Demo Account vs. Real Account

[mumuy]

It’s a good idea to explain about why we must use demo account first before we opened real account. Yes, we must try to apply what we have learned in the theory but we use simulation which is made as similar as happened in real trading. We could use our strategy, psychology, and also our money management better if we trained in demo first although it didn't guarantee we won't suffer loss.

It gets you accustomed to the environment and the platform, how the prices change in real time. It educates you about Spread, Pip, Bid Price, Ask Price, Orders, Positions, Take Profit, Stop Loss, Slippage etc. And you can do some back testing, that when the market do this so then what happens and what time of the session. It is not necessary to do it for long time it's until when you get to know and understand everything. Everybody is different and the way they learn, some are fast learner and some are slow.

 

[Emibluz]

It’s a good idea to explain about why we must use demo account first before we opened real account. Yes, we must try to apply what we have learned in the theory but we use simulation which is made as similar as happened in real trading. We could use our strategy, psychology, and also our money management better if we trained in demo first although it didn't guarantee we won't suffer loss.

It gets you accustomed to the environment and the platform, how the prices change in real time. It educates you about Spread, Pip, Bid Price, Ask Price, Orders, Positions, Take Profit, Stop Loss, Slippage etc. And you can do some back testing, that when the market do this so then what happens and what time of the session. It is not necessary to do it for long time it's until when you get to know and understand everything. Everybody is different and the way they learn, some are fast learner and some are slow.

Nice post. This is the point I have been trying to bring out. Some feel that demo is useless, but they are wrong. It is a very useful tool, but it won't guarantee you profit in forex. Only when you start trading live, that is when you will understand the emotional and psychological aspect of forex trading.

 

[Fxpipper]

I agree to an extent, and yes, traders can use the demo to work out how the market works, how to place orders, learn to use indicators etc. But for actual experience in trading, would suggest that you move ahead with a live account, pref nano.

 

[bablogfx]

Important point of using demo account is getting accustomed to trading platform interface, understanding fittings of it and preparing for serious personal trading. I still trade on Hotforex demo account, testing some tricks and fresh strategies. We should not give up demo account even we feel ourself professional in real trading.

 

[tabalo]

Keep going this way and you will progress in trading. Demo account is a must-to-do step in Forex.

 

[gerski]

As many would say that forex is a step by step process.It is better if as newbies to open up a demo account to try our brokers trading platform and those aspects which was mentioned by other members untill such time that you are confident enough to do the actual trading.But ofcourse it would not be the same cause in actual trading real money will already be present unlike for the demo account.

 

[Rambo35]

Nice post. This is the point I have been trying to bring out. Some feel that demo is useless, but they are wrong. It is a very useful tool, but it won't guarantee you profit in forex. Only when you start trading live, that is when you will understand the emotional and psychological aspect of forex trading.

Demo is useless for real traders, but of course people like you need them as it give them the right feeling. I know that with 'some feel that demo is useless' you referred to me as I think I am the biggest opponent of them and advice against using them.

Learn to trade in mini-account and if the thought of losing $500 in a mini-account frightens you then you should be not trading. What makes matters worse is if you think $500 is a large sum of money; then you are definitely in the wrong trade.

 

[David Train]

They are two different things! the first (demo) is used for beginners trader to learn how to trade. Or to test this oe that trading strategy or idea or advisor. But! A trader can become a professional trading only on demo account. They are totally different. Your emotions are different. Your mind is different.
When your are trading on virtual money you are nor afraid of a loss, when you are trading on your personal funds you are afraid to lost them. So, your decisions will be totally different. So, in order to become a professional you should move from demo to real account and try to control yourself, your emotions and patience.

 

[Rambo35]

But! A trader can become a professional trading only on demo account.

This just makes no sense. You don't even trade in a demo account so how can you claim to become a professional in a fake environment?

 

[David Train]

This just makes no sense. You don't even trade in a demo account so how can you claim to become a professional in a fake environment?

I ment that If a trader trades only on demo account he can never become a professional trader, because emotions and trading conditions are different.
A trader can become a profession only if he trades real account and do it well.

 

[mumuy]

Before one can be a profession, one should first try to consider doing a practice account. So, demo and real account goes hand in hand......

 

[David Train]

Before one can be a profession, one should first try to consider doing a practice account. So, demo and real account goes hand in hand......

Yes, in order to practive demo account will definetely help, but if you trade only demo account and increase even 10000% you balance without losses you can't call yourself a professional.

 

[Fxpipper]

The point of a demo account is not to trade with it forever, but just long enough for the new trader to understand how the market works, and come up with a strategy. I guess it can be chalked to "learning to ride a bike with a learning wheel" analogy and how long the rider would use it..

 

[David Train]

The point of a demo account is not to trade with it forever, but just long enough for the new trader to understand how the market works, and come up with a strategy. I guess it can be chalked to "learning to ride a bike with a learning wheel" analogy and how long the rider would use it..

You are right!
But some day you will have to remove this "learning wheel" or you will not be able to call yourself a bike rider

 

[Rambo35]

Before one can be a profession, one should first try to consider doing a practice account. So, demo and real account goes hand in hand......

I disagree. I never traded in a demo account and learned to trade in a mini-account.

 

[Fxpipper]

I guess that's up to the individual trader, they can go do the demo while learning the ropes or move on to micro account right away. The only advantage with the later option is the real trading environment..

 

[Emibluz]

Demo is useless for real traders, but of course people like you need them as it give them the right feeling. I know that with 'some feel that demo is useless' you referred to me as I think I am the biggest opponent of them and advice against using them.

Learn to trade in mini-account and if the thought of losing $500 in a mini-account frightens you then you should be not trading. What makes matters worse is if you think $500 is a large sum of money; then you are definitely in the wrong trade.

I do agree with you, but you know each an every trader has his/her ability when it comes to money. Some might feel $500 is a large sum to start trading, why others see it as nothing. The main point is that Demo is not entirely useless to real traders.

 

[Rambo35]

The only advantage with the later option is the real trading environment..

In my opinion this is the most significant difference which makes or breaks a trader.

 

[Fxpipper]

No arguments there but not every new trader who joins up is well versed with how the market works. What makes this even more apparetnt are the various "how can i make money easy in forex" threads..
While the real trading exp is invaluable, no arguments on that, a demo can help the new trader to work out how the market works, how to place orders, use indicators, etc.

 

[Rambo35]

No arguments there but not every new trader who joins up is well versed with how the market works. What makes this even more apparetnt are the various "how can i make money easy in forex" threads..
While the real trading exp is invaluable, no arguments on that, a demo can help the new trader to work out how the market works, how to place orders, use indicators, etc.

Fair enough, but I think if you need a demo to figure that out and can't afford to place a 0.01 lot order in a mini-account risking less than $1 then you should not trade at all.