Hi all,
Firstly kind regards to everyone trading Forex, I feel a strong affinity to people who choose this as an investment vehicle as it is my passion.
I felt it important to start at this thread as this is where I started my trading career. I demo traded for a bit more than 6 months and had some exceptional results.
However in my journey to become consistently profitable on the forex market, if there was something I could change it would have been a shorter period Demo Trading.
I always tell people who are starting that just as you cant learn to fly a plane in a flight simulator in the same way its difficult to learn to be profitable trading on a demo account.
A few points.
First of all, Demo accounts are an excellent way to learn how to use a platform and that should be their sole purpose.
The very fact that the Demo accounts give you a demo money is what throws a lot of people off track, in the beginning the sole focus should always be the points(pips) gained on the market. That is the true measure of your performance. The money will follow.
Demo trading gives you a false sense of confidence - When I started I grew my account to 1000% in 6 months and thought I knew exactly what I was doing, however I had no clue of how different it was going to be when I started with real money. It suddenly changes from a video game to real life. It's a whole new world.
I realized that I had not developed concrete rules of trading and hence was not confident to stay in trades like I would on a Demo account as it was not my money.
So I had to take a step back and work on my rules, and yes like someone said its better to start with a small amount of real money as the emotional side of it is what makes or breaks you in this business.
After 5 years trading forex everyday, i learnt that you can learn all the technicals and fundamentals from various sources but the true psychology of trading your hard earned cash and controlling your greed and fear is something that you can only learn from experience trading for real.
And that's because we are all very different individuals, and view money in various different ways.
A piece of advice to anyone who would still postpone experiencing the real thing with demo trading,
Trade with the smallest position size available, so that you do not get carried away with the money that you are making or start demo trading with the exact amount that you plan to start trading real money with and
Secondly count the points (pips) that you make on the market every month not the money.
But I totally resonate with the author of this thread in the view of not starting with real money if you are not confident in a specific system. You can build confidence in a system of trading through repetition of that system on a demo account or by simply having a logg book where you record trades that you would make on the market and their results. The latter is extremely powerful but generally ignored as its not as swanky as trading a 50000 demo account.
Wish you all the best
Happy Trading!
Adrian