A classic mistake, made by new traders, including smart ones, is to get all excited about results from paper trading or demo trading, which did not realistically take into account the costs of executing transactions. These costs include such things as commissions, spreads, slippage, front-running, stop-running, re-quoting, man-quoting, shading, individualized pricing, anti-picking rules, freezing, etc., etc. The new trader almost always finds that the strategy which worked on paper either fails to cover the transaction costs of real trading, or it was based on temporary market conditions which quickly disappear and leave the strategy a loser.
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The difference between demo and real accounts
- Thread starter jessieblue
- Start date
Quote from jimrockford:
A classic mistake, made by new traders, including smart ones, is to get all excited about results from paper trading or demo trading, which did not realistically take into account the costs of executing transactions. These costs include such things as commissions, spreads, slippage, front-running, stop-running, re-quoting, man-quoting, shading, individualized pricing, anti-picking rules, freezing, etc., etc. The new trader almost always finds that the strategy which worked on paper either fails to cover the transaction costs of real trading, or it was based on temporary market conditions which quickly disappear and leave the strategy a loser.
Hence the reason the tread is called "the difference between demo and real acc".
So, jimrockford , What demo did you use, and was it a difference when you went real?
Quote from jessieblue:
Hence the reason the tread is called "the difference between demo and real acc".
So, jimrockford , What demo did you use, and was it a difference when you went real?
You assumed that I used a demo. Your assumption was incorrect. If that disqualifies me from offering my advice, then I will gladly stay off your thread. Now go do you homework. Stop relying on others to do it for you. You need to spend hours and hours reading through ET archives about how FX brokers do business. You need to read "Reminisciences of a Stock Operator" by Edwin Lefevre. Maybe you should also read "Extraordinary Popular Delusions and the Madness of Crowds". You need to understand how competitive markets work. You also need to understand frauds and delusions. Good luck.
P.S. If you feel my words were harsh or insulting, then let me assure you it was purely for your own good.
Quote from jimrockford:
You assumed that I used a demo. Your assumption was incorrect. If that disqualifies me from offering my advice, then I will gladly stay off your thread. Now go do you homework. Stop relying on others to do it for you. You need to spend hours and hours reading through ET archives about how FX brokers do business. You need to read "Reminisciences of a Stock Operator" by Edwin Lefevre. Maybe you should also read "Extraordinary Popular Delusions and the Madness of Crowds". You need to understand how competitive markets work. You also need to understand frauds and delusions. Good luck.
P.S. If you feel my words were harsh or insulting, then let me assure you it was purely for your own good.
I'm doing my homework. Part of it is to ask qs on forums. Now, the response I'm looking for is:
"I traded X\Y broker's demo then switched to real acc. The real acc behaved\didn't behave like the demo." How hard is that?
Quote from jessieblue:
I'm doing my homework. Part of it is to ask qs on forums. Now, the response I'm looking for is:
"I traded X\Y broker's demo then switched to real acc. The real acc behaved\didn't behave like the demo." How hard is that?
Seriously Jessieblue, the response is given to you already by others on this thread...and in fact given by many others if you do a search on it. I seen it been answered a few times here already now and else where in the past when I started without asking the same question....but just doing searches all over the net. btw, read between the lines ..or between posts to get the drift.
10 people can give you 10 different answers...or 5 will give you yes it behaves, and another 5 will give you no, it doesn't behaves the same.. so now, what you are going to do?.. do more search? or ask more questions until the odds are over 6 people say it behaves and 4 say it doesn't then that's when you will take the 'plunge'?..
Some demos doesn't behave like the real thing such as hotspot..(that's what I heard from my research..not from my experience..so I can be wrong.. because from my search in the past, people said they never experience the difference while others say they experience the difference between live and demo).. And also same with FXCM.. I recalled many people experience bad results when payroll and stuff comes out as in their limit orders don't get filled... while some experience it well..and sitting next to that guy too. Why the difference? Can be they are scalping or doing a straddle or they can be doing manual execution or entered in limit orders instead of market orders. You do your own due diligences...
So at the end JUST try it out yourself and see. Everyone's luck and experience is different. So if you tried and it works out, GREAT.. if it doesn't, it's learning experience. Like I said.. read between the posts and the lines..you say you are a smart guy.. so you should already get the point of what people are saying.. unless you haven't done much research on it yet. Read more posts by doing searches and you will know what I mean by reading "between the lines"..or between the posts.
