MoneyTec 2.0 - Online Forex Traders & Brokers Social Networking Community » Trading Methodologies » Trading Psychology

[MohSETH]

Hello everybody
I'm just wondering...
Is trading with virtual money efficient? In a way of learning MM and psychology of trading? Everyone know that we can use a demo acconut to explore hot to order a trade or sth like this. But to learn how to realy trade we need real account with real money... Do You agree with me?
Best regards,
MohSETH

[kenazen]

When a pilot learns to fly airplanes, he first practices in a flight-simulator.
Then he flies with a flight-instructor. Last he flies solo.

The Demo accounts are the flight-simulators, experienced traders are the flight-instructors, and you're real account is your airplane.

Eventually you have to fly solo, but there is nothing wrong with practicing beforehand.

[ajhardesty]

Originally Posted by MohSETH

Hello everybody
...But to learn how to realy trade we need real account with real money... Do You agree with me?...

Yes, agreed, but there is a lot to learn before you put real money on the line. You want to become very familiar with your trading software, your broker, and the markets you plan to trade.

Bottom line: Do not invest real money until you are very comfortable you know what you are doing. But don't expect real money trading and play money trading to be the same. They are not.

[EasyJim]

I have traded with virtual money only for three months. Then I opened a mini account almost a year ago. It is a big difference. Correction – huge. I try to get used trading with real money. So far for this year (2006) I am 23 – 19 – 7 with one open (a mistake during the weekend), and +70 pips. In about 2 months I think I will feel comfortable to open a regular account. Still have to work a lot on discipline. At least this is my story and my approach. Still have problems covering too late bad trades and to early good ones. If I do 4-5 profitable trades in a row, I feel I am a guru, do mot pay attention to the next ones and they become a disaster.

All these things you cannot learn by trading demo. Trading a demo account for 2 years does not guarantee you will do ok with a regular one. You will still be far, far away. My advice is to open a mini account after learning to use the platform with a demo. Your goal should be not to lose all the money in one year. Of course we are all different, and different things work for us.

…Just some thoughts…



Good Luck

[ajhardesty]

Originally Posted by MohSETH

Hello everybody
I'm just wondering...
Is trading with virtual money efficient? In a way of learning MM and psychology of trading?...

I think I missed the essence of your question with my previous answer.

I do not think that learning with virtual money is efficient. Once you are comfortable with the software and the market, you should move to real money as soon as possible. BUT....

That doesn't mean you should immediately trade in lots or mini-lots, because that can be an expensive way to learn. There are brokers who do not impose minimum trades, i.e. you can buy/sell any amount you desire, even down to a $1 trade. That allows you to trade real money within your comfort zone, but it still counts because you have real profits and losses. And you are learning real money management and experiencing the psychological pressures of real trading. It may also give a better understanding of leverage and risk/reward ratios.

Also, many brokers allow you to have a demo account with no expiration when you open a live account. That allows you to jump over to the demo account if you want to try out new strategies or methods with $0 risk.

[ohioguy]

The important thing is that you treat virtual money with the same respect as real money. If you don't, any simulation that you do is worthless. You still have to practice good money management.

[buckeyefan]

If you are not confident that you can turn a profit, stick to trading with virtual money. There is a large learning curve to currency trading.

[bengalfan]

Virtual accounts are good for developing and tweaking a system. You can practice on them before you put them into use in a "real" money account.

[Rocko1]

Virtual to live trading is like shadow boxing to stepping into the ring, respectively. Entirely different psychologically

[Motivated]

I have been showing friends how to trade and have been interested to see that each person handles the virtual/real trading differently.
1. People who are motivated anyway will take the virtual trades seriously and test the systems and then happily go live.
2. Those who want to make money but dont want to put in the effort will do two things.
a.either give up as they cant really be bothered and grumble about how much money everyone else is making.
or
b.I offer to set them up live and then watch their motivation increase when the risk is real.(and their profits grow )
3. Those who cant really grasp the concept or the software are very happy to go virtual whilst learning. Some may never go live.
Just my observations.
So long as they all do what makes them happy.

[jemmy]

i think that trading demo first is more wiser because you have to practice trading first and get to know all its details ,, then you can trade with real money when u feel that u've become dexterous in it.
http://forexforumnow.com/index.php?P...12&topic=232.0

[pinalli]

I feel Demos are just for practicing tradings and one should not waste much time there. 2 months are sufficient for practicing Forex. We learn much more than Demos with Live tradings as this involves our hard earned money, real emotions, thrill, excitement and most importantly real returns.

No doubt Demos are essential but Live accounts are the real outout of Demos and even if we trade with smaller amount it fetches far more learning that Demos.

My dealer Finexo provides live trading with just $25 which is better than Demo as the amount is small so fear of loosing is less and if we earn then we will get great encouragement.

Regards

[mdtforex]

Trading virtual money is a practical way to get the RULES of trading down (as they apply to your trading strategy). However, you cannot possibly experience the same emotional turmoil from virtual trading as you will when real money is on the line. At some point, you need to trade real money. The only successful traders I've met all cut their teeth trading real money.

Originally Posted by MohSETH

Hello everybody
I'm just wondering...
Is trading with virtual money efficient? In a way of learning MM and psychology of trading? Everyone know that we can use a demo acconut to explore hot to order a trade or sth like this. But to learn how to realy trade we need real account with real money... Do You agree with me?
Best regards,
MohSETH

[Trader Rich]

Demo is always demo. Don't be surprised if you can't replicate the same results when you go live.

[fxlegion]

Originally Posted by Trader Rich

Demo is always demo. Don't be surprised if you can't replicate the same results when you go live.

that means that you have not trained enough,
on the mind and on the method.