Is a demo account waste of time?
- Thread starter bgk
- Start date
If you can't cobble together a consistently-profitable trading plan in demo, you sure as hell aren't going to be able to do it live. And without a consistently-profitable trading plan, you may as well rake all your money into a pile and set it on fire. At least you'll get some pleasure out of it.
The chief problem with demo, aside from the sometimes optimistic fills, is that the beginner doesn't take it seriously. He'll wait a second or two to determine whether or not the trade he thought about taking was working out, then think to himself that he would have taken that, which is a step toward telling himself that he did take it. That can lead to disastrous results when transitioning to live trading. Or he will literally trade the past, like reading an old chart from right to left instead of left to right, and persuade (delude) himself into thinking that he's got this hot system which is in reality a bunch of crap.
At the very least, if he does it right (or, in your case, she), he can/will learn discipline, which is absolutely essential. If he can't/doesn't, he may as well move on, and the sooner, the better.
The chief problem with demo, aside from the sometimes optimistic fills, is that the beginner doesn't take it seriously. He'll wait a second or two to determine whether or not the trade he thought about taking was working out, then think to himself that he would have taken that, which is a step toward telling himself that he did take it. That can lead to disastrous results when transitioning to live trading. Or he will literally trade the past, like reading an old chart from right to left instead of left to right, and persuade (delude) himself into thinking that he's got this hot system which is in reality a bunch of crap.
At the very least, if he does it right (or, in your case, she), he can/will learn discipline, which is absolutely essential. If he can't/doesn't, he may as well move on, and the sooner, the better.
I’m currently teaching my Wife for the past 8 months and have found this to be very helpful:
Trade real money and if your overall loser after 2 weeks…go back to the simulation to work out the problems of discipline & technique and don’t start up again until you win on the Sim to rebuild your confidence. ( I do this still).
Of course we all know trading Sim well doesn’t always translate to real money….but it does sometimes…and will save you when you get in that downward spiral of losing…
Trade real money and if your overall loser after 2 weeks…go back to the simulation to work out the problems of discipline & technique and don’t start up again until you win on the Sim to rebuild your confidence. ( I do this still).
Of course we all know trading Sim well doesn’t always translate to real money….but it does sometimes…and will save you when you get in that downward spiral of losing…
rmorse
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Why should there be any fear? If one knows what he's doing, there's nothing to be afraid of.
Only in hindsight you can see what really happened with your trade, so you can know what you do (follow your system), but you never know the outcome in advance, so in fact you don't know what you do. That's the reason why some people have fear. Depends also from personality. I had a long time fear to trade, even when there was a very high probability that I would win big. So mathematically nothing could go wrong. But it went wrong emotionally.
Emotions can block even very successful traders.
Example 1: I am afraid standing on a roof of a 50 store building. Mathematically the possibility that something can go wrong is almost zero. But I am still afraid, mathematics cannot take away my fear. If I receive mental coaching maybe I will be able to control this fear.
Example 2: A young elephant was tied up with a thin rope to prevent him from running away. The young elephant tried many times but did not succeed. Many years later the elephant was still tied up with this same rope. He did not try to escape anymore because he was convinced that after trying so many times already in past he would never succeed.
I know some people who had no fear, they are rare but they exist. Because trading is not a success for all whose try it, most of them were never successful, two lost each over 10 mio dollars and went broke. Even without fear, one day you can catch the mother of all trades and lose everything. Only exception was for traders with a very good system.
Most normal human beings know fear and have fear.