Why you shouldn't demo trade

This is a discussion on Why you shouldn't demo trade within the General Trading Chat forums, part of the Reception category; Originally Posted by Lee Shepherd Morning wallstreetking, Back testing over 3 years is simply too long. Markets and behaviour change ...

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Old Jan 24, 2018, 8:47am   #97
 
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Everything is supply & demand

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Originally Posted by Lee Shepherd View Post
Morning wallstreetking,

Back testing over 3 years is simply too long. Markets and behaviour change over this period of time and is akin to getting in to a trend at the end before the bend. Hence why so many still lose money and on a regular basis. Also, the major problem with backtesting is that curve fitting is always prevalent.


The law of supply and demand never changes and its effect on a market can (and should!) be studied and observed as far back as there is available data for your chosen instrument. Markets go through phases, but the fundamental principle of supply and demand never changes. Once you understand how the law of supply and demand operates in your chosen instrument, you can apply the principle to any instrument your heart desires.
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Old Jan 24, 2018, 9:08am   #98
 
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Originally Posted by new_trader View Post


The law of supply and demand never changes and its effect on a market can (and should!) be studied and observed as far back as there is available data for your chosen instrument. Markets go through phases, but the fundamental principle of supply and demand never changes. Once you understand how the law of supply and demand operates in your chosen instrument, you can apply the principle to any instrument your heart desires.
Hey new_trader,

As a long standing member (since you joined in 2006), I will not argue with your methodology or point of view. I refuse to go head to head with someone who is a full time successful and profitable trader. I'm here to help the new ones look to succeed only - whichever path they choose or who they listen to.

My only advice to new comers is to listen to those with proven track records. The rest can be dismissed.

Lee
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Old Jan 28, 2018, 5:09pm   #99
 
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I've edited your post with numbers corresponding to my answers for ease of reading for others.

1) Where I come from a professional is called a professional because they are just that. Someone is not called a professional just because they get paid to do it and you are using the term loosely which is disrespectful of those that are professionals.
Example: An amateur (see its even in the title) actor gets a paid job as an extra or even a one line pop up scene - that does not entitle them to put on their CV professional, and then there's the argument of how long that title stands for. If that's the case then I am a professional school boy, paper boy and kitchen porter.

2) I will not comment on a generalisation of people here as that would be presumptuous of me to do so. It's also inappropriate for you to state this as not all traders on here are 'more like interns'.

3) I cannot compare as I simply do not know the answer to this. However, I would never dare compare myself in anyway to that of a professional trader. As is stands I am a retail trader and for the benefits of HMRC (Tax revenue in UK), I am just a gambler. But again, this does not stop me from hanging around professional traders (for which I will be doing shortly and am due out to the clubs till the early morning - it's just gone 6pm here). Its good to note though, as much as I do not compare myself against the professionals, I do actually earn more than some of them. This still does not entitle me to the title professional. Although I do kick some f**king good trades.

4) You cannot 'reset' a real account - you have to put in more hard earned cash and by doing so, changes and hardens the person each time they do this. They will concentrate more, or in some cases not. I know of so many people trying for years and still burning money or 'making' (term used lightly like a gambler 'makes' money from the 1 time spin on a Friday night) insignificant money. You succeed or you go home. This ain't brain surgery.

5) See my other posts relating to this.

Lee
Some very convoluted responses.

The bottom line is pretty simple. Prop firms want interns to make money on demo first.

Then they put traders on live accounts if they do ok on demo.

Then they put traders back to demo if they slip up live.

Telling people to "just trade with real money" when they aren't ready is irresponsible.

OF COURSE trading live money is different... But intern doctors practice in SIM too - with a more experienced doctor looking over their shoulder having a say in when they are ready when to go it alone.

Demo. When ready, go live. If that goes badly, go back to demo.

Going from demo to live and back makes a lot more sense than your "never demo" mantra - which basically comes from your personal theory, not from any firm on planet earth.
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Old Jan 28, 2018, 5:54pm   #100
 
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Originally Posted by new_trader View Post


The law of supply and demand never changes and its effect on a market can (and should!) be studied and observed as far back as there is available data for your chosen instrument. Markets go through phases, but the fundamental principle of supply and demand never changes. Once you understand how the law of supply and demand operates in your chosen instrument, you can apply the principle to any instrument your heart desires.
It's a very good principal if you are a long term trader or a fund manager, in theory. However, the average trader doesn't have deep pockets or thinks long term.

There are "Thousands", if not more, stocks to trade. Most traders view trading as a psychological game; I think this market is going up. Never mind that the market is in the ""BEAR" mode. The trader believes the "BULLS" are going to take over the market; that's "psychology" in play.

Me? I'm in it for the short haul. Get the most money possible in the shortest time. What the world is doing that effects the markets doesn't get that much attention from me. My indicators give me the "Short Hand" version of what is going on in the markets.

IE: At the end of a down trend the Bears try to keep control, or the Bulls try to take control. That's a 123 up pattern in play. That's when I get in the game.
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Old Jan 28, 2018, 6:07pm   #101
 
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Originally Posted by new_trader View Post


The law of supply and demand never changes and its effect on a market can (and should!) be studied and observed as far back as there is available data for your chosen instrument. Markets go through phases, but the fundamental principle of supply and demand never changes. Once you understand how the law of supply and demand operates in your chosen instrument, you can apply the principle to any instrument your heart desires.
Stocks have finite supply (the float). Even so - that rarely impacts price. There's always stocks that have a supply problem at any specific point in time but supply never impacts all stocks.

So yes, some stocks have supply issues. Not all.

Futures have infinite supply. How can understanding supply and demand in a stock (finite supply), help you with supply and demand in a futures market(infinite supply)?

Wide sweeping statements like yours should be explained, lest they be passed off as some twot trying to sound clever like...
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Old Jan 28, 2018, 6:49pm   #102
 
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Everything is supply & demand

Yes, thatís right. The law of supply & demand is always at work, from small daily movements to weekly, monthly and yearly movements.
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Old Jan 29, 2018, 11:19am   #103
 
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Yes, thatís right. The law of supply & demand is always at work, from small daily movements to weekly, monthly and yearly movements.
It is speculation that makes the markets move.

The law of supply and demand is an economics term that does not in any way explain or pre-empt moves in the market.

Speculation on the other hand does an outstanding job.
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Old Jan 31, 2018, 8:00am   #104
 
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I don't agree with the point that demo account is needless. One the one hand, it's useful because when you open a real account right away, it will lead to the money drain. On the other hand, to trade on a demo account for 3 years, as it's suggested here, is silly. It's better to use a cent account instead, to start trading with real money.
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