Demo Account or Live Account? Any Comments?

[Guest FloridaTrader]

"Demo trading differs from live trading for several reasons. Prices feeds can be different, features may be different, execution time may be different, requotes are not an issue and always accepted, no slippage, no waiting messages, no hesitations during news releases, and the list goes on and on." => Yeah! I like this Paragraph.:)

 

Hey buddy,

 

What I've noticed is that a lot of traders that start off with a demo account fail to spend 3-6 recommended months and jump into live trading and lose either the majority or all of their account because they became cocky and didn't use proper money management. Although demo trading seemed easy for them, they should have traded extremely low lots instead of jumping in and trading large lots.

 

Being an experienced trader Apple, do you feel the same? Can you give any advice to new traders?

[apple1937]

Yeah I agreed with you, Buddy. Many newbies just lack of "Patient" and jump into live trading quickly as they always think that they have been practicing "Enough" especially they have experienced rows of consecutive winning trades in their demo trading within short period!

 

The Feeling of "Over-Confidence" & the thinking of "They can easily predict the Market movement accurately" have completely covered their minds and this is a critical condition where most of them will start to "Break" their trading rules unconsciously. Instead of sticking to maximum 3% per trade, they are now risking more than 10% for instance, just because of their "Confidence" & innocent mindset. If market moves in their favors, they will continue to be "Great", what if the market moves in the other way round, will stress out their minds. For those unfortunate newbies who burn off their live accounts, may not only loss their hard earned deposits, but also their "Confidence" and "Courage" to trade again in the future....:(

[apple1937]

I know some of you would like to contribute your knowledge and information to this forum and we all know that "Sharing is Caring" which I learned from this forum years ago.

 

Please bear in mind that "Sharing correct knowledge and information is Caring" but, "Sharing misleading knowledge and information is jeopardizing!" Thought I have read about this years ago in the old thread at this forum..:)

Edited April 18, 2013 by apple1937

[masdarfx]

Ini bagi pemula yag ingin trading bisa langsung join ke (www.icvector.com) dan dapatkan bonus wellcome sebesar $10

[Cataclyst]

Most people will throw away real money for a while before they realize they should be demoing. You should at least prove to yourself that you're profitable for 3-6 months on demo before going live. Even then you may not be profitable when you start playing with real money. Real money = real emotions and if you can't handle your emotions it's gonna be hard for you to trade real.

[Rambo35]

I know I am the only one on this forum who disagrees about demo accounts, but I followed a different approach and I am glad I did. I opened a micro account with $100 and traded only 0.01 lots. At least I learned how to trade, from money management to trading psychology. You can't learn hoe to trade in a demo account. That is the opinion of a small minority of traders and I subscribe to that.

[Guest FloridaTrader]

I know I am the only one on this forum who disagrees about demo accounts, but I followed a different approach and I am glad I did. I opened a micro account with $100 and traded only 0.01 lots. At least I learned how to trade, from money management to trading psychology. You can't learn hoe to trade in a demo account. That is the opinion of a small minority of traders and I subscribe to that.

 

You are not the only one that disagrees with demo accounts. Another new trader is gaban and he feels the same way. Wish both of you new traders good luck. =))

Edited May 2, 2013 by FloridaTrader

[diablo88]

Hi Guys,

 

Does anyone have comments or suggestion which one could attract most for new traders? Would it be a Demo Account or Live Account?

 

There are some differences between live and demo account. I think demo for new trader (learner), and live for trader want to learn and gain profit.

[Guest FloridaTrader]

We do not abuse demo account, because without a demo account, we will not be able to know and understand the basic trading without real risk.

 

Good post, glad you changed your mind. Ignore Ramble Rambo, he is extremely new to the forex and thinks he can give advice to ignore demo. He is the one we need to ignore.

 

Keep up the good posting gaban.

[Loustar1]

What demo accounts should be used for.

 

1. Understanding the workings of the platform you are going to trade live money with. I personally know of several traders that started trading live accounts without clearly knowing how to enter/exit orders or completely understand the difference between buy limit and sell limit orders or how to even properly place a pending order or how to correctly place a protective stop where they wanted it. They often lost money in trades because they didn't know which button to hit to manage their trades.

COMPLETELY learn the instrument panel of the vehicle you are about to drive/fly BEFORE putting hard earned money at risk.

 

2. Studying and learning the behavior of the many indicators available and how changing the settings can affect your trade setups. You MUST have a solid understanding of what it is you want to see on the chart and which indicators will give you that information. You should NEVER place any trades unless you are clear about how your indicator(s) work and why you are using them. No one in their right mind would try to learn this with live money on the line.

 

3. After you have a set of indicators that give you signals that you're comfortable with you need to BACK TEST (look at historical data) and FORWARD TEST (place practice trades with your setup) the signals to see if they give you a trading method that has the potential to be a winner.

 

Abraham Lincoln once said that if he were given 6 hours to chop down a tree, he would spend 4 of those hours sharpening his ax. Fine tuning your system and the indicators/settings on a demo account is like sharpening your trading ax. Work out the kinks and flaws with practice money first - get a real idea of how you would actually manage your money/trades, move your stops, add on to trades or scale out of trades and know which method of doing so is best for the platform you are using.

