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

  • #41
  • Feb 7, 2016 2:20pm Feb 7, 2016 2:20pm
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. 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...
Yes Live and Demo are the same specially in Forex market whose main players are very big. if you buy or sell something as a retail trader you cannot change the direction of price even 1/100 pip. ( In 2013 it had been speculated that volume from retail foreign exchange trading represents 5 percent of the whole foreign exchange market).
So for us live trading and demo trading are only psychologically different. In today's world no broker can easily manipulate the price because most of the actions are recorded and can be used against them. Moreover, if they lose the trust of the traders they cannot make money in this business. So guys be relax and take it easy. No one is going to steal your money. These claims of manipulation or stop loss hunting are good for the losers looking for excuses.
  • #42
  • Feb 8, 2016 10:04pm Feb 8, 2016 10:04pm
Quoting cat
{quote} 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. when the price goes up there are more buyers than sellers and vice versa.




Quoting ebitalebi
{quote} Yes Live and Demo are the same specially in Forex market whose main players are very big. if you buy or sell something as a retail trader you cannot change the direction of price even 1/100 pip. ( In 2013 it had been speculated that volume from retail foreign exchange trading represents 5 percent of the whole foreign exchange market). So for us live trading and demo trading are only psychologically different. In today's world no broker can easily manipulate the price because most of the actions are recorded...



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  • #43
  • Edited Feb 9, 2016 12:18am Feb 8, 2016 10:46pm | Edited Feb 9, 2016 12:18am
Quoting cat
even if you have succeeded in doubling or even trebling your demo account, this is by no means a guarantee that you will get anywhere near that on your live account, and this is the paradox, as many of us have found out.

Just a quick reminder from the first post. So many have found apparently that demo trading is different from live trading and yet as I quoted in previous post "Trading a demo replicates putting on a live trade 100%" ... Yet it sounds like you guys "found out" that... it's not 100%?

"retail trader you cannot change the direction of price even 1/100 pip"


Due to chaos theory and psychology even so called sub-penny "retail price improvement" can change a "trend" because of these two concepts. See https://www.sec.gov/comments/265-29/26529-53.pdf


"price goes up there are more buyers than sellers and vice versa"


Or there could be a lot of small 1 share sellers across many levels and some/one person(s) goes and buys them at all those prices. (2 below)



Some types of "trends" I know
"normal") hedging/distribution based trend
1) sellers wanting more for what they have (or maybe they have nothing and are just wanting to avoid shorting too low relative to some other thing that is going up)
2) sellers not doing anything but buyers going through limited supply
3) short squeeze
4) chart pattern painting algo
5) option pricing & decay related trend
  • #44
  • Feb 9, 2016 1:07am Feb 9, 2016 1:07am
Quoting fxjesus
{quote} Just a quick reminder from the first post. So many have found apparently that demo trading is different from live trading and yet as I quoted in previous post "Trading a demo replicates putting on a live trade 100%" ... Yet it sounds like you guys "found out" that... it's not 100%? "retail trader you cannot change the direction of price even 1/100 pip" Due to chaos theory and psychology even so called sub-penny "retail price improvement" can change a "trend" because of these two concepts. See https://www.sec.gov/comments/265-29/26529-53.pdf...
Can you please explain what you really mean? And to what extent do you believe your opinions can affect trading?
And what is your suggestion please?
"If you can't explain it simply, you don't understand it well enough". Albert Einstein
  • #45
  • Edited 9:52am Feb 9, 2016 9:34am | Edited 9:52am
Quoting ebitalebi
{quote} Can you please explain what you really mean? And to what extent do you believe your opinions can affect trading? And what is your suggestion please? "If you can't explain it simply, you don't understand it well enough". Albert Einstein

You didn't explain what you meant by "direction".

The market is a computer. Computer does not care about trends, news, fundamentals or time. It processes events in a queue (well multiple parallel queues). So when your retail buy/sell order goes in, that is an EVENT. This event is reacted to by the dealer processing your order ("price improvement") and that causes event driven momentum traders to trade in the direction of the price improvement. So as predictably as the sun rises, the market always goes against retail traders. Some professor actually did a statistical study with 100k of real money and found this to be true so you don't have to take my word.
  • #46
  • Edited 10:09am Feb 9, 2016 9:52am | Edited 10:09am
My suggestion is to avoid getting retail price improvement when your margin utilization is high. The brokers have small print that allows them to "rehypothecate" your margin collateral. So before you even open a margin position, they are 100% sure you are going to lose it all, so instead of holding your money, they take proprietary positions to go the other way with your money. They do this through their market making or "liquidity providing" partners that kickback the money to the broker for sending in the retail order flow. This is called "payment for order flow" in the sec link.



from wikipedia

"market makers such as dealers and securities exchanges are willing to pay a broker for the right to transact with that broker's clients because they believe those clients will be uninformed traders"

Of course the funny thing about this is, the retail traders are the most well informed about fundamentals and news etc. The only thing they are not informed about is the shady business that causes them to always lose. Retail ETF funds and such don't actually have any money their clients believe they do. The dealers/hft/smart money stole the money the second it entered the ETF. To prevent redemption requests, the price is manipulated to go up and then it quickly crashes when enough "smart retail" start redeeming to avoid the rest of the masses "dumb retail" also trying to sell their investment.. because there is no money to give them to. It/their money was given to the smart money long ago.

They key difference is the use of margin. If you don't use margin then you are investor and the price is allowed to go to profit but since it goes to profit and you are not using margin, you will wait and wait for more and more profits.. and won't sell before it crashes (fees, big taxes are impediments to prevent you from selling also unless you are sure it's going to crash big time). And since you aren't the one hyping or manipulating the price you don't know if it will go back to profit or not.


But this is all about the retail "zero sum game". I believe institutions have access to another type of game where even if all retail stopped playing the game, they'd still get more money from the market.
  • #47
  • Feb 9, 2016 10:11am Feb 9, 2016 10:11am
Quoting fxjesus
{quote} You didn't explain what you meant by "direction". The market is a computer. Computer does not care about trends, news, fundamentals or time. It processes events in a queue (well multiple parallel queues). So when your retail buy/sell order goes in, that is an EVENT. This event is reacted to by the dealer processing your order ("price improvement") and that causes event driven momentum traders to trade in the direction of the price improvement. So as predictably as the sun rises, the market always goes against retail traders. Some professor...
Hello jesus,
Interesting, can you elaborate more on the market being a computer ? Thanks.
  • #48
  • Last Post: Feb 9, 2016 10:33am Feb 9, 2016 10:33am
Quoting metta87
{quote} Hello jesus, Interesting, can you elaborate more on the market being a computer ? Thanks.
There are bunch of computers of course but in aggregate you can think of them as one giant computer. To avoid making the market completely scary, chaotic and untradable for the dumb money that pays broker/dealer's yachts, they don't change the algorithms all the time. So in effect the market is a computer running a program that acts quite similarly for a while (when some trader finds a flaw in the algos, they fix it and then changes occur as everyone adapts to the new normal). So it creates a bunch of patterns that you can recognize.

Then the human traders mostly wait these patterns the market has been programmed to paint through having a plan or system, so they also behave predictably. It only paints them when positions are flat or no retail trader is winning - if retail trader is winning while leveraged then SEC and other agencies will investigate and they attempt to patch the problem that allowed retail to win with leverage.

So everyone in the market acts predictably and does not change what they do - except if their leveraged trade has turned to a loss, they may try to average in or otherwise get out at more favorable price. This can create chaotic appearing actions such as mean reversals. Once a mean reversal gets going, who knows what mean it is going to reverse to. Short term reversal could turn into long term reversal.
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