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DEMO ACCOUNT vs LIVE ACCOUNT

MC85
Feb 02 2017 at 15:03
48 posts
shirley_F posted:
Isn't it that the stops are risk precaution measures? If the price goes against you, the bigger the stop, the larger could be the loss. Of course we need to have the spread in consideration as it is the main factor that can trigger your stops sooner or later. I think demo account is the best place to test and validate such situations.


Yes, precisely, use the demo to test how it all works - stops, swaps, spreads and so on!

ema123
Feb 03 2017 at 08:37
32 posts
As a newbie trader, I have always liked the concept of demo trading before going live. Most of the brokers offer same quotes, spreads and trading conditions on both demo and live accounts. At least demo trading allows you to sharpen your trading skills, test your strategies and learns from the virtual losses. Go live once you have started earning profits consecutively in demo trading. As a new trader, all you are looking to do is learn to trade profitably and the bigger prize will follow.

FxMasterGuru (FxMasterGuru)
Feb 03 2017 at 08:50
1607 posts
ema123 posted:
As a newbie trader, I have always liked the concept of demo trading before going live. Most of the brokers offer same quotes, spreads and trading conditions on both demo and live accounts. At least demo trading allows you to sharpen your trading skills, test your strategies and learns from the virtual losses. Go live once you have started earning profits consecutively in demo trading. As a new trader, all you are looking to do is learn to trade profitably and the bigger prize will follow.


As a somewhat more seasoned futures and forex trader I disagree, as demo trading has no stakes at all whatsoever and so the trader does not get even the slightest idea how does it feel to trade with REAL MONEY. So the very important psychological aspect is completely missed.

Also he/she may get the very false idea that the same strategy will work out in live trading the same way as in demo trading.

Just for the above 2 reasons I suggest even to a novice traders to open a VERY SMALL (even just $10) CENT ACCOUNT and to trade with REAL money and in REAL trading environment to avoid self-deceit and later losing precious time to rectify this self-deceit.

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Baldo (BaldoN)
Feb 03 2017 at 13:13
522 posts
Demo is good just to master strategy or to test the strategy, BUT the demo will not offer real execution, which will make the end result different, will not offer the real trading psychology situation.
Bottom line: demo is not bad, but do not overplay wit it :)

forxprotrade
Feb 05 2017 at 07:37
6 posts
I agree with FxMasterGuru here, the psychological mindset while trading in demo and environment and live environment is completely. In demo account, even when you incur more losses, that does not bother you but obviously when you lose your Real money, it will be of great deal to you. indeed you can practice and test your strategies in demo account but testing that on live account with a small amount is not a bad idea, in fact it will give you better understanding and tell drawback in a better way. On the other hand, psychological impact will also be as important.

mlawson71
Feb 05 2017 at 13:11
1487 posts
That’s a great way of putting it. Demo definitely has its uses, which are very necessary and one cannot go without them, but it’s still just a tool in the end.

Karel (Bohdan73)
Feb 06 2017 at 10:52
51 posts
I also agree that demo is a useful tool for newbee traders especially to see how it works and for advanced traders to test a strategy before going live. I like the concept of testing first.

Trade with determination!
jackwilliams
Feb 06 2017 at 12:57
22 posts
MC85 posted:
jackwilliams posted:
The only difference is in demo account your real capital is not at stake whereas in real account you trade with real money.


True, but don't forget the execution and all that goes with it (like slippage etc.).


yes absolutely. all the things are of due importance and must be kept in consideration while trading .

ema123
Feb 07 2017 at 11:05
32 posts
FxMasterGuru posted:
ema123 posted:
As a newbie trader, I have always liked the concept of demo trading before going live. Most of the brokers offer same quotes, spreads and trading conditions on both demo and live accounts. At least demo trading allows you to sharpen your trading skills, test your strategies and learns from the virtual losses. Go live once you have started earning profits consecutively in demo trading. As a new trader, all you are looking to do is learn to trade profitably and the bigger prize will follow.


As a somewhat more seasoned futures and forex trader I disagree, as demo trading has no stakes at all whatsoever and so the trader does not get even the slightest idea how does it feel to trade with REAL MONEY. So the very important psychological aspect is completely missed.

Also he/she may get the very false idea that the same strategy will work out in live trading the same way as in demo trading.

Just for the above 2 reasons I suggest even to a novice traders to open a VERY SMALL (even just $10) CENT ACCOUNT and to trade with REAL money and in REAL trading environment to avoid self-deceit and later losing precious time to rectify this self-deceit.




Yaa even you are right. Demo trading has its own loopholes. Sometimes the trader is unable to perform effectively with the live account and gets emotional when it comes to real money. This factor is missing in demo environment. But it helped me to at least learn more about trading. So I suggest it to use as a tool but i agree one should not completely rely on demo account.

mlawson71
Feb 07 2017 at 12:25
1487 posts
I agree. All that said, however, the demo account is still an indispensable tool for any trader. Yes, trading on it is not the same as trading with real money, but it also provides a safe environment to test out any new ideas, strategies, etc. without risking your money.

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