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Were you one of the world's best traders trading demo?

  • #21
  • Jun 14, 2015 6:57am Jun 14, 2015 6:57am
Quoting stan255
I don't understand how a majority of traders fail in a live account after being able to successfully and consistently 2x, 3x or even 10x a demo account. I don't get it. Unless those traders are :- 1. Overleveraged and got lucky or 2. They trade based on what they feel (aka no trading plan) and have 0% fear because its paper money The biggest hurdle I can see here that cause them to blow up is either :- 1. They hesitate and don't follow their trading plan (mindset related) 2. They take profits too quickly (mindset related) Other than those 2 reasons...
hI Stan255, just doing my Sunday prep work so I'll try and briefly answer your ? Actually, I don't think the majority of traders do reach the level where they are able to consistently double or treble their account, they are just in too much of a rush to make money without having really learnt how to trade. That's the easy one to answer. The more difficult issue, where the psychology comes in to play, is the one which sees traders who have spent the time necessary, usually years not months, to learn to trade, successfully build a demo account, but when they go live, just cannot get anywhere near the same performance on their live account as they did on their demo account. The reason, and it is a big reason, is because when trading a demo account, there is no FEAR!! This means that you can put on trade after trade, getting some wonderful big winners which override all those losses, losses which had no effect on your ability to keep on pulling the trigger. On a live account, things are very different and the losses are likely to disrupt your ability to trade freely, without fear or hesitation, the way you are able to on a demo. This means that unless you are incredibly disciplined on your demo account, trading it as far as you are able as if it were a real account, it is useless as a way of assessing your true performance under pressure. This is why trading demo is really only useful as a tool for building your strategy, but once you have this, the real learning comes when you go live. Those who do not start with very small lots well within their risk tolerance never last long.

Hope that goes some way towards answering your ?
  • #22
  • Jun 14, 2015 7:29am Jun 14, 2015 7:29am
The only and the most obvious answer is that in demo when you buy or sell, there is no counterparty. Now lets talk about the counterparties to retail traders:

Markets move because of market manipulation and if you are buying from a market manipulator (aka market maker, dealer, house) then is there any surprise to what the results will be? I'm talking about intraday here. If you hold longer than that things take a bit different twist but are still the same. Meet the new boss, same as the old boss. ie. the market makers change depending on what timezone is awake. Different market makers have different ideas about what the value of the instrument is based on their inventory and thus you get some big moves usually between when different markets close and open (london,us,asia).
  • #23
  • Edited 8:13am Jun 14, 2015 7:46am | Edited 8:13am
Quoting fxjesus
The only and the most obvious answer is that in demo when you buy or sell, there is no counterparty. Now lets talk about the counterparties to retail traders: Markets move because of market manipulation and if you are buying from a market manipulator (aka market maker, dealer, house) then is there any surprise to what the results will be? I'm talking about intraday here. If you hold longer than that things take a bit different twist but are still the same. Meet the new boss, same as the old boss. ie. the market makers change depending on what timezone...
Utter nonsense!! Trading a demo replicates putting on a live trade 100% - if it turns out to be a winner, so it would have done as a live trade, so I have no idea what this guy is talking about. The only difference between putting on a live trade and a demo one exists in your own head. On his next point, markets move because at any one time there are hundreds of thousands of traders around the world buying and selling - when the price goes up there are more buyers than sellers and vice versa. Markets move violently at the opening of major financial centres because a huge wave of traders enter the market and buy and sell depending on how they see the market. If you believe that the whole thing is rigged and under manipulation, then get another job because you won't stand a chance in hell making money in this one.

I have seen this kind of post many times here on ff, and it is very misleading for people who are new to trading, leading them to think that making money as a retail trader is impossible as the whole market is rigged by the big boys. This is complete rubbish, and you should ignore it as fxjesus hasn't got a clue what he is talking about. Spend long enough on ff and you'll see there are some brilliant, highly skilled retail traders here who make a lot of money. If the whole thing was manipulated ( whatever he means by that?) or rigged, price moves would be impossible to anticipate and there would be little or no structure to price movement. The fact that there is structure, that there are patterns which repeat themselves over and over ( not exactly obviously) means that with the right knowledge, experience and mindset, anyone can make a great deal of money, and I challenge anyone to prove me wrong.
  • #24
  • Jun 14, 2015 8:02am Jun 14, 2015 8:02am
Just wanted to remind people viewing this thread, that if you haven't watched the Mark Douglas interview link I posted above, then it'll be an hour of your time very well spent, because the entire subject of this thread is discussed and brilliantly explained by Mark Douglas.
  • #25
  • Jun 14, 2015 12:23pm Jun 14, 2015 12:23pm
Not a fan of Douglas really cause he says you have to execute orders like a machine (based on your strategy). Well if that's so then you should make an EA of your strategy and since there is not one EA that works that makes no sense.

With screen time trader improves his/hers intuition. That is one of the things machine does not have. Yeah you have the strategy etc but intuition above all.