One more thing.. some people on ET don't even trade and just like to lash out on others.. while others are veterans...and even the more veterans won't waste much time with a question like yours..because some believe fx retail traders are suckers automatically. (if you want to know why, do more searches.. why else some just blurp out stay away from FXCM... or if you use FXCM, you need to have your brain checked.. I recalled this comment somewhere in ET.... or something like most forex brokers take the other side of YOUR trade.. ).
So hope this answers your question.. If you like FXCM and think you did your research already and think FXCM is good.. then go head and try it live, PERIOD.
Quote from bwc:
Seriously Jessieblue, the response is given to you already by others on this thread...and in fact given by many others if you do a search on it. I seen it been answered a few times here already now and else where in the past when I started without asking the same question....but just doing searches all over the net. btw, read between the lines ..or between posts to get the drift.
10 people can give you 10 different answers...or 5 will give you yes it behaves, and another 5 will give you no, it doesn't behaves the same.. so now, what you are going to do?.. do more search? or ask more questions until the odds are over 6 people say it behaves and 4 say it doesn't then that's when you will take the 'plunge'?..
Some demos doesn't behave like the real thing such as hotspot..(that's what I heard from my research..not from my experience..so I can be wrong.. because from my search in the past, people said they never experience the difference while others say they experience the difference between live and demo).. And also same with FXCM.. I recalled many people experience bad results when payroll and stuff comes out as in their limit orders don't get filled... while some experience it well..and sitting next to that guy too. Why the difference? Can be they are scalping or doing a straddle or they can be doing manual execution or entered in limit orders instead of market orders. You do your own due diligences...
So at the end JUST try it out yourself and see. Everyone's luck and experience is different. So if you tried and it works out, GREAT.. if it doesn't, it's learning experience. Like I said.. read between the posts and the lines..you say you are a smart guy.. so you should already get the point of what people are saying.. unless you haven't done much research on it yet. Read more posts by doing searches and you will know what I mean by reading "between the lines"..or between the posts.
One more thing.. some people on ET don't even trade and just like to lash out on others.. while others are veterans...and even the more veterans won't waste much time with a question like yours..because some believe fx retail traders are suckers automatically. (if you want to know why, do more searches.. why else some just blurp out stay away from FXCM... or if you use FXCM, you need to have your brain checked.. I recalled this comment somewhere in ET.... or something like most forex brokers take the other side of YOUR trade.. ).
So hope this answers your question.. If you like FXCM and think you did your research already and think FXCM is good.. then go head and try it live, PERIOD.
Ok man, you are right about reading between lines, I learned that quick on ET. Anyway, I'm doing research everyday, but of course, I'll have to go live for the real answers.
Untill then tho, I'll still ask some probably stupid questions for a seasoned trader, then will have to diferentiate between answers like you said.
Thanks for your feedback.
Hi. In my opinion the greatest difference you'll find between trading live and trading demo has nothing to do with your broker of choice and has a lot to do with you. The reason why making money on demo is easy is because there's no real money involved, there are no nerves, patience is unlimited.
As soon as you get real money involved you get your emotions involved, that's the problem. The hard part about trading live is doing it with cero emotions involved, without fear, anxiety or hope.
While you're in a trade you should look at the market as objectively as when you're standing in the sidelines, otherwise you're doomed to failiure.
Try reading Mark Douglas' Trading in the Zone.
and about the broker, I like cms, trading directly on the chart... good.
As soon as you get real money involved you get your emotions involved, that's the problem. The hard part about trading live is doing it with cero emotions involved, without fear, anxiety or hope.
While you're in a trade you should look at the market as objectively as when you're standing in the sidelines, otherwise you're doomed to failiure.
Try reading Mark Douglas' Trading in the Zone.
and about the broker, I like cms, trading directly on the chart... good.
Quote from mrejohnson18:
I am interested in your comment. Would you please speak on (write on) the advantages of trading as an LLC over trading as an individual? Or would you direct me to information regarding that? Now that I am consistently profitable, I am considering trading as a business entity. Thanks in advance.
Go to the following link, and you will see why I'm using an LLC: http://www.elitetrader.com/vb/showthread.php?s=&threadid=58963&highlight=zonetrooper