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Difference between Demo and Live

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  • #1
  • First Post: Edited Apr 15, 2012 1:38am Apr 14, 2012 11:18pm | Edited Apr 15, 2012 1:38am
Which one is better to learn forex?

Lots of people overemphasize the importance of demo trading. Demo account is like ABCD..in forex and to orient you to the trading terminal software and forex glossaries.

In my 6 months of live experience I find, in retrospect, demo is useless.

Demo will never give you the thrill, concentration, motivation to do best and keep your account viable. And also demo is like dissection of a dead body ( with no reflex). Only Live trading with Micro/Nano account will give you the opportunity to learn real forex.

1. Demo account: IMHO-Demo are useless as your order dose not count in the real game, ie, market is not considering your order, so if you put a 50 lot order in demo, you can double your account overnight. Not true for real.

2. Real account. With micro account with 0.01 lot ( actually a nonolot.).
IMHO, If you dont have 100 $ ( to open a micro account ) to invest to learn than you should not deserve to learn.

I am still in my first 6 month of live micro account trading.

Whats your opinion...? I appreciate your opinion.
  • #2
  • Edited 12:12am Apr 15, 2012 12:00am | Edited 12:12am
Difference between demo and live? You can't make/lose money in demo lol.

But seriously, demo is to get a person ready to trade live. You forget that demo training cannot hurt a person financially or cause emotional pain and insomnia like a bad trade on a real account!

When you really accept and know the risks to trading fx, that is when you should go live! Or if its just 100 dollars you could care less about.. but many times you will hear: I wish I had demo'ed more before I went live. It is good practice. But then again Losing money on a live account is good practice too lol

Edit:
Btw, a 50 lot trade really doesn't affect the market... The market is huge. Think about how many traders are out there trading lots...
  • #3
  • Apr 15, 2012 12:48am Apr 15, 2012 12:48am
Quoting mua
Which one is better to learn forex?

Lots of people overemphasize the importance of demo trading. Demo account is like ABCD..in forex and to orient you to the trading terminal software and forex glossaries.

In my 6 months of live experience I find, in retrospect, demo is useless.

Demo will never give you the thrill, concentration, motivation to do best and keep your account viable. And also demo is like dissection of a dead body ( with no reflex). Only Live trading with Micro/Nano account will give you the opportunity to learn real forex.

1....
Neither... Stop thinking money whilst you're learning and focus on learning the market. Do what you feel is my advice. If you think you've stumbled across a system that you think can make you money and you want to start making money with it... go live... If you blow you're account... start again... Go back to demo... Do whatever you feel is right for your current situation... All you will receive is either a lesson or a reward. There's no right answer, just do SOMETHING. only you know what is the right thing for you to do. If you fk up, then that's fine, just learn from it and keep going.

Just get your hands dirty and learn something from something every day. Of course never lose money you can't afford to lose, so if you go live, by all means set yourself a draw down limit (say 25% for example) that if your account balance hits you will immediately stop live trading and reassess your system (back testing or demo).

I think learning trading is much about being humbled over and over, until you learn a respect for the market that will let you take it seriously enough to listen. You're success will depend on your desire to succeed. Just get amongst it.

To answer the question directly they (live and demo) both have their advantages and disadvantages.
Time hides Nothing
  • #4
  • Apr 15, 2012 1:36am Apr 15, 2012 1:36am
Quoting CindyXXXX
Neither... Stop thinking money whilst you're learning and focus on learning the market. Do what you feel is my advice. If you think you've stumbled across a system that you think can make you money and you want to start making money with it... go live... If you blow you're account... start again... Go back to demo... Do whatever you feel is right for your current situation... All you will receive is either a lesson or a reward. There's no right answer, just do SOMETHING. only you know what is the right thing for you to do. If you fk up, then that's...
Thank you..!
  • #5
  • Apr 15, 2012 1:51am Apr 15, 2012 1:51am
Quoting 4tiger
Edit:
Btw, a 50 lot trade really doesn't affect the market... The market is huge. Think about how many traders are out there trading lots...
Is that correct..? Are you sure..?

Market always "tends" to move exact the opposite to your order, especially if your order is big.

50 lot is buying or selling 5,000,000 $ order ..right?

1 lot=10 $/pip
50 lot = 500$/pip

For long term trading if you want to accept larger stoploss (~200 pips or more as your buffer ie. 100000 $), is that practical at all?

