You will probably get many contrary replies to what I'm about to say (possibly along the lines of you won't know what trading is until you try for real – and I'll be the 1st to agree with that) but I am of the firm belief that you should not go live until you have convincingly proved to yourself that your demo trading is reliably successful – and that may take some time to achieve and will likely test your perseverance and patience to the limit!
It's probably worth heeding what Mr Charts says. He is one of our long-most serving members and, I believe, has been trading for a living for about 20 years, so he should know a thing or 2 about trading live. I can recommend you to read all of his most helpful stuff but particularly his account of how he transferred from his previous occupation to trading. In that (if I recall correctly) he recommends at least 100 paper trades of a successful nature in order to ascertain reliability and competence.
My logic is: until you can papertrade successfully there is little point in risking real money. And even then you should still be prepared for disappointment. On the other hand, if you've got loads of spare dosh go ahead straightaway – you'll certainly learn lessons you won't forget in a hurry! But all that's only my opinion – others will tell you different.
I second 0007's excellent advice - with one additional caveat. Once you're performing consistently well trading your demo account and are ready to transition to a live account - only trade the smallest position size that your broker permits. This is irrespective of how big your account is. If you make a hash of it - and you will at some point - losing small amounts won't hurt. If all goes according to plan, increase your position size incrementally one step at a time. If things go badly and your stat's start to fall away, go back down a step (or two) to your previous position size. Only go back up when your stat's go back to their expected levels. If things continue to go badly, STOP trading your live account altogether and return to demo trading until you sort out the issue(s). No shame in doing that at all, it's common sense and will keep you in the game. I've done it many times and, although I've never asked him, I'd wager 0007 has as well.
Lastly, assuming your name is real and you're a chapess - you have one major edge over most of us chaps on here. Women often (but not always) make better traders than men. The irony of that is that relatively few of them do it - at least in a retail capacity. Good luck.
as the guys are saying ............you have to be consistently successful on demo before attempting real money
its a different game in the real money world ......demos are kind of like learning slopes that the brokers deliberately soften to aid the progression of new traders into parting with their money
I mean that generally the spreads will be more consistent and spikes are smoothed more .....so you are not getting the rough and tumble of real prices .......
Having said that if yous are trading sensibly with decent Stops above even 1 hour charts you will be free of such problems ....im talking more the manic lower Timeframes where i inhabit for most of my trading time
yes if you make consistent profits, for the most part it will instil confidence that this can happen on the live account too. Demo accounts reflect the spreads and leverage offered. The only thing a demo doesn't usually cover is something like 'slippage', but pricing etc would reflect the broker's live account.
In my opinion the sooner the better. The quicker you experience the psychological part of trading the better. That doesn't mean go all guns blazing with your trade size. Trade the smallest amount possible and trade as you would as a demo. I.E the money doesn't matter, that's the size you should be trading. I would say demo for 1 week just to get use to how to execute trades etc and get a feel for the platform and then start trading live with 0.01 lots and work it from there.
The main idea is that trader should be able to be consistently profitable before switching to real account. That is why it wholly depends on trader`s perfromance and trading results and could not be specified as "1 month" or "1 year". If there is no consistent positive results using demo account, this means that trader could not earn money even in almost ideal trading conditions without psychological pressure, fears and greed, so how could he earn money at the real market?
Another point is that switching to the real account does not mean that trader should forget about the demo. It still could be a perfect tool to improve trading skills and habits, or to test new ideas. At the same time, if we are talking about checking new strategies, it will be better to use special software, the backtesters - it will make the testing process easier and the results will be relaible. Anyway, it is important to test each new strategy on demo to check the influence of the trader`s psychology.
So, use the demo account only unless you will become consistently profitable trader and then use it from time to time to improve your trading.
The thing is a lot of people are expert demo traders but fail when they trade live. WHY IS THAT? they don't experience the feeling of losing money. A lot of people start becoming PNL traders when they go live and in fact don't trade like the did in a demo.
Depending on your trading approach, specifically referring to not following arbitrary spread scalping systems or short term TFs, then demo/sim accounts can actually give you a really realistic view of what to expect in a live account situation. The real key aspect though for this to occur is that you need a trading system in place first - a rule based approach with no discretionary elements. If you have this in place then providing you stick to it you will eliminate the emotional side of demo vs real account results.
Many say that the biggest downfall of demo vs real comes down to two key points.
1. Execution / Fills levels based on liquidity - this is why the short term trader who holds trades for minutes and who relies on execution at pinpoint accuracy levels will see a big difference when going to live from demo. The difference of a pip or less may account for a significant margin hit. The bigger your targets the less of an impact this will obviously have when transitioning to live.
2. Emotional aspects of hitting a loss - again, this is why demo and live accounts tend to reflect mirror like performance for trading approaches that are systematic in nature. You follow the rules, the entries, the exits, the risk management word for word. It's when you introduce discretionary (non rule based systems) that you open the door for emotions to come into play.
As a lot of members have already stated, don't go live with real money until you are consistently profitable in your training account. It took me 6 months of hardcore simulation before i developed a strategy that I was comfortable with. I am not saying it will take you 6 months. Everyone is different. You might find a strategy that shows you immediate gratification. Learn to control your psychology and you will be a killer.
Don’t hurry with that, take some time. Till you do not understand every basic thing there and do not get consistent profits, don’t start live, cos here you have to handle stress as well. So first just be confident about your strategizing power and then start live.