Great success with MT4 simulation/demo account

[TraderMT4]

Hi all,

I am very new to trading and have only recently gotten into trading in the last 3-4 months, during this time I have taken a 3 week online foundation course and an 'ultimate' course as well.
During these courses i have been introduced to using a demo account, and i have been using it everyday for about a month and a half now.
I have been placing small trades that range from 0.10 - 1.00 in size on mostly the major forex currencies including EURUSD, GBPUSD, EURJPY and USDCHF as well as Crude Oil.
I have been waking up at 6am and looking through the news, forums, charts and whatever i can get my hands on then placing my trades for the day on what i think.
I have been getting great success and it almost seems too good to be true, I am well in profit after a month.

Can this performance really come through and exist on the live account too? Can anyone with experience chip in?

Cheers

 

[Forexmospherian]

Hi TraderMT4

Before answering in more detail - a few questions to ask you first -

1 You say you have only been trading 3 -4 months - How long do you think it will take for you to be good on a continual basis on a live account ??

2. How many trades have you taken on your demo account in last 6 weeks - and what is the main time frame you are working off ?

3. How much did your online course and ultimate course cost you ?

I will then be able to answer your main question you have asked in more detail

Regards

F

 

[TraderMT4]

Hi TraderMT4

Before answering in more detail - a few questions to ask you first -

1 You say you have only been trading 3 -4 months - How long do you think it will take for you to be good on a continual basis on a live account ??

2. How many trades have you taken on your demo account in last 6 weeks - and what is the main time frame you are working off ?

3. How much did your online course and ultimate course cost you ?

I will then be able to answer your main question you have asked in more detail

Regards

F

Thank you for your reply Forexmospherian.

1. From using the demo account I would guess 1-2 months, starting with very small trades to minimise total loss.

2. Over 200, on average I place and close 10 trades a day and they rarely get the chance to get a swap charge as they are only placed for a day maximum usually. The time frames I focus on when I decide to place a trade are first D1 to get an overview of the overall bigger trend if i do not already know it. But usually i work with M15, M30 and H1 time frames.

3. Foundation was a special offer for £30 from one of these voucher companies, on their site however it is going for £450. I thought the way the teach was excellent so I went for the ultimate course that was usually £2.5k but they had an offer on for £600, so i paid £600 for the ultimate.

Cheers

 

[Pat494]

On reading your account of your actions so far,

1. It may just be beginners luck.

2.If it isn't, you might be one of the very few to keep profitable from day one and some sort of a genius.

3. This is a wind-up.

There is a difference between demo and real money trading. The fear of losing factor is negligeable in the demo trading.

Anyway let's see what Foxy has to say as he is a very experienced trader.

 

[TraderMT4]

On reading your account of your actions so far,

1. It may just be beginners luck.

2.If it isn't, you might be one of the very few to keep profitable from day one and some sort of a genius.

3. This is a wind-up.

There is a difference between demo and real money trading. The fear of losing factor is negligeable in the demo trading.

Anyway let's see what Foxy has to say as he is a very experienced trader.

I do agree with you that there is a certain degree of negligence when it comes to the demo account, but never have I placed unrealistic trades. I set SL's and TP's where i feel they are necessary and never have I let myself loose more than what I can afford in real life on the demo account.

 

[Forexmospherian]

Thank you for your reply Forexmospherian.

1. From using the demo account I would guess 1-2 months, starting with very small trades to minimise total loss.

2. Over 200, on average I place and close 10 trades a day and they rarely get the chance to get a swap charge as they are only placed for a day maximum usually. The time frames I focus on when I decide to place a trade are first D1 to get an overview of the overall bigger trend if i do not already know it. But usually i work with M15, M30 and H1 time frames.

3. Foundation was a special offer for £30 from one of these voucher companies, on their site however it is going for £450. I thought the way the teach was excellent so I went for the ultimate course that was usually £2.5k but they had an offer on for £600, so i paid £600 for the ultimate.

Cheers

Hi TMT4

Thank you for your reply

I think Pat 494 has summed it up really and so will try and explain more in more detail.

There are some good points on your side as well as many that you might or might not know about yet.

The first and the key one - is that demo account and a real live account are just like chalk and cheese -so different.

You need to use a demo to test your method - whether thats for just a month or for even 3 or 6 months.

But when you do start going live - with real money - you will find it entirely different.

You will not always be able to enter exactly at the price you go for and you might get requotes and delays of anything from 5 to 60 seconds. This will unsettles you along with pip slippage against you and any losses wlll be magnified to make you feel uncomfortable.