As for me I was actually more successful in terms of max % gain on live than demo. I was simply more motiveted so do the right trades on live account so I guess we are all a bit different when it comes to demo/live.
  • #26
  • Jun 14, 2015 12:43pm Jun 14, 2015 12:43pm
Quoting cat
{quote} Utter nonsense!! Trading a demo replicates putting on a live trade 100% - if it turns out to be a winner, so it would have done as a live trade, so I have no idea what this guy is talking about.
It is that typical "I need a scapegoat because I don't want to be responsible for my own shitty trades or the crap I call a strategy".

Still, it's not 100% the same. Slippage is an issue for scalpers or news traders, otherwise I fully agree with you.
  • #27
  • Jun 15, 2015 12:08am Jun 15, 2015 12:08am
Many traders don't invest the proper amount of time into Demo trading prior to going live. They define a specific time frame that they will "demo trade." That is like a surfer going out to sea saying "I will catch 10 great waves in the next 60 minutes." The reality is, nobody knows when the perfect waves will come. It might be today - or next month. The only thing we can do as traders is prepare for the wave, patiently await, and then use proper risk to ride the wave when it finally arrives.
There is a semi controversial book called Millionaire Traders where one trader mentions he doesn't go live until tripling his account (if I recall correctly). I don't entirely agree with him, due to the fact that someone can triple their account using improper risk management and thus being rewarded for inappropriate trading behaviors. A poor golf swing practiced 1000 times does not make it a good swing. There needs to be an element of mathematical feedback prior to going live. One must have edge and the ability to survive over the course of the next 20+ yrs trading.
Patience like a Cheetah - awaiting the exact right moment.
  • #28
  • Jun 15, 2015 1:48am Jun 15, 2015 1:48am
Quoting Vitez
... As for me I was actually more successful in terms of max % gain on live than demo. I was simply more motiveted so do the right trades on live account so I guess we are all a bit different when it comes to demo/live.
I agree, you are much more likely to wait for the best trading opportunities on a live account, that,' hell I'll go for it anyway' factor is absent on live, or certainly should be.
  • #29
  • Jun 18, 2015 8:01pm Jun 18, 2015 8:01pm
Quoting cat
{quote} Utter nonsense!! Trading a demo replicates putting on a live trade 100%.
Yet nothing in that pointless reply refuted anything I said, so why bother replying... unless your agenda is to confuse people. (infact most people I see posting here seem to be some broker buddies/promoters intending on just that)

The only possible alternative is that you're a broker and are claiming that your demo account trades are actually performed on a hidden/internal live account in the brokers name to make the demo account trades behave like real trades would. Seems a little far fetched but who knows.

Okay there's one more alternative. You are only trading through 100% bucket shops, so whatever you do there is infact like a demo with the exception that if you turn out very profitable they have to do something about that as you'd be eating into their bottom line. So suddenly whatever your strategy is will probably stop working - unless you keep trade size within some limit. eg. lets say the bucket shop is profiting 1 million a month. Now if your profits are 2 million, do you really think it (your mechanical system) is going to keep working like the demo account. Dream on...
  • #30
  • Jun 19, 2015 5:05am Jun 19, 2015 5:05am
Quoting fxjesus
{quote} Yet nothing in that pointless reply refuted anything I said, so why bother replying... unless your agenda is to confuse people. (infact most people I see posting here seem to be some broker buddies/promoters intending on just that) The only possible alternative is that you're a broker and are claiming that your demo account trades are actually performed on a hidden/internal live account in the brokers name to make the demo account trades behave like real trades would. Seems a little far fetched but who knows. Okay there's one more alternative....
My reply refuted everything you said. I trade for a living, you don't, or you wouldn't have posted such drivel.
  • #31
  • Edited 10:28pm Jun 19, 2015 10:16pm | Edited 10:28pm
Quoting cat
{quote} My reply refuted everything you said. I trade for a living, you don't, or you wouldn't have posted such drivel.
I'm failing to see how can a rational person believe what you say so you have to be a promoter/marketer of some sort.

Your entire thesis is easily proven incorrect:

Lets say there's x amount on the offer. If you hit that on demo, does that x reduce by the amount you hit it on the demo also on the live market? Proof would be nice if that's what you are saying.

I don't use bucket shops so perhaps what you say is true for bucket shops - it certainly wouldn't cost them anything to change their live account quotes based on demo trader trades as a form of demo sentiment feedback system. But do you really think those demo trades go out to the real market outside the bucket shop? Does that not seem a bit far fetched - the bucket shop would risk their own money hedging demo trades with banks etc? You seem to believe they would do that to make the demo real. I say such thing could open up some sort of arb scenario so I don't see them doing that.


Just a quick reminder, the issue I had was your statement that "demo replicates putting on a live trade 100%". That means if demo trader puts on a demo trade of such large size that on live account it would need to be hedged (even in hybrid bucket shops), then the broker would risk losing their own funds if the trade was truly identical to demo.
  • #32
  • Jun 20, 2015 5:15am Jun 20, 2015 5:15am
[quote=fxjesus;8337417]{quote} I'm failing to see how can a rational person believe what you say so you have to be a promoter/marketer of some sort. Your entire thesis is easily proven incorrect....

