Demo Account vs Live

advfntrader

advfntrader

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every time I trade using a demo account I consistently win. I am picking the right trades and letting them run long enough.

however, when it comes to real accounts I keep losing. this maybe becasue I don't have the large margin thats in the demo account, but it also appears to be psychological as its MY money so more is on the line !

I am questioning the usefulness of demo accounts as on paper it sounds a good idea but in real life its not as easy.

has anyone found a way of getting rid of the emotions and trading live as if it was a demo ?!?
:cry:
 
advfntrader,

This is fairly common. Most traders at my firm make huge money consistently on the sim and then fail to make any money once they go live.

I find demo accounts only useful for trying out new strategies to see if there is an edge there.

Once you find that there is, you need to go live ASAP albeit at a very low stake to make the transition and begin to work on trader psychology.

It is my opinion that over 80% of a traders edge is their psychology and 20% is their strategy. If this wasn't the case there would be far more successful traders out there as there are profitable systems and strategies offered left right and centre.
 
advfntrader said:
every time I trade using a demo account I consistently win. I am picking the right trades and letting them run long enough.

however, when it comes to real accounts I keep losing. this maybe becasue I don't have the large margin thats in the demo account, but it also appears to be psychological as its MY money !

I am questioning the usefulness of demo accounts as on paper it sounds a good idea but in real life its not as easy.

:cry:
Click to expand...

Hey dude,

Come on mate, you know better than this and you've been around here long enough and now blown two accounts.

It's time to wise up a little mate.

The money you should use in a demo should mirror that of what you intend to use for real, otherwise there is NO real test of your system and can find that a few simple drawdowns wipe you out.

As for the mental part of it, thats something you have to figure out yourself.
Although you could try this:

Put into your account and mentally earmark the total loss of that money. See it as fun and learning, if you make from it, it's purely bonus and remember to withdraw a certain percentage of the winnings always as payment to yourself for the work that you have done, do this regualarly, ie, every 20 trades.

Other than that, I would recommend you paper trade for AT LEAST for 6 months, this will help you with your disicpline. I say this to you due to blowing two accounts and risking your marriage within a very short time period.
 
I will be going live again with a small amount next week to see how I get on. its the only way I feel as the demo just doesn't come close to what its really like to trade.

my main problem has been letting trades run to get more profit. I always "bottle it" and close out too early even though I would have been right !!! its the opposite for losses, I don't cut early enough and this results in eventual wipeout
 
advfntrader said:
my main problem has been letting trades run to get more profit. I always "bottle it" and close out too early even though I would have been right !!! its the opposite for losses, I don't cut early enough and this results in eventual wipeout
Click to expand...

Don't be afraid to give back profits when it is the houses money.

Also remember that you have to aim for a certain profit to compensate yourself for a given risk.

I, personally, would never take a trade that I didn't think I was going to get less than 50 pips/ticks off no matter how sure a thing. That is because I get in when I feel I cannot lose and as a result of this have a slightly larger stop than those that enter AT levels or WHEN the order flow dictates etc
 
advfntrader said:
I will be going live again with a small amount next week to see how I get on. its the only way I feel as the demo just doesn't come close to what its really like to trade.

my main problem has been letting trades run to get more profit. I always "bottle it" and close out too early even though I would have been right !!! its the opposite for losses, I don't cut early enough and this results in eventual wipeout
Click to expand...

There is no secret other than to keep at it. If you give up every time you have a string of losses you will never move forward. This does not mean trading recklessly, but you need to eliminate fear and hesitation, they are your worst enemies. Also, tighten your stoploss policy and never move a stop unless it is to reduce risk.

Treat your losses as the price you pay to become proficient. If you treat a loss as a failure or a mistake or incompetence you will negatively affect your psyche and impair progress.

Good trading to you.

N.B: Ignore anyone that asks you what timeframe you are trading. :rolleyes:
 
advfntrader said:
I will be going live again with a small amount next week to see how I get on. its the only way I feel as the demo just doesn't come close to what its really like to trade.

my main problem has been letting trades run to get more profit. I always "bottle it" and close out too early even though I would have been right !!! its the opposite for losses, I don't cut early enough and this results in eventual wipeout
Click to expand...


Lol,

I wish you good luck mate.

If I couldn't be bothered to fight you, this is what I would say and just let you get on with it knowing (as most do) that you will go on to blow another account.

BUT.

I will say this to you for yourself to answer:

Why the urgency to get back into the market???? (You feel you need to have money on the line, money or no money, the trade should be the same)

Do you feel you have to have a trade????? ( I reckon your borderline gambling)

Do you want to desperately get your money back???? (you'll say no, but I think yes)


My idea is that if one cannot papertrade because they need to have money on the line, this is the very mental part you WONT be able to deal with live. A few losses and you'll panic its happening again, or, you'll carry on into oblivion using a system or yourself that doesn't work until your money has left you.

