Why demo performance is often better than live performance?

Rambo35

Confirmed PaxForex Representative
Apr 22, 2013
909
13
32
Canada
In the casual world of free demo accounts - many young traders find they are able to garner impressive profits without a significant amount of effort. It almost seems too good to be true. But transferring this success from a demo account to a real account is far less common. Why is this?
 
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toretton

Trader
Aug 9, 2014
94
0
22
Italy, Milano
Yeah...Smtimes I'm just thinking its all about the psychology... It's like when u r just in a class you are doin good and at the test - u fail. Maybe its because of pressure..I hope u see my point
 

nalu

Confirmed ProfiForex Representative
Sep 3, 2014
59
1
17
In demo your real money is not involved so you will not attach your emotion to it so even when you lose you are not at loss. But when it comes to live trading and you need to deposit money your emotion set in,and that fear and greed for profit will start affecting your trading output.
 

fxapex

Active Trader
Jun 7, 2013
258
7
29
There are many brokers who has these kind of bias in both these account, but if you open an account with a reputed broker you might not find this kind of difference.
 

triplet

Active Trader
Oct 7, 2014
101
2
27
Most trader excel in demo because their real money is not involve and so they are not affected emotionally. But when on live trading fear of losing money contribute to not doing well in trading.
 

Fxpipper

Master Trader
Oct 26, 2011
1,132
1
49
Some brokers' demo platform varies widely from the real one, and gulls the newbies into making the jump to live account even before they are ready..
This is one of the reasons why some of the newbies trade better on demo than they do on real..
 

inggo

Master Trader
Jan 13, 2012
474
11
59
Philippinese
trading psychology is a big factor, people tend to do some risky things in demo coz the money aint real and the fear of losing is not there, another thing i guess the demo is quiet different from live, in terms of execution, and slippage, and other things that the crazy live environment has to offer, lol. but demo has its uses, i still trade my hotforex demo account. at times i trade it just for the sake or releasing some stress.
 

vicknic

Confirmed ProfiForex Representative
Jan 21, 2014
207
1
39
Netherlands
www.profiforex.com
The psychological aspect might be true, but there are other factors at play. In a demo account, the fund is often available to use and often times we read newbies making high profit on a demo account. If they have same capital on a live account, there is a possibility that they can replicate same success.

Another factor is the Demo execution. Some demo account platform are nothing compared to the real market execution, and this is why you may not experience slippages, freezing, or even requote. This things are present in a real account and can affect how you trade.
 

seekfxhelp

Banned
Nov 11, 2014
28
0
0
Some things I know of two types of accounts are

The first fact is that the market does not care and never knew my mercerfx account, whether it's live or demo account, do my balance increased or decreased. The market will remain that way, up and down, trending and sideways. loss condition may be due to the way we were mistaken in addressing market conditions, it could be perhaps i am less objective and try to control the market with excessive predictions.

The second fact is that when my trading in a live account is not focus on the trading process, but more focused on the amount of profit or loss that has been and will be obtained. Although i have made a trading plan and implement strategies and money management is exactly the same as when in the demo account, but i do not always do what i should do. The risk that i set will greatly influence my emotions. i feel unprepared when the funds of mine suddenly disappear quickly. People's behavior change when dealing with real money. As in my mercerfx demo account i can discipline may run a trading plan, but turn plunge with real money, you are so emotional and always intervene in your trading position. You tend to ignore the trading plan until the trading process so chaotic. That's the reality, especially if it is your first time you open a live account and trading with you allocate funds to trade forex or funds that 'ready for lost'.
 

jezzykid

Banned
Nov 21, 2014
37
0
0
I guess when money becomes involved in trading, people starting getting anxious and nervous and making non calculated trading; I think greed may also be a contributing factor to this.
 

Bilal Jafar

Newbie
Nov 30, 2014
11
0
2
It's obvious.. there's no any fear in Demo. You can trade like a million and earn even more but your mind already knows it's just fake currency so there's no fear neither any joy. that's why your performance is much better
 

alexflemj

Active Trader
Nov 9, 2011
69
1
27
demo trades are alyways filled at the other end, while real experience can be a little different, anyone ever seen slippage on a demo account? ;)
 
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KhalafDagher

Trader
Sep 5, 2014
4
0
12
It always nervousness is the prime factor as it is been said in this thread. i would like add another which is virtualness. As future pilots do practice in flight simulator which counts as many as possible factors but still they cannot simulate actual external factors. Similarly demo has considered as many possible factors but actual scenario cannot be simulated.
 

bablogfx

Confirmed HotForex Representative
Oct 24, 2013
190
2
27
No it is not the case. Demo execution doesn't feature with slippage, spread widening, requotes, etc., while on live you can feel how market tension may affect stability of your trading..
 

duxingxia

Trader
Jan 30, 2015
51
1
7
China
No real money in demo account, and you can feel free to test strategy and trade under no pressure. But for live account, sometime under pressure lead to lost.
 

ESinvest

Newbie
Feb 12, 2015
31
0
2
There are some factors that affect live trading that are not in demo, that's why people should take it easy with live and use demo only for their practice.
 

satriafx

Banned
Oct 7, 2013
34
0
0
heaven
But some most of people while trading in demo, they never serious to use demo account for learning. And then in real trade, they do not have enough emotion management and make their real trade going worse.
 

inggo

Master Trader
Jan 13, 2012
474
11
59
Philippinese
yeah some treat demo as nothing, and get all hyped and reckless on live., thats a classic and it can happen to any of us.
 

fxapex

Active Trader
Jun 7, 2013
258
7
29
If you have an account with a good broker than such things doesnt happen but i ve read that most of the brokers just to attract clients make demo accounts respond faster.
 

Fxpipper

Master Trader
Oct 26, 2011
1,132
1
49
Demo's should be primarily used to develop strategies, to find out how the market works, to learn the ropes, that's about it. It does not reflect live trading conditions accurately and more than a few brokers demo accounts are really one for the books, smh.
A trader is better off going live with a small seed dep, rather than depend on demo acc for trading exp..