Too successful on demo?

Hi

Have just started trading on the metatrader demo the last few days on a £5000 capital base. My first day proft was £801.23. My second day profit was £472.87 and today i made a whopping £2012.03 profit.

These are great numbers but i am suspicious. If it is so easy, why do so many people lose money? How realistic is the demo account? What have other newbie traders experience been regarding early trades?

Beria said:

Hi

Have just started trading on the metatrader demo the last few days on a £5000 capital base. My first day proft was £801.23. My second day profit was £472.87 and today i made a whopping £2012.03 profit.

These are great numbers but i am suspicious. If it is so easy, why do so many people lose money? How realistic is the demo account? What have other newbie traders experience been regarding early trades?

Click to expand...

The differences between trading a demo account and a live account are huge. One of the essential ingredients of trading a live account is money management and controlling risk. Something which is not a consideration when trading in demo mode.

One of the hardest things to do, when trading live, is to leave your emotions away from your trading environment. In the early stages of trading live, many people (including myself) have found this one of the most difficult challenges.

My advice would be to start with a small size live account and sample the experience of doing it for real.

I tripled my account in 3 days on the demo using 1:50; when it I went live i sure im not trippling my account that quick

on demon there is no fear of losing money but on live its a whole different story seeing your trade going negative even if its tempory can be nerve wrecking unlike demo

As stated, the biggest danger in the real world is yourself.

But also keep in mind things like execution times. Demo accounts will usually execute trades immediatly, whereas in the real world there may be seconds of delay with leading slippage.

Beria said:

Hi

Have just started trading on the metatrader demo the last few days on a £5000 capital base. My first day proft was £801.23. My second day profit was £472.87 and today i made a whopping £2012.03 profit.

These are great numbers but i am suspicious. If it is so easy, why do so many people lose money? How realistic is the demo account? What have other newbie traders experience been regarding early trades?

Click to expand...

How many losing trades did you have on those days? It is easy to keep entering and entering until you fluke a profit when the money is not real.

Is this the top? I will try a short...nope...that wasn't the top...I'll try again....and again...and again...ahh...this is the top...now just hold until it hits bottom....look I made £801.23 profit...simples

We can't make any comment because it doesn't matter how much you make but HOW you make it. How many trades? How large was the leverage? Which market(s)? Entry strategy? Tell us more and we will tell whether we've found a trading genius

What they all said!

I take it you're with Alpari? Deposit £100 and use 0.01 lots. Learn about money management and risk management.

Hi

Thanks for the responces. Here is a details breakdown of my results so far:

2009.06.24 18:23 /buy /4.00 /price /934.15/ 2009.06.24/ 18:25/ close prce 934.60 /profit 109.44

2009.06.24 19:30 /sell /4.00 /933.70 / 2009.06.24 /20:56 /930.85/profit 694.45

2009.06.26 11:06/ buy /4.00 944.85 /2009.06.26 /11:44 /945.10/profit 60.62

2009.06.26 11:47 sell 4.00 xauusd 945.10 2009.06.26 13:24 945.05 profit 12.14

2009.06.26 13:25 buy 4.00 xauusd 944.95 2009.06.26 13:32 946.60 profit 400.65

2009.06.29 12:17 sell 4.00 gbpusd 1.65380 2009.06.29 12:40 1.65290 profit 217.80

2009.06.29 12:16 sell 4.00 gbpusd 1.65428 2009.06.29 15:38 1.65307 profit 292.79

2009.06.29 12:41 sell 4.00 gbpusd 1.65201 2009.06.29 15:52 1.65149 profit 125.95

2009.06.29 12:51 buy 4.00 gbpusd 1.65303 2009.06.29 12:58 1.65421 profit 285.33

2009.06.29 12:59 sell 4.00 gbpusd 1.65431 2009.06.29 15:39 1.65308/ profit 297.63

2009.06.29 13:26 buy 4.00 gbpusd 1.65498 2009.06.29 13:27 1.65527 profit 70.08

2009.06.29 13:31 sell 4.00 gbpusd 1.65638 2009.06.29 15:03 1.65363 /profit 665.20

Total profits so far: £3 233.83

Have made no losses on my trades the far, have omited the first two as i was only playing profits on these were 88 and 87 pense respectively.

My system has been short-term and highly risky - i do not do stop loss. Have put considerable margin - 4 for most of my trades.

