.

Josef
  • #40
  • Aug 26, 2011 2:14pm Aug 26, 2011 2:14pm
Quoting josef
Ken, trade only with your money.

Josef
Can you please explain why

Regards

Ken
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