Demo Trading

[Davidee]

Hello,

I was wondering what people's opinions on demo trading were. Do you believe that demo trading is an important step on the road to learning to become a successful trader? Or do you believe that demo trading is so different to the real thing that it is a complete waste of time and will teach you nothing?

 

[bbmac]

I think it is useful in this sense, use it as part of a progression ladder to get to where you want to get to, ie devise a plan such that starting in demo - if you achieve consistency and a positive expectancy in your demo trading move up to small live a/c and so on...have a plan and progress thru it, if you fall apart at one stage you can always drop down a level.

You might find, as many do that even if you think you have a trading edge; having one and actually trading it to achieve it's potential may be 2 seperate things, ie what Mark Douglas calls the 'profit gap'..and assuming that you do have a trading edge in theory it is mainly the learning of the necessary psychological skills that closes the gap.

G/L

Hello,

I was wondering what people's opinions on demo trading were. Do you believe that demo trading is an important step on the road to learning to become a successful trader? Or do you believe that demo trading is so different to the real thing that it is a complete waste of time and will teach you nothing?

 

[Rhody Trader]

To my mind, demo trading is good for 3 things. 1) learning the very basics (if you're brand new), 2) learning how to use a broker's trading platform), 3) testing out new ideas.

I personally suggest to new traders that they get into live trading (with a VERY SMALL amount of funds) as soon as they've done 1) and 2) so they can understand they head space they'll be in when real money is at risk because demo trading just cannot fully replicate that. Once they have an idea of how they'll feel during trading they'll have a better idea of what kinds of strategies will best suit them and which ones won't.

 

[glyder]

Demo makes good sense to me, make good use of it. If you are a beginner why lose more money than necessary while you learn?
Eventually you'll have your system/method and that is the time to put in a small amount of money. As bbmac says this is when psychology begins to kick in.
Start with small pot and build up gradually.

 

[China Diapers]

Thanks bbmac,

I've thought more about demo trading and written my thoughts on my blog demo trading accounts

At first I thought you must be selling something but that's a very interesting blog,

 

[Apothecary]

I think demo trading is good to try out a platform, but that's it.

If you want an analogy:-

You want to learn to drive so you get a car and give it a spin in a big empty car park, you think you have the hang of it, so you then try to drive home in rush hour traffic. Yeah, good luck with that.

 

[Davidee]

At first I thought you must be selling something but that's a very interesting blog,

Thanks China Diapers, the blog is just my random thoughts, tests and experiments. I write it primarily to solicit feedback in order to improve my trading.

 

[fayalac]

Hello,

I was wondering what people's opinions on demo trading were. Do you believe that demo trading is an important step on the road to learning to become a successful trader? Or do you believe that demo trading is so different to the real thing that it is a complete waste of time and will teach you nothing?

When an experienced trader finds out a problem with his method, he start looking to make the necesary adjustments. Depending on the method he is using those adjustments can be simple or complex things. OIne thing is sure, inspite of the problem he is trying to adjust, his method is laready working, so what he, probably, will do id to make the neccesary corrections and while he is confident about those changes he will be working with it at a demo account.
Demo trading can be as good or as bad as you want.
If you do understand that at a demo account you will not loose money and you take risks that you would not take in your real account, if you dont try to manage that demo account as it were your real account, then you are wasting you time and you will not have any benefit at all using a demo account. it is up to you the way you use it, and depending on the way you use it you can have a huge advantage or not.
Many traders dont use for simple changes, lets say when they decide to change their stops or limits.
Demo trading is a geat tool.