In the casual world of free demo accounts - many young traders find they are able to garner impressive profits without a significant amount of effort. It almost seems too good to be true. But transferring this success from a demo account to a real account is far less common. Why is this?
Why demo performance is often better than live performance?
- Thread starter Rambo35
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Yeah...Smtimes I'm just thinking its all about the psychology... It's like when u r just in a class you are doin good and at the test - u fail. Maybe its because of pressure..I hope u see my point
In demo your real money is not involved so you will not attach your emotion to it so even when you lose you are not at loss. But when it comes to live trading and you need to deposit money your emotion set in,and that fear and greed for profit will start affecting your trading output.
trading psychology is a big factor, people tend to do some risky things in demo coz the money aint real and the fear of losing is not there, another thing i guess the demo is quiet different from live, in terms of execution, and slippage, and other things that the crazy live environment has to offer, lol. but demo has its uses, i still trade my hotforex demo account. at times i trade it just for the sake or releasing some stress.
The psychological aspect might be true, but there are other factors at play. In a demo account, the fund is often available to use and often times we read newbies making high profit on a demo account. If they have same capital on a live account, there is a possibility that they can replicate same success.
Another factor is the Demo execution. Some demo account platform are nothing compared to the real market execution, and this is why you may not experience slippages, freezing, or even requote. This things are present in a real account and can affect how you trade.
Another factor is the Demo execution. Some demo account platform are nothing compared to the real market execution, and this is why you may not experience slippages, freezing, or even requote. This things are present in a real account and can affect how you trade.
Some things I know of two types of accounts are
The first fact is that the market does not care and never knew my mercerfx account, whether it's live or demo account, do my balance increased or decreased. The market will remain that way, up and down, trending and sideways. loss condition may be due to the way we were mistaken in addressing market conditions, it could be perhaps i am less objective and try to control the market with excessive predictions.
The second fact is that when my trading in a live account is not focus on the trading process, but more focused on the amount of profit or loss that has been and will be obtained. Although i have made a trading plan and implement strategies and money management is exactly the same as when in the demo account, but i do not always do what i should do. The risk that i set will greatly influence my emotions. i feel unprepared when the funds of mine suddenly disappear quickly. People's behavior change when dealing with real money. As in my mercerfx demo account i can discipline may run a trading plan, but turn plunge with real money, you are so emotional and always intervene in your trading position. You tend to ignore the trading plan until the trading process so chaotic. That's the reality, especially if it is your first time you open a live account and trading with you allocate funds to trade forex or funds that 'ready for lost'.
The first fact is that the market does not care and never knew my mercerfx account, whether it's live or demo account, do my balance increased or decreased. The market will remain that way, up and down, trending and sideways. loss condition may be due to the way we were mistaken in addressing market conditions, it could be perhaps i am less objective and try to control the market with excessive predictions.
The second fact is that when my trading in a live account is not focus on the trading process, but more focused on the amount of profit or loss that has been and will be obtained. Although i have made a trading plan and implement strategies and money management is exactly the same as when in the demo account, but i do not always do what i should do. The risk that i set will greatly influence my emotions. i feel unprepared when the funds of mine suddenly disappear quickly. People's behavior change when dealing with real money. As in my mercerfx demo account i can discipline may run a trading plan, but turn plunge with real money, you are so emotional and always intervene in your trading position. You tend to ignore the trading plan until the trading process so chaotic. That's the reality, especially if it is your first time you open a live account and trading with you allocate funds to trade forex or funds that 'ready for lost'.
It's obvious.. there's no any fear in Demo. You can trade like a million and earn even more but your mind already knows it's just fake currency so there's no fear neither any joy. that's why your performance is much better
demo trades are alyways filled at the other end, while real experience can be a little different, anyone ever seen slippage on a demo account? 
It always nervousness is the prime factor as it is been said in this thread. i would like add another which is virtualness. As future pilots do practice in flight simulator which counts as many as possible factors but still they cannot simulate actual external factors. Similarly demo has considered as many possible factors but actual scenario cannot be simulated.
yeah some treat demo as nothing, and get all hyped and reckless on live., thats a classic and it can happen to any of us.
Demo's should be primarily used to develop strategies, to find out how the market works, to learn the ropes, that's about it. It does not reflect live trading conditions accurately and more than a few brokers demo accounts are really one for the books, smh.
A trader is better off going live with a small seed dep, rather than depend on demo acc for trading exp..
A trader is better off going live with a small seed dep, rather than depend on demo acc for trading exp..
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