Traders please comment on that....
  • #6
  • Apr 15, 2012 4:18am Apr 15, 2012 4:18am
If you think that Live is better , just go with it . It's not about how others people learn how to master FX trading successfully , it's about your own decisions , please understand that everybody have their own unique skills , different attitudes , different emotions , so they will have different ways to learn trading also . FX is not about winning as much as possible , it's about how to lose successfully . Once you can master yourself , then you can master anything easily . As my own experience, I haven't traded any demo account longer than 1 month lol , I also blow out more than 30 live account , but it didn't mean that I was not successfully and I'm going in a wrong way , as a result today I'm making some profits monthly , though not much as my first dream but the most importance is I'm not paying for my bad emotions anymore , of course I love the pure income that I'm getting monthly , my next objective was compounding and making a better life then .
If you don't wanna trade on DEMO , then you can just sit back and watch for charts , make your decisions in your mind and see how it go , it's another way to practice your patience , demo is not the only key . The only thing I have to admit that DEMO will not make you lose any money except your internet monthly fees lol .
Regards
Good Trading
  • #7
  • Apr 15, 2012 4:21am Apr 15, 2012 4:21am
Quoting mua
Is that correct..? Are you sure..?

Market always "tends" to move exact the opposite to your order, especially if your order is big.
i like these questions!

When you place an order, the Market doesn't move against your order on purpose. The market is created by buyers, sellers, and people waiting to buy and sell.

When the price moves against your order... then it just means that there are more People out there moving the market the other way.

The market doesn't have an agenda to make you lose money!

50 lots is 5 million, but read this:
According to the Bank for International Settlements,[3] as of April 2010, average daily turnover in global foreign exchange markets is estimated at $3.98 trillion.

(http://en.wikipedia.org/wiki/Foreign_exchange_market)

3,980,000,000,000 Daily.

If you and I were the only participants in the market... If you bought 50 lots on EURUSD and I sold 50 lots, then the market would not move!
It only takes one person to take the opposite side of your trade to counter any effect your trade would have on the market.

if what I am saying sounds interesting, I got most of this information from Trading in the Zone by Mark Douglas. the book gets into the subject a lot better though compared to what I explained haha. it teaches people a good way to view the market / teaches the right mentality to view the market.

you can find a pdf online!
  • #8
  • Apr 15, 2012 5:08am Apr 15, 2012 5:08am
DEMO v LIVE

1. First Question:
If I asked you to go a Casino this week how much could you afford to lose without it effecting your life ?

2.Open a Demo account on a MT4 Platform and load account with the amount you answered above. Tons of videos on YouTube on how to use Platform.

3. Start demo trading and show your results to another Trader as this makes you accept accountability to others.

4. Only then when have doubled the account without having to Reload the Demo with funds. Start thinking about Live Trading, double the account then double it again. Now you know you have an ability to Trade.

5. Live Trading - After doubling and doubling again a Demo you'll probably blow your first Live account. Why ? Emotions and Trading Psychology kick in as you have an attachment to that Cash you deposited.

6. Congratulations your now a Trader

Six steps condensed lol as there is a ton to learn between each step

DEMO v LIVE

Most just want to go straight to live

"Nah I ain't doing Demo, it ain't real I'm going Live. Ferrari in six months"


Inserted Video


Inserted Video


Inserted Video


I don't support the producers of the above videos nor do I want you to use there services. Just the content has a message for you

Safe Trading
  • #9
  • Apr 15, 2012 5:58am Apr 15, 2012 5:58am
Quoting Fx_007
DEMO v LIVE

Most just want to go straight to live

"Nah I ain't doing Demo, it ain't real I'm going Live. Ferrari in six months"
lol great videos..

Okay, I just thought of something for Mua.. To be a GREAT trader.. you're going to need PATIENCE and DISCIPLINE. I'm not there yet, but realize that this is what a demo account trains.

If you are not willing to put in time and effort even with demo trading... you know what I mean?

don't be in such a rush to make money is all I'm saying. and with this said.. I should take a break this week and catch up on some much needed reading.
  • #10
  • Apr 15, 2012 6:04am Apr 15, 2012 6:04am
Quoting 4tiger

3,980,000,000,000 Daily.

It is a deceiving number because a very large portion of it is taken up by bank to bank/ dealer to dealer transactions. The real actual raw money value that get's transacted is actually a hell of a lot smaller.

For example if say Microsoft wanted to bring their UK profits to the US they do so through a bank who takes that transaction for the conversion. Say it's a large amount like 100 million dollars and the Bank can't/ won't/ doesn't want to take on the risk of holding 100 million or perhaps simply can't/ won't fill the required conversion at that time... so the bank passes it on to another dealer who accepts it/ who breaks it up and passes it to another who needs the liquidity or for whatever reason. etc etc. The banks want the business but not the risk so they play hot potato for whatever personal motives they have for the money being offered. Whether that be liquidity restraints/ requirements or risk aversion. Maybe even speculation.

