Why demo performance is often better than live performance?

[HeavenLeighGill]

The psychological aspect is absent when trading on a demo. Since there is nothing of real value to lose, we are free to trade without emotional interference. With real money on the line, we become greedy, anxious, fearful, etc. which causes us to make mistakes like exiting trades too quickly and so on.

 

[Ávila]

no emotion is attached to demo, it is not real money

 

[yeneffer]

Just like the rest was saying, it has to do with the fact that you already knew that there is no real monetary value being used while trading in demo account. When you are trading with real funds, your mind will be in different state - much more aware of how much is used.

 

[Colin Lewis]

I used to tend to let demo trades run out until they profited. That just shows, with no skin in the game, is it even worthwhile. Demos are great for running tests and strategy but they are counter productive for mental development

 

[Dutchy86]

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?

Usually the emotions of losing your hard earned money

 

[sharabela]

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?

With demo trading, when a trader makes money, he counts it as a success. On the other hand, when he looses money, he does not count it. He abandons that account and open a new one. Thus, it is very different from live trading. A trader needs to demo trading as if he is trading on a live account. Only that is when the result would be same in both accounts.

 

[Jotori]

No emotion is involved in demo peformance. Some brokers manuipulate charts too