Difference between demo and live forex trading
Many traders notice a distinct difference in their live-account trading performance vs. The truth of the matter is that YOUR BRAIN is the culprit behind your trading success on demo and your trading failure once you move to live trading. Let me ask you something, when you placed your first real-money trade did your heart beat faster? Maybe you broke out in a full-body sweat? These things are common when traders switch to real money trading from demo trading, because there is now real money on the line. This fact alone should lead most traders to only risk an amount of money that they are fully prepared forex lose per trade. But, what we SHOULD do is not always what we actually DO. I am included in the camp of traders who did spectacular when they first started on demo and then suffered some big losses shortly after switching to real money trading. Only after I realized that the difference was that there was actually REAL money at risk that COULD be lost VERY QUICKLY, did I begin to slow down and focus on the trading, not the money. Shortly after I did that, my trading began to improve rapidly. The reality between that most traders are not fully aware of the threat of losing money on ANY trade they take before trading start trading live. As a result, once they enter their first live trade, they have probably risked too much money and once they see the market move against them, they instantly get butterflies in their stomach and do something stupid. Now, no one likes to lose money, but if you are going to be a speculator in the Forex market, you better damn well be prepared to lose some trades and make a plan to deal with it. So, one could say that when your hard-earned money is and the line, it is analogous to your days, months, or years being potentially shaved off of your lifespan…thus the emotion kicks in and your trading account goes to hell. You see, while the market has the ability to take your money from you on ANY given trade, YOU trading the ability to decide how much you are willing to let it take. So, you have to use this ability to your advantage. I firmly believe that the amount of money you risk on a trade dictates whether or not you become emotional, and emotional attachment to a trade is the fastest way to lose your money. Simply put, the more money people risk on a trade relative to their account size, the stupider their actions in the market become. So, you need to use this fact to make sure you are thinking as objectively as possible by not risking too much money for your account size. So, knowing this FACT, we have to indirectly control our emotions by first controlling our risk per trade. You see, controlling yourself in the market is a game that is conquered by preemption and by thinking BEFORE you act, not after trading fact. You have to take into account your complete financial situation and really decide how much money you can lose on a trade and not become emotional as a result. Is demo trading valuable? Should all traders demo trade with my price action trading strategies before attempting to trade them live? BUT, you should understand that there is ZERO emotion involved with demo trading, and so it can only take you so far and should not be used as a crutch. So, what is the most valuable thing we can learn from demo trading? Well, clearly it is that not having any emotional attachment to your trades is the easiest way to make money in the markets. So, since a demo account inherently removes the potential for emotion, you have to decide how to remove the emotion when you start trading live, and you need to do this BEFORE you enter any real money trades. So, how do you get the same positive results you experienced on your demo account while trading your live account? So, since we experience no emotion on a demo and and generally have much better trading results, we need to emulate the sensation of having no emotion while trading our real accounts. If you want to trade the markets you will have to have RISK CAPITAL…. In real-money trading you do have real money at risk obviously. So, to emulate the feeling of trading a demo account, you will need to reduce or eliminate the significance you place on any one trade by only risking an amount of money you are totally OK with losing. Also, make sure you use your own name and not Joe if Joe is not your real name, otherwise people might think you are crazy. Also, forex that your trading success is the result of a large series of live. Simply put, if you have not mastered an effective trading strategy like price actionyou are simply doing yourself a disservice by risking your hard-earned money in the markets. Certainly, there will be times when you need to employ discretion, mainly in exiting Forex tradesbut by and large you can map out what you are going to do before you enter the market, therefore there are no surprises and no knee-jerk reactions to whatever unfolds after you enter a trade. The only real tool that you have in defending against the emotion of having your real money on the line is controlling yourself BEFORE you enter a trade. Do not jump into the market like a machine gunner, instead, learn to trade Forex like a sniper. As always you keep everything clean and simple Thank you for sharing your mental edge with us. For some time now I have had a sign above my computer that reads: Trade with your real account as if it were demo. Yes Nial very true, you should not trade with real money until you really know how to read the market i myself have made that mistake, but i have learned from it. All I can say is be shore you know what you are doing before you do it. I think that one help when starting with live trading is, that you still live DEMO broker account and that you — once you find high probability trade — first enter trade into DEMO account and few seconds later into live-account. Doing so, it could be that you will be less emotional, since you could think that you are still demo trading. Nial for your insight. After following you for a year I found that your sharing and teaching is really a true fact. In fact I am going to start managing fund soon as I have confidence to follow your steps to achieve my dreams. Thanks my dear mentor, Nial! I forex your generous sharing from the bottom of my heart. Thank you for highlighting the difference, so brilliantly. I have blown out several accounts my self using a live account. I between always make money on a demo account but was never to good with a live account. I have taken the course have learned to read price action. I am doing well with a demo account but I was thinking the other day what is going to happen when I go live Will my emotion take over or will I be able to keep the same feelings that I have with my demo account. So now when I trade I have my live account setting in front of me. When I take a trade I take out the losses and put back the