 

4. Developing your trading mind-set. Now that you have all of the other issues in place this is where you TRAIN YOURSELF to trade strictly by the set of rules you’ve developed. If you have been careful to create clean simple rules then every one of you trade entries should look almost exactly the same. If they are not then NOW (prior to trading live money) is the time to fix and bugs or quirks in the rules. Ideally you should open a demo account with the same starting balance that your real money account will have when you’re ready to start. This way you can practice trading under conditions similar to your live account and you can get a real feel for how you will deal with profits, losses and trade management.

 

Basketball players practice thousands of free throws during PRACTICE to develop a built in reflex that will let them take their shot the same way every time when they are playing in a “live” game.

 

The same principle applies to trading in a demo account. You want to develop a “muscle memory” to pull the trigger at the right time every time a valid entry appears on your chart. You want the reflex to be automatic, instant, and done with an air of confidence that you gained by forward testing your system in demo and tweaking it until you have tremendous confidence in the method and its ability to be profitable over time.

 

When I work with traders I always demand that they take at least 100 trades in demo so that we have a body of trade entries and exits to study and tweak. Going “live” shouldn’t happen until you can prove that your system will make money and that you are mentally programed to take your trade EVERY time your rules dictate it.

 

Once you go “live” after following this routine you’ll have the confidence to continue to putt the trigger on your system even after it has a few losses in a row.

 

A demo account is one of the best tools a trader can have if he/she knows how to get the most out if the demo experience.

 

Thanks for taking the time to read this – comments welcome – let’s have a civil, organized, informative discussion about this as it is the gateway to true successful trading.

 

Be Well

 

Loustar1

[gery dum dum]

Demo accounts are good for testing platforms, some strategies and EAs - but the results of trading between live and demo accounts will always be different. I would recommend to start with minimum lots (0.01) - it's totally ok to learn forex trading in the beggining

[Guest FloridaTrader]

Well stated....great post gaban:)

[Guest FloridaTrader]

There are dozens of reasons experienced traders say one should learn to demo trade. Rambo successfully made 50 cents by live trading, which is proof enough that one doesn't need to demo trade (according to our new member..lol). Rambo is also just learning to trade....X_X

 

Message to those that want to learn the forex, you should learn to demo trade before you trade live accounts. Do not pay attention to ***** postings that tell you not to demo trade. :)

[Guest FloridaTrader]

totally agree....have a great weekend!:)

[luckyjack]

Of course demo, forget about REAL for first 3 months. (minimum)

[Guest FloridaTrader]

I know I am the only one on this forum who disagrees about demo accounts, but I followed a different approach and I am glad I did. I opened a micro account with $100 and traded only 0.01 lots. At least I learned how to trade, from money management to trading psychology. You can't learn hoe to trade in a demo account. That is the opinion of a small minority of traders and I subscribe to that.

 

This clueless new trader is posting on another forum that demo accounts are NOT NEEDED and also stating that forex trading is NOT RISKY. I think we can safely conclude that Rambo isn't going to be writing a book on how to trade the foreign currency exchange market anytime this century. =))

[Guest FloridaTrader]

I know I am the only one on this forum who disagrees about demo accounts, but I followed a different approach and I am glad I did. That is the opinion of a small minority of traders and I subscribe to that.

 

Not hard to believe at all rambo. We've all seen your postings on this forum and can believe you make up your own set of rules on how to do things. We have no doubt on your success in being in the 95% group. Congrats, you made it and I have a STRONG feeling you will also stay there too! =))

[Guest sherealikhan]

Forex is the largest commodity traded in the world. While almost anyone can trade currency now, it used to be an asset that only banks and large financial institutions with large amounts of capital could access. Fortunately, with the advent of the Internet, opening a demo account is the same for both institutional banks or hedge funds and individual investors conducting interbank transactions.

[trademanagerpro]

Hi Guys,

 

Does anyone have comments or suggestion which one could attract most for new traders? Would it be a Demo Account or Live Account?

As you are a new trader in forex i would suggest you to go for demo account it would be best for you.

[johnsmith55555]

guys all this talk about indicators your better using fxpremiere.com forex signals by professionals on your account . i subscribed to them for $199 and received 5 months worth of signals.. a real bargain....

[Guest FloridaTrader]

guys all this talk about indicators your better using fxpremiere.com forex signals by professionals on your account . i subscribed to them for $199 and received 5 months worth of signals.. a real bargain....

 

Don't spam this forum. Read the rules.

[Pipcrusher]

If you are beginner then you should use a demo account. If your system works on demo account then move to live account but with small deposit.

[orni308]

if you have good market knowledge there is no risk in going with active account but for bigners its better to start with demo account, and if you want to earn just invest in PAMM account.

[SweetyGirl]

For me the best choice is Cent account 10 usd= 1000 cents, not much but will help to be more organized.

[Goormes]

Actually, I think we can get familiar with the MT4 program (trading platform) with a demo account. And real trading experience with Live Account.