Why Demo Account Performance Is Often Better Than Real Account Performance?

[WatanFX-Rep]

Hi all,

Most of the responses in the thread for some reason reflect newbieness.

The difference does not occur because there is a maths problem or brain neurons work differently in a real account. A number is a number.

Retail brokering is not about client's interest. The retail industry - forex and stocks both - is setup in a manner which systematically discourages customer's ability to generate alpha. Please remember that MetaQuotes is primarily a market making/e-gaming software company for small brokers - business entities that make their own markets with small time depositors. Regulation element is just customary or used as a good quality make up.

Frankly I am surprised MetaQuotes has not worked on competing with Spotware, which is a binary options gaming software company. It controls 60% of the binary options gaming industry.

This however does not happen quite often when an institutional portfolio is involved. Large funds tend to trade directly with the prime brokers, or have direct relationships with dealer ie Barclays, UBS etc.

Just to be a bit flexible on this topic, without inviting a legal show cause notice, institutional slippage is a whole lot different from retail slippage.

There is just so much to it, that one cannot lay out for the common folk, without getting into some serious trouble with the elites of this industry.

 

[fxstrategist]

Very interesting points of view from everyone, but it seems like psychology is the main reason.

 

[AliKhan]

90% people are successful while trading a demo account..... But only 5-10% make money with real accounts

 

[fxstrategist]

Psychology is the main reason, Demo servers and Live servers operate differently, it could be a combination of both.

 

[KingTraderNathan]

I totally agree with this article. The fact that you are trading for free and you've got nothing to lose make it easier to trade carelessly. So it is totally psychological and when you are trading real money you tend to be nervous.

 

[fxstrategist]

Its not the platform or MetaTrader, some people are being succesful trading live on Metatrader, its the psychology.

 

[Pharaoh]

Of course, there's also the possibility that a broker might run the MT4 Virtual Dealer Plugin (VDP) with reversed settings on demos. Imagine if all those brand new traders got the best possible during a 1 second delay on executing their demo trades. False confidence is built and then the deposit money rolls in.

 

[dianajs]

That was a very interesting read, thank you for posting it.
I would like to add one thing - the fear of losing may not always be caused by somebody's ego, but also by somebody's insecurity. "I was wrong yesterday, what if I am wrong today again?", etc. It's a very toxic way of thinking.

 

[FaisalXM]

Good information. Thanks for posting