I speak for myself here:

Every trade I make, whether it has money on it or I called it live with a friend, I will play with a worked out sum of money and I will play the trade as if it where real, money or no money. So, my results are extremely similar if not exact, of course, they would be, because every trade I take is played with the same feeling and emotions. In short, I stick to my plan and attempt to get as many points as I can without loosing my shirt.
Like I said, money or no money, big or small, the trades always remain the same.


Trader Dante:
It would be very interesting to here what you think of my above statement, please feel free to comment.
 
Lee Shepherd said:
Lol,

I wish you good luck mate.

If I couldn't be bothered to fight you, this is what I would say and just let you get on with it knowing (as most do) that you will go on to blow another account.

BUT.

I will say this to you for yourself to answer:

Why the urgency to get back into the market???? (You feel you need to have money on the line, money or no money, the trade should be the same)

Do you feel you have to have a trade????? ( I reckon your borderline gambling)

Do you want to desperately get your money back???? (you'll say no, but I think yes)


My idea is that if one cannot papertrade because they need to have money on the line, this is the very mental part you WONT be able to deal with live. A few losses and you'll panic its happening again, or, you'll carry on into oblivion using a system or yourself that doesn't work until your money has left you.

I speak for myself here:

Every trade I make, whether it has money on it or I called it live with a friend, I will play with a worked out sum of money and I will play the trade as if it where real, money or no money. So, my results are extremely similar if not exact, of course, they would be, because every trade I take is played with the same feeling and emotions. In short, I stick to my plan and attempt to get as many points as I can without loosing my shirt.
Like I said, money or no money, big or small, the trades always remain the same.


Trader Dante:
It would be very interesting to here what you think of my above statement, please feel free to comment.
Click to expand...


Hey Lee,

I understand what you are saying. The trainers here feel much the same way as you - treat the sim / paper trading environment as REAL MONEY and the trades will remain the same. I argued with them and said that this is, in practice, very hard to do and find there is a big difference.

Tom
 
Lee,

Its not gambling problem, I am fairly certain of this as I don't gamble on other things in life.
It is now a strong desire to get my losses back. I am much more knowledgable now that I was 1 year ago and I feel I am on the road to profit. I don't want to quit now and turn back !

you get the same responses from people, try again, never give up etc. etc. HOWEVER, what if I never turn a profit ? when is the time to call it a day !!?
 
advfntrader said:
I will be going live again with a small amount next week to see how I get on. its the only way I feel as the demo just doesn't come close to what its really like to trade.

my main problem has been letting trades run to get more profit. I always "bottle it" and close out too early even though I would have been right !!! its the opposite for losses, I don't cut early enough and this results in eventual wipeout
Click to expand...


Hi there, from what i hear i think you still haven't dealt with your original loss in your mind. The way to do this is not to go straight back into the live market as you're intending, but to do all the reading you can do on trading and it's psychology, properly test a system for a minimum of 3 months ideally, and then try again.

I believe that trading next week will result in you losing more money, and in you achieving what your subconscious and your partner want, which is for you to stop trading. I say this because i have had similar experiences. When i was trading for a firm in London I hadn't had a holiday for quite a long time and wasn't having the best of times in the market. My subconscious was telling me to take a break, i ignored this and it culminated in me having my worst trading day ever, i then took my break! I Could've saved a lot of money if i had just listened to my own subconscious thoughts.
 
advfntrader said:
Lee,

Its not gambling problem, I am fairly certain of this as I don't gamble on other things in life.
It is now a strong desire to get my losses back. I am much more knowledgable now that I was 1 year ago and I feel I am on the road to profit. I don't want to quit now and turn back !

you get the same responses from people, try again, never give up etc. etc. HOWEVER, what if I never turn a profit ? when is the time to call it a day !!?
Click to expand...


Because time is limited in life, one should give something up when they exhausted every avenue or it is causing heartache or pain beyond which they can handle.

No one wants to have a nervous breakdown or waste years trying to achieve something they will never be able to do.

I think the question SHOULD be:

When do I start???

My answer to this is not yet.

Look at what you have just written:


"It is now a strong desire to get my losses back"

This is simialr to chasing losses, its only been around 2 weeks since you blew your second account and risked your relationship with your wife. Why the urgency, well, because what you just said.


I personally am a great believer in writing things down to look at later, if you look at this post later, dont know when (hours, days weeks, years) you will see the fault in what you have just said and the dangers it will bring.


Take a look back over my last post to you.

Play with money you can comfortably afford to lose, in other owrds, YOU DONT MIND LOSING IT, or in your case, DONT MIND LOSING MORE MONEY.

Dude, on a serious note, as if my words above are not, but, take a read through ALL those posts that people put on your horror story of your first account blowing and how you almost lost your marriage, you've now done your second account and you want to get back in so you can, "get my losses back".

