Profitable Demo Account Trade, Real Loss Trade Account. Here We Explain Why

For demo trading to be beneficial, there should be no difference between a demo account and a real account. We need to use the same trading plan with the same risk limits, the same strategy as if the demo account is a real account. Many use it for fun only, because that is why many traders are successful in demo accounts but fail in real accounts. Why?

# Capital Ratio

First different capital ratios. Start a demo account with $ 50,000 and open a post as you please while maybe the trader does not even have that much capital to start trading. So when opening a demo account, choose the appropriate capital that is closer to the actual capital that you can invest.

Indeed many brokers give us more virtual money than can be held to open a real account. This is to ensure that traders feel comfortable during trading, but it also means that many traders will trade with a more relaxed and relaxed attitude than what they would do with a smaller amount of capital.

Therefore, a petty trader who may not have $ 50,000 as capital to start a forex trade, losing $ 10,000 in a demo account will not look as real as losing $ 10,000 in real money. As a result, traders will be overconfident when making a profit and gain a low understanding of risk management; which then led to a very disappointing performance with real accounts.

# Play

Secondly, many people take the attitude of a demo account like playing a game while a demo account is not a game. If you do not approach them with discipline, it may not be anything other than a marketing tool for brokers, which will tempt you to open a real account with them. If you trade a demo as if you are a millionaire with a large number of funds to trade and you lose, this is a clear sign that the results will not be in your favor when you trade a real account.

Indeed, as human beings, we are more likely to overestimate our abilities. Disciplined trading demos and journal reviews for reflection and correcting misunderstandings in trading, can easily make us overconfident and make unrealistic decisions.


# Purpose

Third, we need to remember that demo trading cannot be a substitute for real trading in any way. We profit a lot no matter in the demo, still can not withdraw. We may be able to deceive people by taking screenshots as if we were trading hundreds of lots. But until when do we want to deceive ourselves when our career in forex is nowhere to be found.

Demo accounts are just a tool to test a broker, ourselves or a new trading strategy. Real market conditions and current liquidity in real accounts can lead to different degrees in terms of slippage and quote than what is found during the trading demo. Also, the emotional stress of demo trading usually has very little to do with real experience. No matter how small the real account, it is a real fund that you lose when you lose or can withdraw when you make a profit.

# Conclusion

In conclusion, demo trading is the best way to learn about the market and test your trading system. It is not intended to replace real trading and there is no amount of success or confidence in demo trading that can match the real market conditions in real trading.

As long as we use it for the purpose it was created, i.e. test and experiment, it is very useful. But when used outside of that, it can also wreak havoc on your career as a forex trader in the long run.

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