FX trading shock for newbies

[Bastian Rubben]

Trading demo might gives you a wrong perspective

I support trading demo for beginners. It would be unwisely to make your first steps in forex or any kind of trading, with real money. Even if you are an experienced trader and you change a trading platform, you have to control the platform before you try live trading.

However, trading demo for such a long time can be very misleading since it does not include what I think is one of the most important thing in forex- the mentally factor.

The mentally factor is the number one cause for traders loses, and you cannot practice it in demo. So trading demo is good for platform-controlling skills, back testing etc but do not expect it to make you a better trader.

I believe that mentality is 80% of the way to success. Knowing how to control your mind is the key for becoming a successful trader.

Good Luck!
Bastian Rubben
Chief Analyst, SunBird

 

[Anita V]

Everyone that has commented on fxtraderreavealed, you bring up very good points. I bow to your wisdom. On the other hand, I don't feel that my trial has been a total waste, I have learned a lot from them. Even though it appears they're using underhanded means of communication to get people to join, they do seem to genuinely want to help. Again, that was just my impression.

 

[Pippin_Minton]

fxtraderrevealed is from the same company as fxlivedaytrading.com.

 

[john Garbett]

The difference between live and demo trading

Hi
I am a new trader, and thought that my comment may be useful to any other newbies out there.
I started trading on demo accounts and very soon found out that I could make a lot of money and be profitable. In fact after a few months of demo trading I found that between 60-70% of all trades made money. those that didn't, I cut them quickly.

I traded on the demo accounts for 18 months before taking the plunge to go live. And guess what happened? the first week of live trading, I made money - reaching my daily target. after the first week, I started to lose money - despite all of the help here from FPA - and kept on losing. This went on for months, and as time went by I thought I should give up espescially when it got to the point that I had lost 50% of my intial investment. After the second week of losing money live, I then went back to demo trading to boost my confidence. I started to be profitable very quickly, back to the 60% -70% level. I then decided to "run down" the demo account to the level of the Live account. I got the demo account to the same level, and guess what. I became profitable on the demo account, but continued to lose money on the live account.

The reason is simple. I kept trades for longer on the demo account whereas on the live account, the minute the trade started to lose money, I cut it taking the loss. If I had hung to the trade, it would have been profitable.

I have only just started to become profitable on the live account, although there is still some distance to go before I get to my original deposit. i still get the jitters when a trade starts to lose and I frantically go through my analysis again to make sure that the trade I placed was the right one. Instead of achieving 60-70% profitable trades, my ratio of success is 35%.

During all of this, I lost so much confidence that sometimes for several days I would only trade on the demo account, and not on the live account.

Believe me when I say it takes nerves of steel and courage to trade live.

John

 

[Andrey best]

Coming back

Hey Guys,
I stopped trading about 2 years ago due to my divorce and all the hell that comes with it. But now I'am ready to get back at it. I know there has been a lot of changes in Forex trading and the simple strategies that I used back then
are out of the picture now. Besides I've heard I cant trade with out of US brokers anymore. Can someone please fill me in with major issues that went on in that period of time? Thank You in Advance!

 

[John P]

Hey Guys,
I stopped trading about 2 years ago due to my divorce and all the hell that comes with it. But now I'am ready to get back at it. I know there has been a lot of changes in Forex trading and the simple strategies that I used back then
are out of the picture now. Besides I've heard I cant trade with out of US brokers anymore. Can someone please fill me in with major issues that went on in that period of time? Thank You in Advance!

The big change was the Franks-Dodd financial reform bill which dropped leverage down at US brokers to no more than 50:1. If you are a U.S. citizen you basically cannot trade with any non-US regulated brokers. So effectively your leverage is 50:1. I've also heard they are taking away spot gold and silver on July 15th. Pretty stupid overall.

I would still say your simple strategies are fine to use. I use price action strategies with only a couple moving averages on the daily charts for trend and S/R identification.

 

[LeftyJones]

I have had good luck with Finfx as a broker they are in Finland, and I live in the US. And I agree just trade small amount of real money dont even mess with a demo account.

 

[ChrisJMan]

IMHO...always trade with real money...start with a micro if need be...but you need to feel the pain even if it just pennies...demo is usually a bad thing...if you can't afford to lose 50 bucks trading a micro account...then you typically have no business trading in the first place.

I think this is great advice, (kinda puts it all into perspective) If ya cant handle to lose a bit of money - you surely can't afford the bigger sums that one could lose outside of a micro account.

Wise words! Thanks!

 

[Soji4x]

Forum member Iono actually makes a very good point.

A demo account is a training tool. Choose an account level that reflects what you expect to be doing on your real account, if any when you decide to trade a live account that is.

Match the account level in your demo to what you expect your live account level to be. If you expect your live account to be XX dollars, try to trade a demo account as close to XX dollars as possible.

I subscribe to this

 

[Pharaoh]

I'll definitely back demo accounts for 2 important reasons.

1. If you are using a platform you aren't familiar with, why waste a single cent while learning what buttons to push?

2. If you have some new system or strategy you want to test, forward test it on demo for awhile. If it's not profitable on demo, trading it live won't improve it.