Each time the money is passed around it counts towards that 3 trillion dollar figure so the initial 10 million dollars may be transacted to by the end of the day 100, 200, 500 million depending on the activity and interest/ or lack there of in the currency.

I'm not sure of exact figures but hopefully you get the idea.

So in the end the actual amount required to move the price is actually a lot smaller than one would think. Also divide the daily turnover rate by the amount of currencies pairs there are including crosses, take a very low volume time of the day such as the few hours before the Asian session and you would be surprised I think at just how easily you could bump the market a few pips. Ya know... if you're into that sort of thing
Time hides Nothing
  • #11
  • Apr 15, 2012 6:57am Apr 15, 2012 6:57am
haha thanks for the clarification! I'm far from having a bankroll that will allow me to move the market!

I wanted to point out that when a large order is placed, the market doesn't move against the trader because of that order, it takes other traders putting in orders in the opposite direction to do that. It just takes 1 trader to negate the effects of your trade. As small traders it's better to catch waves rather than create them.

So there's really no difference in orders you place live or on demo affecting the market. 100 pip moves are not created by any single small trader. Market movement should still be the same whether you trade live or demo!
  • #12
  • Apr 15, 2012 7:45am Apr 15, 2012 7:45am
Quoting CindyXXXX
It is a deceiving number because a very large portion of it is taken up by bank to bank/ dealer to dealer transactions. The real actual raw money value that get's transacted is actually a hell of a lot smaller.
Thanks for the insight..
  • #13
  • Apr 15, 2012 12:54pm Apr 15, 2012 12:54pm
Demo = Video game. You die, but you have many lives and you can start over again without losing anything.

Live = Its like deployed in Kandahar. You make a mistake and you will loss your legs, limbs or your precious life.

What I prefer = Demo for a week or two then fund your account with $100 (I suggest Oanda as you can trade $1 trade size or any size for that matter).

If you loss the initial deposit, reload it with $100 until you can double that amount, in which time you can increase it with more funds you can afford to loss.

Cheers
Fear prevent possibilities, and so does Greed
  • #14
  • Apr 16, 2012 10:10am Apr 16, 2012 10:10am
Once you start winning at demo consistently and have studied much, don't keep there for long.

Only with a live account you'll feel how's it like to trade for real. You'll feel the pressure since you are with your hard earned money and sometimes, the actions that you think that are good to save your money end up being worse.

You'll have a totally different perspective once you're trading live, even if you treat a demo account like a live one, the feeling won't be totally there.

It's a lot more psychological "game".
  • #15
  • Apr 16, 2012 5:42pm Apr 16, 2012 5:42pm
The demo is the best option, esp for newbies who are not sure what Fx trading is all about. Once you start making some profit and consistently with the demo account, then you are ready to make the transition to a live account.
Good luck!
  • #16
  • Jun 29, 2012 10:44am Jun 29, 2012 10:44am
Of course is very useful. If you cannot focus when using demo, because you're mind set is looking at it lyke a child's play, than the problem is you. Demos are vital to know how tools work and to experiment new strategies.
  • #17
  • Jun 29, 2012 11:19am Jun 29, 2012 11:19am
Demo is virtual money. Live is YOUR MONEY!
  • #18
  • Jun 30, 2012 6:06am Jun 30, 2012 6:06am
Quoting Forexnuts
The demo is the best option, esp for newbies who are not sure what Fx trading is all about. Once you start making some profit and consistently with the demo account, then you are ready to make the transition to a live account.
Good luck!
I agree, I'm relatively new to the game and demo allows me to learn the rules first before I go live. I realize that live is going to be a new experience.
  • #19
  • Jul 1, 2012 1:25pm Jul 1, 2012 1:25pm
Quoting GreenAvenue
I agree, I'm relatively new to the game and demo allows me to learn the rules first before I go live. I realize that live is going to be a new experience.

Demo can help you to get the basics of the market, but in the long run, you will need real life live trading experience where you will learn how to control your greed and emotions.
  • #20
  • Jul 1, 2012 8:22pm Jul 1, 2012 8:22pm
The demo is great, but it is hard to stick to your rules on it. I used the demo for about 1 month and then went live, the only problem is you can not reset your live account is easy as you can then the demo!! Take the demo seriously and then you will know where you at.
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