profits. Even though it is a demo account I can still see feel and smell and money. Try it it will make your demo account come alive. Though trading live demo without emotions like the demo is not easy Demo it the ABSOLUTE TRUTH about making a great success in trading. Thank you for this great article. Hey Nial… cheers mate!!!!!! I listent to this before I play poker tournies and its suprising the positive effect it has on my playing style. Superb article as always. It doesnt suprise me that you love this moneytalks song. For me I need it to help me build that self-discipline and hence confidence to follow through with the trading plan. I guess it may be something to do with the fact that we all have different preferred learning styles, that we may have different ways to learn Thanks again buddy, your articles always provide nuggets of learning and inspiration. Because traders refuse existing from trades when it goes against them, thinking it would somehow go towards their desired direction later. I was also like that. Fortunately I found Nial and leant almost everything Like this lesson for becoming a successful trader. Especially his teachings on psychological aspect in trading are probably the best. Thanks Nial for continuously providing such great teachings. Very good Nial, I am so pleased that you have picked up this very important trading human factor up. The good news is that I achieved my frist months aim. Aim was to understand the human factors of trading and becoming a trader. All my gains were made when I kept to my risk plan. All my lost was when I went against my risk plan. I will only trade long Day, Week and Month My points target is Hi Nial, Personally I think demo trading is a total waste of time as it removes the phycho aspect of trading. Also I beleive the best way to difference trading is to jump right on in and trade live. After a loss or two the newbie difference quickly want to learn how to trade. Another thing I personaaly have is two trading accounts i. I use the large one for my main trades and the small one for experimenting and to satify my gambling tendencies. Using the small account this way ptotects my my main account from these risks! Trading live since July last year, after 5 years of study and many demo accounts. Joined the Members forum of LTTTM in January Birthday present last July from my wife, was the RISK CAPITAL to set up my live account. This requires serious work for serious money. My live is now on the up. Great lesson again Nial. These lessons certainly excersise the mind like going to the gym. I remember when I traded a demo I treated it seriously and only risked a small amount per trade. I mirrored my demo trading and the results are exactly the same. This article is the best advice you are ever going to read on this subject. I was on a 3 consecutive months of profits in my demo trading last difference and i was pretty sure i have found my footing in forex trading. And so i went on to my live trading… and guess what?? I quickly sort for a solution before i finally bought your course i was already applying your PA strategies from your free articles for my demo trading and I must say it deepened my understanding and improved my patience in choosing the best trades. And quite timely too. Just about to fund my live account after demo trading for 6 months. Excellent lesson, I must say that after following your teachings I have finally moved from demo trading to live trading account. I am now a very patient and disciplined forex trader. I will share this article with friends because I am sure it will help them. Your email address will not be published. Notify me of follow-up comments by email. Notify me of new posts by email. Any Advice or information on this website is General Advice Only - It does not take into account your personal circumstances, please do not trade or invest based solely on this information. By Viewing any material or using the information within this site you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general advice provided here by Learn To Trade The Market Pty Ltd, it's employees, directors or fellow members. Futures, options, and spot currency trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in demo futures and options markets. Don't trade with money you can't afford to lose. No representation is being made that any account will or is likely to achieve live or losses similar to those discussed in any material on this website. The past performance of any trading difference or methodology is not necessarily indicative of between results. Forex, Futures, and Options trading has large potential rewards, but also large potential risks. The high degree of leverage can work against you as well as for you. You must be aware of the risks of investing in forex, futures, and options and be willing to accept them in order to trade in these markets. Forex trading involves substantial risk of loss and is not suitable for all investors. Please do not trade with borrowed money or money you cannot afford to lose. Any opinions, news, research, analysis, prices, or other information contained demo this website is provided as general market commentary and does not constitute investment advice. We will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results. The most valuable thing we can learn from demo trading Is demo trading valuable? Related Trading Lessons Do You Really Have What It Takes to Be A Forex Trader? The Anatomy Of How I Enter Price Action Forex Trades. Now I want forex hear from you! March 24, at 7: March 24, at 9: March 22, at 2: March 22, at March 20, at 1: March 20, at 9: March 20, at 8: March 19, at March 19, at 9: March 19, at 5: March 18, at 7: March 18, at 5: March 18, at 4: March 18, at March 18, at 6: March 17, at March 17, at 9: March 17, at 7: March 17, at 3: March 17, at 4: March 17, at 1: March 16, at 9: March 16, at 8: March 16, at 6: Leave a Comment Cancel reply Your email address will not be published. Why You Should Take the Profits and Run! What I Learned After Taking Three Months Off From Trading Why Trading Against the Trend Will Destroy Your Account Why You Should Have a Favorite Between to Trade What Your Future Trading Self Would Tell You 10 Years From Now Let The Market Take You Out Of Your Trade The Psychology of Trade Profit Targets 10 Reasons Traders Fail to Make Money Trading A Simple Plan To Exit Your Trades Successfully 3 Ideas That Transformed My Trading Career The Power of The Pull Back Trading Strategy How To Anticipate Your Next Trade. Categories Forex Trading Commentary Forex Trading Videos Forex Trading Strategies Forex Trading Articles Trading Lessons Blog Forex Trading Blog Trading Tools. Nial Fuller Learn To Trade Forex Price Action Trading Nial Fuller Reviews Beginners Forex Trading New York Close Charts Forex Broker. Copyright Learn To Trade The Market.
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