Trading in Demo

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Demo Trading Accounts

Demo trading serves? What is the benefit of demo trading accounts. So the subject of opening a demo account and trading with virtual money has it’s because, but it is not what clearly guarantees that, in the case one were profitable, then it you will also be with real money. Let’s say a demo account is definitely a good gym, I recommend it to both traders discretionary to both systematic traders. First of all, the demo account is used to familiarize yourself with the tools, to understand them, to get to know them and then to be able to evaluate what impact they actually have the movements on the account, which is not a trivial matter.

Trading With Demo

Then while on the one hand the discretionary trader will learn with the demo account to manage his own setup and so on, the systematic trader will have to somehow get things done live his strategies in demo. This step is important to verify in the field if the strategies do not contain software bugs that made the back test look nice, but then in reality they fail to produce the same results. An example is a system built on Renko bars, very beautiful in back test, then when you go live does not work at all and this is also verified on the demo account, then definitely becomes important.

Unfortunately the demo account does not allow, except for pathological cases such as myself I will say, to manage emotions. It is a bit like a sportsman who trains, in training he is fine then when he is in the race he fails because the stress of the race destroys him. The same thing can happen when you put real money and then that extra step it is worthwhile to face it a little at a time, with real but small money accounts, where you risk little, where you risk money that can be lost easily and that does not affect much neither on the budget nor on the psychological weight they can cause. This is a bit what counts, so demo yes, both discretionary and systematic, obviously I am systematic so I see it from that point of view, it serves above all to identify any bugs in the systems you have created.

Benefits with Demo Account

For the rest unfortunately the demo is not enough to have the certainty, if profitable, of being one also in real, also because sometimes the data flow of the demo account is not exactly that of the real account, so this is a detail that should not affect too much on the progress of the systems, because in the end if enough, just a little to mess up everything is not a good system, but it must be taken into account, this could also happen. So guys, demo absolutely, go with your feet of lead, but know that not enough and then the pain comes when you put the money in your wallet. So, what you trade and the results of your strategy depends a lot on how the market behaves.

What is the context in the market? If you try that works well in one environment, and then the environment change, then it’s not going to work too well. And that’s what people that trade like really well in trend. In demo for example, and go into live and it’s a seller’s market are going to get crushed. So, you wanna be very careful and you want to be aware when your schedule works the best. Is this in a trending market? Is this when it’s sideways? Is it when it’s like high volatility or low volatility? If you can figure this out, then your results are going to be better of course. Because you know exactly what to expect and when would be a good time to stop trading and go back a little bit, stop trading, and we can go more full in and take more trades.

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