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Is demo a step before real trading?

{quote} I think some people feel this to a great extent, some to only a small extent and others not at all? What also interests me is that when you ask the most successful, most experienced traders, trading really big, real money accounts (either their own or for their employers) about this, their answers are almost along the lines of "I don't think about the money at all: it's just numbers on a screen, to me." That's also what many of those "Market Wizards" interviewed by Jack Schweiger in his set of 4 books say. So maybe for many people, there's...
Higher.High,

There's a lot of wisdom in your post that's unfortunately been overlooked. IMO, the whole "demo doesn't feeling real" needs to be turned on its head, i.e. real live trading should emotionally feel the same as demo trading. I didn't turn the corner until I adjusted how I was live trading to match how I felt demo trading. For example, reducing position size and leverage until I no longer felt any sting from losses.

Demo trading is also perfect for practicing the most essential skill to profitable short term trading: cutting losers and managing losing positions (which is so much more than just setting an SL)
Surely, a demo should be your first step before real trading. I’m glad you understand the importance of it and made quite decent profits as I can see. However, as you said that was only from 2 weeks of trading. It’s not too much?I won’t advice you to go for real trading yet, as you didn’t prove to be profitable over like 3 months at least. 6 months is ideal, so keep trading on a demo, and once you will have 3 months solid in a row without blowing an account and following all the rules (strategy, risk management, keeping your emotions etc) you will be ready.
Why does no one talk about cent accounts here? Yes, a demo is a logical first step before real trading, but only if you are a complete newbie. Once you know a bit more about trading, understand a trading strategy and all that, you should skip trading on a demo account and go with a cent account. This is an account type many brokers offer where the account balance is shown in cents, instead of dollars. So, for $10 you get to trade with an account with 1000 units.
Why is this a game-changer?
Because it bridges the main disadvantage of a demo account and that is the lack of emotions when you trade with virtual money. Here, with a cent account real money are involved, even tho the investment is very small like $10 you can still imagine that you trade a $1k account size and practice money management and position sizing
I think what was said is correct: demo should not 'look real', but live should be brought to the level where it is emotionally manageable (position size/leverage). Demo teaches you repeatability, but live teaches you self-control. That's why cent/micro is a good bridge: you pay the 'emotional tax' cheaply.
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Sure it is. And I understand that some would argue that it's better to start real trading immdeiately upon registering an account since that way a person gets exposed to real-world trading.
I'd still stick to the idea of demo trading first before doing real at least for getting familiarized yourself with the platform and see how charts work. After all, you can't jump into the deep ocean without trying to learn to swim before.
Sure it is. And I understand that some would argue that it's better to start real trading immdeiately upon registering an account since that way a person gets exposed to real-world trading. I'd still stick to the idea of demo trading first before doing real at least for getting familiarized yourself with the platform and see how charts work. After all, you can't jump into the deep ocean without trying to learn to swim before.
Yeah, I get your point and I actually agree with you to a certain extent. Starting with a demo account is definitely the right move that you may make in the very veryyy beginning. It helps you understand how the platform works and just get comfortable overall without the pressure of losing real money. That learning to swim before jumping into the ocean analogy is spot on lol, never heard of that before.
But at the same time, I do noot think that staying on demo for too long is productive either. Demo trading lacks the psychological factor, it’s obvious. No fear, no greed, no hesitation, which is a huge part of real trading. SO, once you learned the fundamentals and learned at least one solid strategy that you can follow with discipline, it makes sense to transition to real trading (even with small amounts, there are cent accounts for this specific reason). That’s where the real learning curve begins, because emotions and execution feel completely different when real funds are involved.
Demo is useful to learn the platform and prove your rules, but live trading adds the emotion part and that changes decisions. A good bridge is a micro live account where you risk very small, so you learn execution and psychology without big damage
Yes. demo trading is a very much needed step.
Part of developing a system is checking there are no bug in the code. Checking it under different types of markets. Finding on which instrument it works best.

Elsewhere in this thread it was correctly stated that when trading with real money, you start to act differently. You, not your EA.
That's another reason extensive demo testing is must.
If you only test for a short time during a live trade you may say: This time it's different because there was this and that economic news.
But if you had tested longer you would have known your system works fine during news. Or if it fails during the news, then you simply don't trade during news.

So in short, extensive testing is also controlling nerves and impulse decisions during live trading.
You made a good point. The reason why cent account is praised a lot as it’s cousin the demo account is that not all the brokers offer this type of account. And it’s almost a widespread fact that if you are a new trader you start on a demo. This is what every new trader reads online and this is how the vast majority start. I’m sure even you, you have started on a demo account, too.
A Cent account is great to bridge to real trading without significant risk or deposit. Only $10 is enough. And yes, it addresses all the limits that the demo account has, such as perfect execution and spreads, and the trading emotions.
If I need to mentor a new trader, after a week playing on a demo account I would tell him to start on a cent account and practice.
Demo accounts are a great starting point for beginners to learn the basics without risk. However, cent accounts are indeed a good bridge to real trading because they introduce real market conditions and real emotions with minimal capital.
Both have their place, and used correctly, they complement each other well.
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