For example - lets say you use a 25 pip stop with a 60 or 80 pip target. On demo you will stay with your rules etc - but on a real account if you make say 70% of your target and then price pullsback say 20 pips - you might play safe and take just a 22 pip profit - against your 25 pip risk

Suddenly rather than in theory you having a say 60% win ratios with risk / reward wins of say 2 or 3 - drop to only 1 and then you find out this will play with your mind

When you are say 20 pips down and your stop is at 25 pips - you might extend to say 35 pips to play safe and then when price gets to 33 pips against you - you give your stop extra space to say 50.

You then get stopped out at minus 50 pips rather than 25 pip loss

In demo - the pressure is just not there. Yes on say $1 or $2 - you might say no pressure - but then if you make say $15 a pip and you have a $200 loss - you will start to realise - you could lose your account etc etc

OK - next positive point.

If you have taken 200 trades already and are winning - thats in your favour

I have known of many traders thinking I tested my method over 25 trades and won say 17 trades and everything is good - ready to go live at $20 a pip

Wrong

Ideally you need 500 trades to test your method at least whether it takes 3 months or 12 months.

Trader at the beginning always have a lot more luck and have some good wins for a start.

But once they are on live money and have say 20 losses - that bad experience effects their trading logic and makes them more negative etc etc

With regards getting to an average or good level - allow 18 months to 5 yrs part time or at least 18 month to 3 yrs full time .I am on 13 years nearly - 7 yrs full time and intraday - and still learn more every year.

Most guru's analysts / trainers etc etc - well at least 80% are just not there and really are the blind leading the blind.

I am pleased you had not paid thousands for your course - a lot nowadays is free on the internet etc - but at least you may have saved a month or two having instructions and lessons - as long as you have benefited from it.

Approx between 80 and 90% of all retail FX traders fail.

Its not easy - but if your are determined and committed and can learn as much as possible - you could end up in the 10 -15% wh make regular money.

There is no Holy Grail - I thought I would learn everything in a few years - I was just so wrong.

I really do wish you well and Good Luck on your journey - but please don't think it will be easy etc etc.

IF you make it - its worth all the effort / hard work and all the losses you will have - but so many after 6 months or a few years get dissillusioned and give up - either losing all their several small accounts - or purely out of frustration.

Couple of other questions

What money management are you using on your demo - ie & stake size on your stop and trade etc and are you on fixed targets etc

Also do you know you can have with luck say 10 -20 trades all winners - one after the other ?

You also can have 10 -20 trades - consecutive losses.

Even if you have a 75% win ratio ( high) you can still have 7 -10+ losses in a row - always allow for that

Please feel free to ask more and I am sure a lot more members here will also tell you about their trading journey's

Regards


F

 

[TraderMT4]

Hi TMT4

Thank you for your reply

I think Pat 494 has summed it up really and so will try and explain more in more detail.

There are some good points on your side as well as many that you might or might not know about yet.

The first and the key one - is that demo account and a real live account are just like chalk and cheese -so different.

You need to use a demo to test your method - whether thats for just a month or for even 3 or 6 months.

But when you do start going live - with real money - you will find it entirely different.

You will not always be able to enter exactly at the price you go for and you might get requotes and delays of anything from 5 to 60 seconds. This will unsettles you along with pip slippage against you and any losses wlll be magnified to make you feel uncomfortable.

For example - lets say you use a 25 pip stop with a 60 or 80 pip target. On demo you will stay with your rules etc - but on a real account if you make say 70% of your target and then price pullsback say 20 pips - you might play safe and take just a 22 pip profit - against your 25 pip risk

Suddenly rather than in theory you having a say 60% win ratios with risk / reward wins of say 2 or 3 - drop to only 1 and then you find out this will play with your mind

When you are say 20 pips down and your stop is at 25 pips - you might extend to say 35 pips to play safe and then when price gets to 33 pips against you - you give your stop extra space to say 50.

You then get stopped out at minus 50 pips rather than 25 pip loss

In demo - the pressure is just not there. Yes on say $1 or $2 - you might say no pressure - but then if you make say $15 a pip and you have a $200 loss - you will start to realise - you could lose your account etc etc

OK - next positive point.

If you have taken 200 trades already and are winning - thats in your favour

I have known of many traders thinking I tested my method over 25 trades and won say 17 trades and everything is good - ready to go live at $20 a pip

Wrong

Ideally you need 500 trades to test your method at least whether it takes 3 months or 12 months.

