Question about a demo account

Dark Knight

Newbie
2 0
I don't want here to get into the pros and cons and wisdom of using demo accounts. I'm completely new and practice helps, and I don't want to risk real money yet. I've just got a specific question.

I'm using the Plus500 WebTrader. Something about it is baffling me and no doubt the explanation will be obvious to experienced people here.

All was going well and I was making a profit. I decided I would buy more of what was doing well. Specifically, I was shorting oil and some other stocks. But when I place these new orders, the positions appear different to the old orders.

For instance, the Net P&L of my old order would be in the black but the Net P&L of my new order would be in the red. It's the same stock, bought in the same quantity, but at different times and different prices.

I completely understand that the profit or loss (as the case may be) will be different. That's obvious. But I don't understand how one can be in loss and the other in profit given that it's the same stock so the price is moving in the same direction. To me, it doesn't make sense, but I'm new to all this.
 

AronJohnstone

Newbie
3 0
Been trading in demo for awhile now and looking to go live soon, many traders have suggested that demo is not the same as the Live trading, how would a beginner like me know when would be the right time to go live ?
 

Terez93

Junior member
10 1
We must not forget that we do not invest personal funds on a demo account, many of this like it, because psychologically we understand that we are not losing money.
Yes, that is why live and demo trading are quite different.
 

tomorton

Legendary member
8,396 1,338
Been trading in demo for awhile now and looking to go live soon, many traders have suggested that demo is not the same as the Live trading, how would a beginner like me know when would be the right time to go live ?
Go live when you are consistently profitable using a safe well-defined method in demo. Then just replicate that method in your live account.
 

WalletInvestor

Member
97 29
I'll try to answer the actual question lol

Prices of assets constantly fluctuate. What we see as a long-term uptrend consists of many smaller moves up and down. You yourself have written that you entered positions at different times and different prices. Profit and loss are always calculated relative to the price you bought the assets at. So for the investment you made earlier, the price went up since then, so you are holding it at a profit. However, since you invested the second amount of money, the price must have gone down compared to the price you bought at. So even though you invested in the same asset with the same price movement twice, the entry prices were probably different.
 

hatemypips

Established member
689 59
I don't want here to get into the pros and cons and wisdom of using demo accounts. I'm completely new and practice helps, and I don't want to risk real money yet. I've just got a specific question.

I'm using the Plus500 WebTrader. Something about it is baffling me and no doubt the explanation will be obvious to experienced people here.

All was going well and I was making a profit. I decided I would buy more of what was doing well. Specifically, I was shorting oil and some other stocks. But when I place these new orders, the positions appear different to the old orders.

For instance, the Net P&L of my old order would be in the black but the Net P&L of my new order would be in the red. It's the same stock, bought in the same quantity, but at different times and different prices.

I completely understand that the profit or loss (as the case may be) will be different. That's obvious. But I don't understand how one can be in loss and the other in profit given that it's the same stock so the price is moving in the same direction. To me, it doesn't make sense, but I'm new to all this.
Maybe old P&L becomes inactive because it's sums up with the P&L of latest position. I mean it makes little sense for a trader to track two P&L because what matters is net change of the position.
 

Spread-Bettor

Junior member
34 4
Been trading in demo for awhile now and looking to go live soon, many traders have suggested that demo is not the same as the Live trading, how would a beginner like me know when would be the right time to go live ?
Demo and live are very different. One of the main reasons many traders eventually lose money is EMOTIONS.
With a demo account you don't get overwhelmed as no money involved and thus you let your strategy work for you, on the other hand, in live trading emotions will influence your decisions.
 
 
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