Have analyised the charts, attempting to buy if i think its going up and shorting if i think its going down. Some have been more successful than others, but generally i have been proven right so far. Prepared to wait for my system to pay off, which means i can look at major losses for a while.

I think that i could pursue on the real version a risky strategy but i need to start thinking of risk management first. Any tips?

regards

Beria

Further information:

Total Trades: 14 Short Positions (won %): 8 (100.00%) Long Positions (won %): 6 (100.00%)
Profit Trades (% of total): 14 (100.00%) Loss trades (% of total): 0 (0.00%)

Largest profit trade: 694.45
Average profit trade: 230.99
Maximum consecutive wins ($): 14 (3 233.83)
Average consecutive wins: 14 consecutive losses: 0

regards

Either learn to use stops and trade with them or get a small account with money you don't care about, use low leverage and do what you're doing now. Either you'll blow it all or you'll make a great return on your account.

If i used 300 intial start-up capital, what kind of leverage should i use 0.5%?

What does that mean? Depends how much risk you're willing to take on and what sort of style. I'm using 12.5% margin on trades and that's pretty risk averse.

Beria said:

Hi

Have just started trading on the metatrader demo the last few days on a £5000 capital base. My first day proft was £801.23. My second day profit was £472.87 and today i made a whopping £2012.03 profit.

These are great numbers but i am suspicious. If it is so easy, why do so many people lose money? How realistic is the demo account? What have other newbie traders experience been regarding early trades?

Click to expand...

Hehe Newbie gains. This has a lot to do with the fact that as newbie you do not know what to expect. Your mind is clear. The more you learn the more your mind becomes "dirty" with all techniques, theories, indicators etc. Eventually you come to a point where you can separate all those unnecessary things that you learned, leaving what's most important.

I like the fact that you are aware of some kind of "problem" as those gains came very easily. On LIVE account emotions could kill you.

Learn, practice, see what works for you.

Ha...ha.... never use demo account... trade with real money but in micro account where you spend only one cent per pip. That's the key...don't destroy your mentality with free account.

Beria said:

Have analyised the charts, attempting to buy if i think its going up and shorting if i think its going down. Some have been more successful than others, but generally i have been proven right so far. Prepared to wait for my system to pay off, which means i can look at major losses for a while.

I think that i could pursue on the real version a risky strategy but i need to start thinking of risk management first. Any tips?

regards

Beria

Click to expand...

Yes, use a stop loss or you will be broke in 6 months or less.

Masquerade said:

What does that mean? Depends how much risk you're willing to take on and what sort of style. I'm using 12.5% margin on trades and that's pretty risk averse.

Click to expand...

C'mon, he's only a beginner and you have to explain a bit.

As masquerade said, it all depends on how much risk you want to take. But the following consideration should demonstrate the point:

If you lose 1%, you need to make 2% of the new capital to recover;
If you lose 5%, you need 6% to recover;
If you lose 10%, you need 11% to recover;
If you lose 15%, you need 18% to recover;
If you lose 20%, you need 25% to recover;
If you lose 50%, you need 200% to recover.

The point is, the largest % you lose, the harder you can recover. Therefore, it depends on how confidant you are in your ability to recover after you lose. Suppose your risk:reward ratio is 1:3, then you may well risk as high as 10-20% because one next good trade can recover immediately.

GCC said:

C'mon, he's only a beginner and you have to explain a bit.

As masquerade said, it all depends on how much risk you want to take. But the following consideration should demonstrate the point:

If you lose 1%, you need to make 2% of the new capital to recover;
If you lose 5%, you need 6% to recover;
If you lose 10%, you need 11% to recover;
If you lose 15%, you need 18% to recover;
If you lose 20%, you need 25% to recover;
If you lose 50%, you need 200% to recover.

The point is, the largest % you lose, the harder you can recover. Therefore, it depends on how confidant you are in your ability to recover after you lose. Suppose your risk:reward ratio is 1:3 and you don't think you will lose consecutively, then you may well risk as high as 10-20% because one next good trade can recover immediately.

Click to expand...

I'm always entertained by people who talk simples....

Lose 50% and you need 200% to recover...if you are trading the ES via DMA and you have $10k in your account and lose 50%, you don't have the margin to trade, end of story! THIS is reality...no magical numbers... The REAL COST of trading should be considered not theoretical figures..