Trader at the beginning always have a lot more luck and have some good wins for a start.

But once they are on live money and have say 20 losses - that bad experience effects their trading logic and makes them more negative etc etc

With regards getting to an average or good level - allow 18 months to 5 yrs part time or at least 18 month to 3 yrs full time .I am on 13 years nearly - 7 yrs full time and intraday - and still learn more every year.

Most guru's analysts / trainers etc etc - well at least 80% are just not there and really are the blind leading the blind.

I am pleased you had not paid thousands for your course - a lot nowadays is free on the internet etc - but at least you may have saved a month or two having instructions and lessons - as long as you have benefited from it.

Approx between 80 and 90% of all retail FX traders fail.

Its not easy - but if your are determined and committed and can learn as much as possible - you could end up in the 10 -15% wh make regular money.

There is no Holy Grail - I thought I would learn everything in a few years - I was just so wrong.

I really do wish you well and Good Luck on your journey - but please don't think it will be easy etc etc.

IF you make it - its worth all the effort / hard work and all the losses you will have - but so many after 6 months or a few years get dissillusioned and give up - either losing all their several small accounts - or purely out of frustration.

Couple of other questions

What money management are you using on your demo - ie & stake size on your stop and trade etc and are you on fixed targets etc

Also do you know you can have with luck say 10 -20 trades all winners - one after the other ?

You also can have 10 -20 trades - consecutive losses.

Even if you have a 75% win ratio ( high) you can still have 7 -10+ losses in a row - always allow for that

Please feel free to ask more and I am sure a lot more members here will also tell you about their trading journey's

Regards


F

Thank you for taking the time to write that for me how informative and useful you have been.
So to sum things up a bit it really comes down to sticking to your plan and not getting side tracked by your emotions, to trade with the method that you know works and that has actual proof of working. Take your losses and except them, move on then encourage and support your profits.

I have had what I would call considerable losses during my simulation trading experience but overall I am profitable overall, day by day I usually make money. I have tried getting into the habit of not extending a stop loss for the reason that I think it will turn around and go into my favour, I do not feel that is right for me.

I also wanted to ask you what your thoughts were on a trailing stop losses? I have played about with them a bit and they seem good for when you can not monitor your trades minute by minute. I find they are good for keeping those profits, but they do however work against me and cut me out too early in the trade.

Just a last question, what routine do you go through before you decide to place a trade? And how long roughly do you keep your trades open for? Over what period of time of constant loss should you get out of a trade and take those losses?

Thank you again

 

[Forexmospherian]

Thank you for taking the time to write that for me how informative and useful you have been.
So to sum things up a bit it really comes down to sticking to your plan and not getting side tracked by your emotions, to trade with the method that you know works and that has actual proof of working. Take your losses and except them, move on then encourage and support your profits.

I have had what I would call considerable losses during my simulation trading experience but overall I am profitable overall, day by day I usually make money. I have tried getting into the habit of not extending a stop loss for the reason that I think it will turn around and go into my favour, I do not feel that is right for me.

I also wanted to ask you what your thoughts were on a trailing stop losses? I have played about with them a bit and they seem good for when you can not monitor your trades minute by minute. I find they are good for keeping those profits, but they do however work against me and cut me out too early in the trade.

Just a last question, what routine do you go through before you decide to place a trade? And how long roughly do you keep your trades open for? Over what period of time of constant loss should you get out of a trade and take those losses?

Thank you again

Hi TMT4

I have a couple of threads on the forum that will explain more about my methods etc.

I would not recommend you following me - or trying to follow me for at least another 6 or 9 months - after you have tried trading live and understand more about what actually happens on a day to day basis.

If you have taken approx 200 trades on the demo - at approximately 10 a day - its important that you overall gain is just not off say 30 or 50 really good wins and 130+ losses . Thats because although you can be profitable with a win ratio of under 50% - it is far more preferable to be over 60 and 70% as an intraday trader.

Trailing stops are OK - anything thats save a winning trade from going into the red - is fine with me - but its always the question how much do you give back to make more.

My answer to that is variable stake sizes - or pyramiding and peeling so you keep banking profits when its going your way and cut back if it goes against you.

There are so many ways to manage your intraday trades - but I suggest for a start you stay with a simple method and with step by step - dont run before you are really happy walking

I am basically a scalper working off very tight stops - normally under 5 pips for every trade and so I enter trades depending on a number of clues - from time to PA to levels to price structure and other so called clues

My main targets are 7 pips to 25 pips - ideally all within under 30 mins

But if the trades looks as though it as more legs - I will leave on with stop in profit at a reduced stake - after banking the larger part of the gain.

