Is demo a step before real trading?

demo is demo... in demo land i am a multi millionaire.... live trading is so very different.

Totally agree with you.

Hello.

Interesting topic.

I am new to this whole "game" of fx-trading. And I am - actually - very glad to learn the ropes on a demo-account. Having the opportunity to get into the general handling of the trading-application and also watching and learning from the live-action on teh market without having to risk anything is very comfortable. And I concurr: I bet the emotions involved with trading wins and losses will be a lot more powerfull then what I experience right now with the demo. But I am glad to have the demo, because here I already experience certain "risks" and greenhorn-fails about which I read a lot on different tutorials, literatur or heard on a variety of different video-casts.

I have passed my first week now. And I wonder: Some of you have mentioned that one should start with real money not earlier then 3 months after having some time with a demo-account. Why 2 months?
Others of you tell me (and other newbies) to get into the meat-grinder asap in order to learn the real ropes and the real emotions in order to face real risks and probably to develop the proper respect for this whole subject. I am no sure if I like this kind of recommendation.

Best wishes!
Curtis

As others say, there is a big difference between the psychological load on demo, and on live.

But if you got similar results on a tiny live account, and managed that for a few months without much drawdown, then your long term prospects would look good.

I do not wish people good luck, instead I wish you success!

I think the way you know you've graduated from demo is when you get sick of placing fictitious trade when you know you have a firm grip on your system and its consistently winning.if you can find a statistical edge(on more than 100 trades) in less than 2 yrs hats off!

the psychology part is the easy part,a bit of fiddling at first,you get disappointed with yourself and start believing you have serious insidious problems.

then just like that they start disappearing and you become more machine like in your execution.

constantly you have to fight with bad trade practices, you get positive reinforcement when you study your system performance without your interference.

you slowly develop self control and consistency.

Don't stay in demo fantasyland too long. I know it's painless when you have losses on demo but nothing teaches a lesson faster than losing some cold hard cash.

I didn't see it mentioned here but if you are going to demo trade then open a demo account with the amount of money that you are going to fund a live account with. No point opening a $50,000 demo when you are only going to fund a real account with $500. It may be great earning those big bucks on the $50,000 demo but when you go live the returns on your $500 account will probably be somewhat disheartening.

Best to keep it real.

Oh, Kanzler. I see you've been brought back to life. Very bad decision by admin, imo, to have you erased in the first place.

Watch out for the bloke that got you erased because he's back .... again.

Demo is a mandatory step before going real. You need to prove to yourself that your edge is real, and the most straighforward way is without all the demons that haunt you when you trade real money. That is at least a 3 to 6 months profitable in row on demo, so you can meet your most common ebb & flow states and learn how to manage them without the additional pressure that real trading brings. Imo.

Hello.

Many of you claim that a demo-vita of 3 or maybe even more months is good if not vital for anyone to become a fx-trader. But I wonder how this correlates with the many demo-account offerings which are only there for you for 20 day, 30 days or 4 weeks or something similar. I know, theoeretically you may try a demo of a certain broker several times with fictitious aliases before you go for the real trade; or you may chose one of those brokers offering you a (nearly) unlimited demo-account ...
So, why is there such a discrepancy between the demo-offers on the one hand and the wise advice by the forum-members here?

Best wishes!
Curtis

Brokers want you to move to a real money account as soon as possible. They know that the faster you do that the chances of you losing your account are excellent. They have statistics on their side.

I'd say that the brokers offering you an unlimited demo account are the more client friendly brokers.

Hello.

@Patience. Ok, I understand this. Something like this I had on my mind as well. But I was not so certain. Is there any statistics available on the www that depicts this situation? Here on this forum I read numbers like only about 5% oder 1% or even less of the FX traders would be successfull, while all the others would fail or at least leave the trading again ... Are these estimates? Or are these numbers based on publicly available statistics or charts?

I need to repeat myself anyway: I am pretty glad that there is the opportunity to 'test your skills' and 'learn the ropes' regarding FX trading. Although the cash in your demo-accounts is virtual, you really get a variety of emotional reactions to your activities and the developments on the market. And I think there is a lot more value for each one to learn or at least experience these things without wasting money and - maybe - by loosing the money getting kicked out of the market to soon; maybe you just got unlucky on your first days and did not necessarily choose your actions poorly and you fell prey to an in the end remarkably uncertain and unpredictable market; and loosing real money would simply discourage you from going on ... That, too, may be a reason while demo accounts are "good" - but arguable, though, if they are necessary.

Best wishes!
Curtis

This is exactly why Live trading is the only way to master your emotions. If you don't accept your losses on Live, you will go nowhere in trading.

Arguable. I think this boils down to someone's personal attitude.
I think it is valid to say that there are people who learn a lot, even if they don't use real money but fictitous money, because they have the right "gamers' attitutde" - like: "I. Want. To. Win. This. Game. And. I. DON'T. Accept. Loosing." And in contrary there will be people who won't take a lot out of a demo but who would feel encouraged to do this trading seriously by using their real cash. So the question about Demo or Not cannot be answered with the one answer of yes or no; it simply depends.
And in my case I and for people like me I suggest doing the Demo-thing ...