I'm not really sure that the point you are making has any relevance to the trading world I or anyone else here on FF live in. There is no thesis, there is nothing scientific or complicated about the point I am making. When I put on a trade, as I do every single day perhaps 20 times, I time my entry, I set my stop loss, and the trade goes my way to my TP or it doesn't. If it doesn't, and my stop loss gets hit, it is hit at the same price and at the same moment whether I am trading live or on demo, and the same for my TP. I am shown by the market whether I am right or wrong, trading demo or live. From my own experience, there has never been more than a minimal amount of slippage between the demo account I used to trade and the live accounts I now trade. I am not sure what your definition of a bucket shop is, but if you mean a broker who gets its prices via live feed from the central exchange, then yes, like all retail traders, this is how I trade, and I have absolutely no reason to complain. Trading a demo account therefore is the single and only way for a trainee trader to test the efficacy of his or her strategy without incurring financial loss. It cannot replicate the psychological challenge of putting on a live trade, that comes later, but it does everything else.
  • #33
  • Jul 4, 2015 12:35am Jul 4, 2015 12:35am
Trading in demo is easy and profitable we are good trader in just few months. But in live trading it takes a lot of time to meet our targets. It is the main cause of loss for many traders that they think success of demo will be same in live trading.
  • #34
  • Jul 4, 2015 1:51am Jul 4, 2015 1:51am
IMHO demo account can works well if the trader simulates the same trading conditions unique to his background. The things like leverage, position size, account size, trading plan, strategy etc..., should be exactly same as if it was a live account. If one wonders about in the demo account there could be bad habits nurtured which will ultimately be carried over to live account and get burnt.

More you practice in a demo account with exact trading condition and mind set can make a better trader. I believe practice will make a trader perfect.
One Good Trade
  • #35
  • Jul 4, 2015 12:13pm Jul 4, 2015 12:13pm
Quoting PandionFX
IMHO demo account can works well if the trader simulates the same trading conditions unique to his background. The things like leverage, position size, account size, trading plan, strategy etc..., should be exactly same as if it was a live account. If one wonders about in the demo account there could be bad habits nurtured which will ultimately be carried over to live account and get burnt. More you practice in a demo account with exact trading condition and mind set can make a better trader. I believe practice will make a trader perfect....
No such thing as perfection in trading, but practice and the knowledge which comes from it, should take a trader to the technical level where he or she is able to be successful. The rest is all psychological.
  • #36
  • Jul 4, 2015 12:28pm Jul 4, 2015 12:28pm
Quoting PandionFX
IMHO demo account can works well if the trader simulates the same trading conditions unique to his background. The things like leverage, position size, account size, trading plan, strategy etc..., should be exactly same as if it was a live account. If one wonders about in the demo account there could be bad habits nurtured which will ultimately be carried over to live account and get burnt. More you practice in a demo account with exact trading condition and mind set can make a better trader. I believe practice will make a trader perfect.
This is what I did, with my demo account. Exact conditions of what would become my first live account. I just opened another small medium-risk live account—which I'm linking to this site—but for my main account. my trading was pretty much the same in demo as live. Slow and steady, low-risk.
  • #37
  • Jul 4, 2015 12:43pm Jul 4, 2015 12:43pm
Quoting cat
{quote} No such thing as perfection in trading, but practice and the knowledge which comes from it, should take a trader to the technical level where he or she is able to be successful. The rest is all psychological.
You are correct, I think better word should be profitable trader than perfect trader.
One Good Trade
  • #38
  • Sep 8, 2015 12:04am Sep 8, 2015 12:04am
Yes I was flying in airs while trading on demo account in only few days I feel I am a successful trader. Trading was no more difficult it was interesting . I use to do trading on demo all the day making profits , loose and recover loss. As I join real trading here something was different with my emotions, investment and risk taking. I can not make same profits.
  • #39
  • Sep 8, 2015 6:41am Sep 8, 2015 6:41am
If someone wants to read some bits about trading that's for sure been live and not demo... try this google search:

site:wsj.com .pdf trade
  • #40
  • Sep 8, 2015 9:14am Sep 8, 2015 9:14am
I think that all beginners should consider the risks and to be as theoretically and practically prepared to trade on exchange. Before you open a live trading account, it is best to be reinsured and think of your capital, you just need to open a demo account to gain practical skills trading with virtual money. The demo account will suit for any novice trader, as it will be able to enter in course of trading in the Forex and it is absolutely identical (as a rule ) to parameters of real account. Demo Account offers traders an opportunity to consolidate the theoretical aspects into practice, test trading strategies of market, working with trading platform, check the analytical tools of market, to develop their own trading strategies and to assess the technical basis of broker, ensuring in reliability and maximum comfort for us.
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