Your money, your choice.

I've nothing else to say here.

Good Luck mate.
 
advfntrader said:
you get the same responses from people, try again, never give up etc. etc. HOWEVER, what if I never turn a profit ? when is the time to call it a day !!?
Click to expand...

You have to analyse your trading and be honest with yourself and try to work out where you are going wrong. The answers to these questions should give you a good idea of whether it is time to give up.

E.g. If you are being patient and disciplined, following a strategy with clearly defined entries and exits and are using good risk management and you are still not making money then there is something wrong with the STRATEGY. In which case you should not give up but look at either refining the strategy or looking for a new one.

If on the other hand you have a profitable system but you cannot follow it because you are to fearful or greedy, then you must realise, this is harder to correct and the change needs to come from within. Some people can change - others can't. There might come a time when you realise that you cannot become the person that you need to be in order to win in this game. And that is the time to throw in the towel.

But don't be dishearted by how LONG it takes.

It can take as quick as three months or as long as ten years to get profitable.
 
advfntrader said:
you get the same responses from people, try again, never give up etc. etc. HOWEVER, what if I never turn a profit ? when is the time to call it a day !!?
Click to expand...

Ah! A fascinating and interesting question! You are right, you have to ask yourself this question and answer it honestly - Are you suited to this profession and how much are you prepared to spend to find out?

This is a question that only you can answer.
 
what if i never turn a profit......

the strategy should tell you that. what is the expected win over say 20 trades. how many times do you expct to get stopped out. is it likely that you will have a 20 trade losing run? once the strategy is sorted and practised on the demo so it become a habit one goes live.

errors are emotional. to trade you have to have the emotions of a computer ie none. which means you have to pretend to be dead. :)

a good book for emotions is mark douglas 'trading the zone'
 
advfntrader,
Only you really know if you are re entering trading too early, and maybe only hindsight will eventually tell you this.
Lee is right about writing things down, I keep a trading log, and write down details of how I felt at the time, and other details, then review it at the end of the month.
What I found helped me when I was in a similar situation was that decided I didn't have to trade, so would wait until the market conditions were absolutely right, and before a trade I always try to remember I don't have to trade. Clearly if you are trading professionally you can't take this approach, but you are just trying to get your confidence back.
One other method that you could try is to stop trading once you have made a profit till the end of the month. I will probably get savaged for making this comment, as you trade the same regardless of profits and losses, but it would mean you would have to stay on the sidelines with a profit for the rest of the month, hopefully re-inforcing your discipline and confidence.

Good Luck

Graham
 
gfrost said:
One other method that you could try is to stop trading once you have made a profit till the end of the month. I will probably get savaged for making this comment, as you trade the same regardless of profits and losses, but it would mean you would have to stay on the sidelines with a profit for the rest of the month, hopefully re-inforcing your discipline and confidence.

Good Luck

Graham
Click to expand...

I agree with the idea of placing strict trading limits, however your statement implies that a person should keep trading until they have made a profit and then stop. This is dangerous. I think a cap should be put on the number of trades per day regardless of profit or loss.
 
trader_dante said:
advfntrader,

This is fairly common. Most traders at my firm make huge money consistently on the sim and then fail to make any money once they go live.

I find demo accounts only useful for trying out new strategies to see if there is an edge there.

Once you find that there is, you need to go live ASAP albeit at a very low stake to make the transition and begin to work on trader psychology.

It is my opinion that over 80% of a traders edge is their psychology and 20% is their strategy. If this wasn't the case there would be far more successful traders out there as there are profitable systems and strategies offered left right and centre.
Click to expand...

Thats some sound piece of acvice.
 
I cannot over emphasize the importance of psychology in this game. You must train your mind to trust your methods. You must know your setups like the back of your hand. Study every detail of the trade and take meticulous notes: How it played out how it could have played out. Hypothesize on different exit strategies backtest those strategies throughout every one of your trades and compare the would-be bottom line to the your actual bottom line. Test every possible outcome. You must prove to yourself that the steps you are taking during a trade is the most profitable way of doing business. Once you've become very confident that every detail of your trade is covered then you can begin the process of engraving your techniques into your mind. Replay every trade over and over at the end of the day and on weekends if you're dedicated. Develop your instinct for the trade. Focus on how much money you're losing by not following your rules. Develop a fear of straying from the rules. Realize that the market is a treacherous place that no man can survive without survival strategies. Train yourself to use your emotions to your benefit.
 
lesgofishn said:
Study every detail of the trade and take meticulous notes: How it played out how it could have played out....Hypothesize on different exit strategies backtest those strategies throughout every one of your trades and compare the would-be bottom line to the your actual bottom line. Test every possible outcome...Replay every trade over and over at the end of the day and on weekends if you're dedicated.
Click to expand...

Great post...I do ALL these things.
 
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