Best wishes!
Curtis

If you can't accept your loss, you can't be a trader ...

This isn't a game.

I know. And this is exactly not what I implied. But the "demo" in fx-trading is nothing else but a game. And you may use the fx-demo-account for learning basics by "playing" and fiddling with the trading-application, using fake-money for your trades in order to get rich or poor, and all of this without any risk or consequences.
But I also say that someone doin' the demo more seriously and thus treating it not like a game but like something close to the real-fx-trading, this guy or girl will benefit from having done the demo before getting into the real trade. But if you lack the serious attitude in this game, the demo most likely is point- and maybe even senseless.

About real trading itself: This is not a game. And I don't want anyone to understand me wrong about this and quote me differently.

Thank you.
Best wishes.
Liam

Hello

No one really knows what the true statistics are. Forex Magnates do a profitability report every quarter for the US forex retail market.

http://forexmagnates.com/q4-2012-for...-and-accounts/

As you can see the losing accounts range from 53% up to 77% so the odds are still in the brokers' favour. Whether you choose to believe these stats is up to you.

Takisd, who used to be a director of FXOpen, wrote this:

So, who knows?

As for a demo account, different people will have a different opinion about it. I didn't feel any emotion on a demo account because it's not real. It's monopoly money and only good for learning the ropes and the platform, as you stated.

This is true only if the losing accounts are bigger (funds) than the winning ones ...

True, true. And it's only indicative of the US retail market anyway.

As I cruise around this worldwide forum I get the feeling that 95% are profitable with only 5% losing. I think the brokers are saving face.

Hello.

I can tell you one thing: Doing the demo as a totally new would-be-trader on a demo account may be very good to learn about the "emotional" and "irrational" traps in fx trading.

During this day I focussed on the EURUSD. And I was pretty "glad" about how things worked out for a while. I payed close attention to the economy-news as well as sticking to the "rules" or advice on the usage of the various indicators (Stochastic, MADC, Fibo). Thus my scalping-attempts payed out to a small but certain degree.

All of a sudden the EURUSD spiked - like crazy. And I did not understand it (most likely I did not consider the right outcome of certain US-economy data). At first I waited a few minutes and searched for any kind of news relating to this spike. But I found nothing. Then I double-checked the indicators and drew my conclusions which might have not been the right conclusions in the end.

So, after about 10 minutes watching the devolpment I told myself: "Ok, according to the indicators on different time-charts and based on what I observed during the last weeks every now and then, this might just be nothing more then an unrelated spike for a few minutes to make the market live for a bit, which in the end "will" turn around again; lets get 'short' then ..."

But the spike went on and on.

Here I made an irrational decision and went for another 'short', 'cause I told myself: "Ok, as soon, as EURUSD decreases again, I will have a better gain then." And even worse: I decided to go for a much bigger lot then usual, because I considered this spiking as the big time opportunity to draw a better revenue out of it. Greed - a poor advisor. Also I didn't check the indicators; I just did what I did.

So this was an utterly emotional and irrational decision based on nothing but thin air.

And thinner the air became, because EURUSD still skyrocketed like crazy and crazy. And now I have a certain loss. And I won't complain about it, 'cause that's what might happen with poor decisions.

But I feel bad. This was no good move on my side. And I am kind of mad about me, because I so easily lost control over things - especially me ... So I understand this lesson: Greed, irrationality, emotional actions - it is like what "they" write or mention in all those tutorials and guides. And I did not listen to them in this spectacular and small moment.

Now: I am pretty happy that I made this experience during a demo session and not while having done this with real money. Naturally the pain would have been a lot worse. Instead I have learned something from this 'game', and I will pay much closer attention the next time - and I also won't listen to hastened imaginations again about what might or might not happen ... If I had done this with real money I wouldn't have lost house, family and my property; but the sting would have went very deep - maybe even deep enough to give up the trading again although I did not get really started yet, did I ? The consequences from this demo are less troubling and especially without impact on my real life; but the pain from the loss and the certain disappointment about me and my decisions is a challenge for my future efforts on trading - even with a demo ...

Well, let's see what is going to happen during the next days. I will work on compensating the losses in my demo-account. And I think if I achieve this by sticking more to discipline and self-control, then I will be quite happy again.

That is why I - again - speak in favor of running demo-accounts and especially use the demo-account as seriously as possible - and that especially if you are new to the trade ...

Best wishes!
Curtis

Pretty good results. Of course two weeks doesn't mean a lot, but it is still some kind of time span. However, trading for as long as half a year should be enough to know if your trading technique is worth anything. Right now it's too soon to judge anything. You could have jumped in an early trend train with several trades or been just lucky. Judging from your graph, you didn't suffer any draw downs, but they will come, be sure about that. That's when the real challenge begins; It's when your strategy start's failing you for a day, two, a week or even longer. That's why I suggest to wait much longer, because you haven't experienced what's like to lose your money and what's like when the market starts going against you not once and not twice. After you suffer some real losses, deal with your emotions, analyze your mistakes, improve your trading, adapt to the market conditions and start trading, it's too soon to tell anything. So, yes - trade in demo, improve your strategy. And yes - trade with your real money, suffer losses, polish your strategy and trading character and start living off it.