Profit in demo & loss in real

P

Peter brandley

Hello friends- i mean about when I try to trade with demo account I can make many profit, even around 10% of capital daily. but when I try to trade with real account I always loss my money, even I have touch margin call yesterday. what happen, i feel i have use same strategy?:D :D
 
Could be any number of things... might be some of the following ...

1) "slippage" - your demo trading may not have accounted realistically for other traders competing for the same prices, many faster than you; therefore your demo traded market orders filled at better prices than your real live traded market orders, and your demo traded limit orders filled on occasions when your live traded limit orders did not ... [lengthen the time frame you're trading/holding over; automate and co-locate]

) "no edge, and forward test in demo was too short" - you hit a lucky run over a short period of time while trading your strategy in demo, but the strategy actually has no edge; and now that the lucky streak is over you're experiencing the more typical performance to be expected ... [automate so you can backtest thoroughly enough to get confident there's an edge, and then forward test for long enough to establish it behaves live as you expect]

) "hindsight bias" - you believe you paper traded OK, when in fact the losses paper trading were the same ones you now suffer trading live; you just didn't "feel" the paper losses because they weren't real, and you're kidding yourself ... (believe me, it happens!) [automate and backtest over enough historical data to let the numbers speak objectively for themselves ...]
 
You said right that we get profit mostly in demo and fail to get it in real trading . Real trading is really difficult to collect money . It had many reasons. We had more emotions in real trading . Capital also counts for profits which is low than demo in real accounts.
 
This is because of the attachment involved with the real money which alters the trading result due to traders attitude difference.
 
Demo, you let your winners run and cut your losers quickly. Real, you take your profits too quickly, while watching your losers get worse hoping they'll come back. Even if you have more profitable trades than losers, you'll still end up down at the end of the day when your losses are greater than your profits. Like so many others, you lose money while taking profits too quickly. Factor in slippage and commissions, you have no chance.
 
Quote from StoicZeno:

Demo, you let your winners run and cut your losers quickly. Real, you take your profits too quickly, while watching your losers get worse hoping they'll come back. Even if you have more profitable trades than losers, you'll still end up down at the end of the day when your losses are greater than your profits. Like so many others, you lose money while taking profits too quickly. Factor in slippage and commissions, you have no chance.
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You make a great point here, SZ

In addition, I think sometimes people thrown get off by the large demo account balances they practice with before trading live. For example, support your demo account has $50000 in it, but you only intend to start with $5000 when you begin trading live. You need to make sure your practice trades in the demo account are appropriate for a $5000 balance.

The analysts at DailyFX.com recently did a study into profitability among retail forex traders. They found a dramatic difference in the performance between traders who use less than 10:1 leverage, and those who use more than 10:1 leverage, with the former doing much better than the latter. Their conclusion was that it's best to use 10:1 leverage or less: http://www.dailyfx.com/forex/educat..._Better_Wheel.html?CMP=SFS-70160000000MumJAAS

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That means if you intend to trade with $5000 in your real trading account, your total trade size across all your open trades should not exceed 50k or $5 per pip even on the demo account. That way you can get realistic practice. Unfortunately, many traders overleverage, which means they end up risking too big a percentage of their accounts on each trade.

Jason
 
Demo account cannot be used for practicing money management and it is hardly done by any trader because it needs practice for a long time and with no real profit in demo account, the trader tend to get lazy.
 
I think many traders have this experience and they are making profit in demo but loss money in real. If you try with low amount in real then there is a big chance loose and you can not try more and more like using stop loss and more.
 
Quote from Pipflow:

This is because of the attachment involved with the real money which alters the trading result due to traders attitude difference.
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Yes of course emotions are involved in it and its not easy to control the emotions while trader and we had to trade with proper planning and strategies.
 
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