DislikedThere are many threads on here that debate demo versus live. I personally 100% agree with Jim and others who promote the same path. Demo trade first for at least 3 consecutive profitable months before going live. You must exercise strict MM, get your system clearly defined and, become confident and proficient with it BEFORE committing any real money. You'll only be donating your hard earned cash otherwise.
I also agree with demo trading not providing the true emotions you experience with real money. To me, demo trading was like Monopoly. I paid the price a number of years ago by cooking my first live account (only $200) in around 6 months. I exercised good MM, but just had an over trading problem. The market was moving and I viewed it as money I could be making. I also had problems with my exits, cutting the gains short and not getting into the "free trade" position.
Sure some people can treat the demo in the same way as a live account, but some people can also act and others (like myself) can't.
I then went back to the demo for almost 7 months to fine tune what I learnt by trading live. I still had the Monopoly blues, but I did not forget what it was like to lose. Like most people, I loved winning and despised losing. One thing I quickly learnt was that losing is just part of the game/business, thus the utmost importance of strict MM.
If I had my time again, I would take this approach:
1) Demo trade for at least 3 consecutive profitable months. The main objective here is confidence and proficiency in your strategy/system and keeping to strict MM. It's an added bonus if you can grasp the psychological aspects too.
2) Live trade with a very small amount (an amount you can afford to kiss goodbye). The objective here is to get in-touch with your true emotions. Learn to cut losses short and take them on the chin. You'll also want to learn how to ride out gains to maximize your profits.
3) Is dependant on the outcome of step 2. If you cook your live account, then it's back to the demo and step 1 for you. If you consistently profit month after month, then you can slowly add more funds and start blowing out the emotions again. Trading a cent per pip is MUCH easier than trading $100, $1000 and beyond per pip.Ignored
demo trading allows you to experiment more w/ whatever you plan to do ... i have gone against the advice of many that cautioned demo trading first; and b/c i hadn't developed a well-defined "system" of entries and exits ... i LOST ... and i didn't lose just a little --- those small deposits ADD UP!!! demo trading gives you the latitude to experiment and fail. ... as exits are definitely an issue for most traders (if they're anything like me!) ... try some things out ... modify, edit, revise ... but ultimately, practice becoming CONSISTENT ... then take your EMOTIONS and your CONSISTENCY from your demo trading and go live w/ very small lots ...
j16 is not crazy when he STRESSES, REPEATS, and STRESSES, and REPEATS his cautionary tale about demo trading first. not only for the above reasons stated, but also (inter alia) to learn PATIENCE and DISCIPLINE.
if you're okay losing money ... even pennies per trade ... then ignore j16 and jump into the deep end even when you don't have much experience in the shallow one.
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peace and profitable trading to all.
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"Believe nothing you hear and half of what you see." Proverb