Thursday, March 23, 2017

Is Trading Demo Account The Same as Real Account

July 8, 2015 by  
Filed under Forex FAQ & Latest Post


In today forex faq, we have a question from one of our fellow traders regarding the difference in response time between the demo and real account.

However I will like to take this opportunity to tell you guys more about these 2 type of trading account.

Below is the question:

Is trading the 15 minute charts on the demo account the same as trading the 15 minute charts on a real account?

What I mean is whether the response time will be the same for placing a market order?

When I place a market order on the demo account on the minute chart the order gets filled quickly, will it still get filled quickly on a real account on the minute charts?

I am really grateful I found your blog, it is really very helpful in shortening the learning curve.

First of all, let me answer the question above first. The response time is the same for demo and real account. The only problem in executing an entry is during period of huge volatility.

If you try to enter a trade when the market is producing a long candle, you will find that the trade cannot be fulfilled at times. This happen irregardless of whether you are trading the demo or real account.

In fact, if you are able to make profit on a demo account, you will definitely be able to make the same amount of profit on a real account on the same month. That is why I often emphasize a lot on demo trading.

There is one thing I want to tell you guys here. A demo account is exactly the same as a real account. The only thing is that you are trading virtual money on a demo account.

The only difference in trading demo and real account is your own emotion. Nothing else.

When you are trading real account, you will tend to hesitant in your trade entry as real money is at stake now. When you are trading a demo account, you will enter a trade without any hesitation because it does not involve your money.

That is why some people make profits in demo account but maybe lesser profit or even losses in real account. They hesitant in entering a trade and miss out a good trading opportunity. When they see that the market is moving in their direction, they then enter a trade late which is why they lose money most of the time.

if they had entered a trade like the way they enter a trade on a demo account, they will have made the same amount of profit on a real account.

So stop thinking that a demo account is different from a real account. The only difference is the trader emotion and nothing else.

However I have a suggestion for those of you who are in your demo trading now. Once you are able to produce at least 3 consecutive months of profits in trading, you can start a micro account first.

With a micro account, you will trade small lot size and therefore you will not hesitant when you enter a trade. When you are used to trading real money for sometime, you can start to change your account to mini account and slowly to standard account.

In this way, you will be able tame your trader emotion as you move on.

I hope that I have answered your question and do feel free to ask me more question.

 

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