I did not find out about this until I had been trading for over 2 years - trust me there is so much to learn and find out about FX trading - it just cannot be discovered in a few months or under a year.

My other main recommendation which I think is important - is studying live charts - at the coal face ( ie under 1 and 5 min charts )

Ideally you need 10000 hrs at it to be really be good - but after a few thousand hours - you will at least understand most of the movements etc etc

That could take a part time trader on say 20 hrs a week - approx 10 yrs to get to really high skill level. Even full time spending 60 hrs a week - you need at least 4 years at it


Hope that helps


Regards


F

 

[TraderMT4]

Hi TMT4

I have a couple of threads on the forum that will explain more about my methods etc.

I would not recommend you following me - or trying to follow me for at least another 6 or 9 months - after you have tried trading live and understand more about what actually happens on a day to day basis.

If you have taken approx 200 trades on the demo - at approximately 10 a day - its important that you overall gain is just not off say 30 or 50 really good wins and 130+ losses . Thats because although you can be profitable with a win ratio of under 50% - it is far more preferable to be over 60 and 70% as an intraday trader.

Trailing stops are OK - anything thats save a winning trade from going into the red - is fine with me - but its always the question how much do you give back to make more.

My answer to that is variable stake sizes - or pyramiding and peeling so you keep banking profits when its going your way and cut back if it goes against you.

There are so many ways to manage your intraday trades - but I suggest for a start you stay with a simple method and with step by step - dont run before you are really happy walking

I am basically a scalper working off very tight stops - normally under 5 pips for every trade and so I enter trades depending on a number of clues - from time to PA to levels to price structure and other so called clues

My main targets are 7 pips to 25 pips - ideally all within under 30 mins

But if the trades looks as though it as more legs - I will leave on with stop in profit at a reduced stake - after banking the larger part of the gain.

I did not find out about this until I had been trading for over 2 years - trust me there is so much to learn and find out about FX trading - it just cannot be discovered in a few months or under a year.

My other main recommendation which I think is important - is studying live charts - at the coal face ( ie under 1 and 5 min charts )

Ideally you need 10000 hrs at it to be really be good - but after a few thousand hours - you will at least understand most of the movements etc etc

That could take a part time trader on say 20 hrs a week - approx 10 yrs to get to really high skill level. Even full time spending 60 hrs a week - you need at least 4 years at it


Hope that helps


Regards


F

So are you saying on the grand scale of things there is a pattern that you can learn to tune into that will help with you getting it right as to whether a trade is going to behave in one way or another?
When I look at a M1 scale of a chart I can see patterns but they do not keep to their behaviours, meaning when I think they are going to go down or continue in the direction they are going in they do not. Support and resistance lines can help but how do you know when they are going to break through one or the other.
Can you go by the past and use that to decide what is going to happen in the future? I am not sure.

Cheers.

 

[Forexmospherian]

So are you saying on the grand scale of things there is a pattern that you can learn to tune into that will help with you getting it right as to whether a trade is going to behave in one way or another?
When I look at a M1 scale of a chart I can see patterns but they do not keep to their behaviours, meaning when I think they are going to go down or continue in the direction they are going in they do not. Support and resistance lines can help but how do you know when they are going to break through one or the other.
Can you go by the past and use that to decide what is going to happen in the future? I am not sure.

Cheers.

Hi TMT4

Yes - there are so many things to learn - in fact when you think you are say 75 or 80% there - you are probably really only 20% there.

To be a successful intraday trader - its a never ending journey over at least 10 -15 years. What you know after 5 years - will be only part of the picture. That is why so many fail and give up - or never make it - they really dont get half way down the road. Yes you can make monies after say 6 or 12 months - but then you will find out after say 3 years - it was more through a bit of luck and really good money management rather than trading skills from totally understanding price structures and price action.

Why do you think its takes a Doctor or Lawyer - or a a fully qualified electrician years to learn their trades ? Trading is just not a 6 month project and then you are fully there.

So thats why courses or books etc can only give you an outline or a brief guide on what needs to be studied in detail

Yes the past can give you an idea of what should happen - but not always - trading over the last 10 and certainly 5 years as seen the introduction of super computers and HFT etc - yes price still goes up and down - but not always in accordance with traditional theories etc etc

Regards


F