Sorry, but this is a particularly dumb answer ( no offence) Until you've traded in real life, you can not begin to imagine the physcological difference. I'd actually be interested as a side bar, to find how many good "paper" traders have made the move across to being good real traders?
Also the fact that with no experience he expects to make money on year 1 is unrealistic. I'm lucky in that I was trained by City trading houses for 25 years, but otherwise? who on earth expects to be an Architect or Dentist with not training nor experience?
CT
I believe you are both partially right, and partially wrong, I too lost $25,000 over 8 years real trading, but it was like $4000 at a time, I was also demo trading every now and then during those 8 years and could not achieve consistent profits on the demo either, always lost in both.
After that, I spent the following 3 years on demo trading, further system evaluation and some premium training by veterans, and did manage to turn around my trading.
The first problem with small live accounts is the pressure to make money there and then (profits are too small to make a difference in your life, pay the bills, too small to withdraw), as far as psychology goes, there's no difference between demo and live when acc is large ($20,000+)
The problem with live trading, especially SB is you have liquidity problems and bad filling price at trading large.
when you are under extreme pressure you will lose, even on demo trading, try to win a forex competition spanning over one month, you risk fake money to win a real cash prize, you have to trade every trade and achieve max results within that month, I tried and I lost.
When trading demo without pressure, without trying to compete against others,
I can always have a winning month. This can be replicated with real money.
By the way, it was Alpari's competition, I started with $20,000 demo acc, went up to $35,000, then feared that someone else would win by making more, so I made stupid reckless trades while my normal market criteria were not there,
went up to $39,000 then blew it all in few days, and the winner of the competition HAD WON the real $5000 prize by a very similar figure, very close
to $39,000 if I remember right
