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

[Charvel]

I agree mostly with this post except I think you should go even lower than $1 a pip, at various brokers you can get down to a penny a pip, great way to learn and it won't break the bank.

Originally Posted by ajhardesty

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.

[MarioX]

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

Yes - it is OK to trade DEMO. Actually there is no other way to learn anything. Trade, trade, trade. When you can earn on regular basis you can move to LIVE trading. Trade there with as little positions as possible. When you feel comfortable you can rise your stake. And so on and on...step by step.

[4ncurnce]

I think it is good to use a demo for about a week or 2 to get used to entering orders and modifying or canceling orders. Demos are also good for trying some new strategies out in real-time as it is always easy to curve fit a trading system using historical data. That said at some point you need to have some "skin" in the game. There are plenty of people that offer micro accounts to start with that a person would be risking pennies per pip. You need to have some money at risk to simulate fear and greed and this is the only way that I know how it works. I know many a trader who have made alot of money on a trading simulator but when it comes to trading live cannot do it. please see trading pyschology forum section to back up this point.

[sophie87]

virtual money trading is a joke..

[finvik]

, I have done this, when I didn't have enough to throw in everything I thought was a good investment at the time. But now do as I think you intend (as by reading your psot) Really believe that you have money in these things-REAL research-keep amounts in/out written down.for a forex beginner it is indeed a great way to learn!

[Horden]

Even with some experience I have some virtual portfolios. Often because I make more bold investments, and can see how they turn out give it a try, you'll keep using it!

[Horden]

Oh and I forgot, for beginners this is an excellent tool to learn ... because a lot of traders "follow" a stock and say "Oh look I wanted to buy that", but that's just lying to yourself since you haven't set a real price were you went in!