DEMO ACCOUNT vs LIVE ACCOUNT
Membre depuis Dec 11, 2015
posts 1487
Dec 28, 2015 at 10:57
ProTradersGroup posted:
It doesn't matter you trade demo or real but how your system works!
True. The problem is that some people aren't willing to let it work out of sheer anxiety and insecurity when it comes to trading with real money.
Dec 28, 2015 at 20:42
(édité Dec 28, 2015 at 20:56)
Jaco Ferreira,
your posting is very accurate and holds wisdom of being through different faces of trading. For new traders coming into the market they should practice patient and strict risk management. To go for making big money is of course a totally wrong approach. My suggestion is to keep a low risk profile on both individual trades and of the trading account as a whole.
I will try to give an example here. 0.33% risk per trade of the account and a maximum of 3 positions opened at the same time, that will be a total of 1% risk if all 3 positions are in place. By practising this method the trader will not see any big advancement or any big drawdowns as well. It also will allow some average down so to speak but within the 1% total risk of the account. To be right on the entry level of a single position is very hard, and by keeping the risk down on single positions will give the trader a chance to enter several times. This strategy however requires following the plan 100% and to never go above the 1% risk of the account rule.
your posting is very accurate and holds wisdom of being through different faces of trading. For new traders coming into the market they should practice patient and strict risk management. To go for making big money is of course a totally wrong approach. My suggestion is to keep a low risk profile on both individual trades and of the trading account as a whole.
I will try to give an example here. 0.33% risk per trade of the account and a maximum of 3 positions opened at the same time, that will be a total of 1% risk if all 3 positions are in place. By practising this method the trader will not see any big advancement or any big drawdowns as well. It also will allow some average down so to speak but within the 1% total risk of the account. To be right on the entry level of a single position is very hard, and by keeping the risk down on single positions will give the trader a chance to enter several times. This strategy however requires following the plan 100% and to never go above the 1% risk of the account rule.
" Lock in the profit and minimize the draw down "
Dec 31, 2015 at 09:00
Antonis94 posted:
Hello people,My name is Antonis and i am a new trader so please forgive me for this question,is it necessary and i mean like an obligation for a non experienced trader to open a demo account first and then a live one?
Hi Antonis, nope, you are under no obligation to first open a demo account and then later go onto a live account. However, and this is a big one, if you are completely new to trading, and you go directly to a live account, I can almost guarantee you with 100% certainty, that you will blow that account within the first week or two. And I think most experienced traders will agree to this in some form.
The problem is this, when you are completely new, you probably have not yet learned the basics of trading. By this I mean that you have not yet learned and tested things like reading and interpreting Price Action Movement, Risk and Money Management, Basic Candlestick Formations, Support and Resistance, Fibonacci, etc.
To add to this, it is complete suicide to trade live without a tested trading strategy. If you are a new trader, you probably will have no experience trading with EA's (Automated Trading), so I would assume that you are trading manually. It's almost like a soldier. The soldier must first go through training before he/she goes into battle. You need to learn how to react to market conditions based on your training, in order to cope with the emotional roller-coaster you will experience with live trading real money.
So to answer your question, first learn the basics with a demo account, and while doing so develop your own tested Trading Strategy and trading rules (when to enter and exit trades), before you attempt trading on a live account.
Hope this helps. Good luck with your trading career!
Cheers
Jaco
Keep it simple, be disciplined, get rich slowly and above all protect your equity!
Dec 31, 2015 at 09:28
No problem... Shout if you have any other questions. I'm no pro trader, but I paid my school fee's when it comes trading, and may be able to give you some advice... :)
Keep it simple, be disciplined, get rich slowly and above all protect your equity!
Membre depuis Dec 11, 2015
posts 1487
Dec 31, 2015 at 10:54
No, there's no obligation to open a demo account first. As a trader you are working for yourself, unless you are professionally employed by someone to do the same job - so you have no obligations whatsoever. Opening a demo account is simply basic common sense, nothing more, nothing less.
Dec 31, 2015 at 11:43
mlawson71 posted:OK then thank you for your response
No, there's no obligation to open a demo account first. As a trader you are working for yourself, unless you are professionally employed by someone to do the same job - so you have no obligations whatsoever. Opening a demo account is simply basic common sense, nothing more, nothing less.
