It is difficult to answer such a question without more information. Therefore, I will answer what is the most common cause of this situation.
1. First of all it might be unfamiliarity with the trading system. Need more testing, analysis of your actions and more work on… demo.
2. There is more courage on demo than in the real world. It is easier to make decisions. And if you have a problem here too - see point 1. Write down the rules of your trading system, prepare all the documents that will help you trade. Then, you need to test a lot, have a trade book, written down the rules of entry, management, exit, what kind of analysis you need to do, etc. You also need to work through some trades on a demo or simulator. All this in order not to have doubts and hesitation when entering the real market.
Next step in live trading. You must have a clear picture in your head if there is a signal or not. Then you enter with the smallest stakes the broker allows (because it is still a period of testing and refining the system).
The best traders (e.g. Joe Ross) even after many years often come back to demo - they check, test, observe. Only then they go live. Demo is not a shame, quite the opposite! It is a training ground.
PS. I recommend to look for solutions on your own. It builds knowledge and skills very solidly and quickly. The mind learns to automatically react to problems and find solutions.
Huge Changes, New Ideas & Decline Of Traditional Investing
Thanks for sharing. I also added that Since demo accounts don't have access to the real interbank market, you won't experience any lags or re-quotes when placing a trade on a demo account. Re-quotes often happen on real trading accounts, but almost never on demo accounts. Incidentally, you can also trade on Assetsfx. Assetsfx offers a demo account option for newbies, which I really like. Investing is extremely cost-effective.
I like how you mentioned that many traders have more courage on demo than in real life. Even if you learn about trading psychology, it doesn't really prepare you to deal with the rollercoaster of emotions that come with opening a live account. When demo money is on the line, it's easy to think clearly, follow your plan, analyze data, and make improvements. It's much different in the real world when your hard-earned money is on the line, or if you're presented with an opportunity where you think you can make a lot of money. I think demo accounts are an amazing tool, but they have some blind spots.
There are a few reasons why you might make money on a demo account but not in the real market.
One reason could be that you are taking on too much risk in the real market. When trading with real money, you have to be more careful and conservative with your trades.
Another reason could be that you are not used to the fast pace of the real market. In the demo account, you might have more time to make decisions, but in the real market, you have to act quickly and make decisions in a split second.
Lastly, your emotions can also explain why you might make money on a demo account but not in the real market. In the demo account, you might not feel as invested in your trades, so your emotions won't affect your trading decisions as much. Howeve, your emotions can affect your trading decisions when trading with real moneys.
Demo trading is just a warm up session. We are not really exposed to the risk and market conditions in real sense while trading on a demo account. Yes, the set up is the same but our mindset is different. It takes time for us to get comfortable with live trading and losses are absolutely normal when you start trading.
One of the reasons could be that you know it's a demo and no real money is involved, and with that assurance, you can trade with more confidence and positivity, whereas in live, you have created panic in your own mind, which could hinder your trading performance.
Demo account is only for practice. You make money easily in it because you don’t treat it like a live account. There is no role of trading psychology and money & risk management - which is an essential part when you trade live.
Demo accounts provide a risk-free environment where traders can take chances, while live account traders are under pressure and may hesitate to risk their assets. If you lose in a demo, you won't lose real money. Real money losses can have a significant psychological impact, as you'll come to realise that this isn't just amusing diversion.
On a demo account, you don’t really get an idea of what a risk is and what emotions you will go through when you will trade in the live market. This is why it is recommended leaving demo trading once you get an idea of the live market. You must move to a micro account to get the exact idea of how the live market functions and what emotions you will go through while trading.
When we trade in a demo account, we learn everything except for how to control emotions. Trading on a demo account prevents us from experiencing emotional satisfaction from winning and remorse from losing. However, when trading with a real account, you are fully focused on winning and losing. Your emotional stability is disturbed if you lose money, which has an impact on your next trades.
The name ‘’Forex’’ is a fear because maximum Forex traders losers from here. They lose due to their own faults and they are reluctant to maintaining any discipline of trading. They don ‘t seek for advice from mentors or senior traders rather they are surrounded by greed and over-expectations.
Masticate posted: When we trade in a demo account, we learn everything except for how to control emotions.
Absolutely! That's the best summary of the issue.
It is very important to learn on the system/strategy demo. Preferably to perfection. In this way, when trading live you will mainly be left with learning to control your emotions.
One experienced trader I interviewed mentioned to me that 90% of beginner traders' problems are insufficient knowledge of the system/strategy. And 90% of experienced traders' problems are related to emotions.
Huge Changes, New Ideas & Decline Of Traditional Investing
Demo trading is a risk-free environment, so traders can trade without worrying about capital losses or risk. Whereas in real trading, traders' emotions and the live market are not similar to the demo market.
I believe the basic answer to that issue is that there are no external factors that you face when trading in demo mode as opposed to live. You are well aware that you are using virtual money to make a profit and loss in the demo, but when it comes to real money, you are beginning to be very cautious since you are about to put real money into trading and you do not want to afford the loss.