Jan 11, 2016 at 08:13
mlawson71 posted:
No, there's no obligation to open a demo account first. As a trader you are working for yourself, unless you are professionally employed by someone to do the same job - so you have no obligations whatsoever. Opening a demo account is simply basic common sense, nothing more, nothing less.
Demo account is just an option, if you have enough money to risk it the you can open real account, but demo account is very much recommended , just for a getting a virtual market experience.
Membre depuis Oct 21, 2014
posts 19
Jan 13, 2016 at 08:13
Demo accounts are great for getting your feet wet as long as you can develop a trading plan and use the same MM that you would use in a live account (Which is extremely difficult once you start losing real $$, which is inevitable but still recovery and successful trading is possible). I've learned appropriate trading psychology in crucial in order to have longevity in this industry. Once you realize that you are your worst enemy, NOT YOUR BROKER, life is so much easier. Their job is to take your money... DUH. You're job is to make sure they are only able to skim off the top (trust me... the cream filling is WAY BETTER than the powered sugar topping ;-)). I definitely agree demo accounts when used properly are awesome! I still use mine for new trading strategies that need to be tested out before implementing them in my normal trading. Life is what you make it, so make the most of it.
Ciao 😎
Ciao 😎
There is no such thing as failure, just valuable experiences.
Jan 17, 2016 at 09:54
I couldn't agree more. Demo accounts are very necessary to be used as a learning and testing tool, but no amount of demo account trading can fully prepare you for the psychological pressure of dealing with real money. They can certainly help, boost your confidence, but you only fully train yourself on a live account.
Jan 17, 2016 at 21:06
(édité Jan 17, 2016 at 21:11)
naturallycurly82,
your remark about 'Once you realize that you are your worst enemy, NOT YOUR BROKER, life is so much easier'. It is very accurate in live trading. Trading is so much about our preparation and our own ability to cope with pressure and of course how we protect ourself in case our positions and account equity goes against us. To handle all this pressure is extremely hard to manage manually. I would say almost impossible. Why? Because we are emotional beings and in our self we are not robots. Better to hand over this to cBots and EAs and other robots to take over when it's needed, they can be totally emotionless and will carry out the instructions programmed by us. The RMMRobot.com site have some very interesting ideas on this subject.
your remark about 'Once you realize that you are your worst enemy, NOT YOUR BROKER, life is so much easier'. It is very accurate in live trading. Trading is so much about our preparation and our own ability to cope with pressure and of course how we protect ourself in case our positions and account equity goes against us. To handle all this pressure is extremely hard to manage manually. I would say almost impossible. Why? Because we are emotional beings and in our self we are not robots. Better to hand over this to cBots and EAs and other robots to take over when it's needed, they can be totally emotionless and will carry out the instructions programmed by us. The RMMRobot.com site have some very interesting ideas on this subject.
" Lock in the profit and minimize the draw down "
Membre depuis Sep 12, 2015
posts 1948
Jan 18, 2016 at 12:31
The markets are driven by humans,not by acting like a robot,That is why quants are always updating or scraping models they have spent months building,human emotion plays a huge part of trading=over reactions and under reactions,this is the moment for making money,models are built on past experiences of human behaviour in conditions of that time period,you can't build a program around human behaviour,it's a long way off.There are no short cuts to trading,it's learned behaviour over a long period.
"They mistook leverage with genius".
Jan 19, 2016 at 07:38
Quant modeling is extremely powerful (which is why most large asset management firms have quant divisions). While you're correct in saying it can't tell you the entire story for future market behavior, historical number crunching can and will tell you a story that you as a human trader will never see. Used in conjunction with fundamentals and strong money management, quant based strategies can lead to some very profitable opportunities.
Success is no accident. It is hard work, perseverance, learning, studying, sacrifice and most of all, love of what you are doing.
Jan 19, 2016 at 07:38
Something else to note - Professional grade quant software (like the one I use) allows you to create or reconfigure models in a matter of hours, not months. The key to using it properly and profitably is a sound understanding of statistics (along with experience as a trader, as you mentioned).
Success is no accident. It is hard work, perseverance, learning, studying, sacrifice and most of all, love of what you are doing.
Jan 24, 2016 at 07:51
Since demo simply copies the informational output of the live market, technically there are buyers and sellers, and unless the broker's up to shenanigans positions in the demo should have the same result as in the live account, apart from the emotional effect of trading with real money .
