Why demo performance is often better than live performance?

[Kingston]

Because they have more at stake with a real account so the psychological factors come to play.

Yeah, and managing emotions is the biggest challenge you face as a newbie.

 

[Terry_8]

Cause demo has no real emotion and live simulation is difficult and not as easy as demo.

That's right! No emotions and no real money at stake.

 

[vicjon1995]

The fear of losing your heard earned money affects your trading decisions and also there is some difference in the market conditions in a demo and a live account.

 

[Zeenat shein]

Demo accounts are where most people learn how to survive the ups and downs of trading financial markets. However it’s useful to keep in mind the differences between demo trading and live trading. Demo accounts are usually offered by brokers with the best possible terms and fees – conditions which may not transfer to live accounts.

 

[hk_09]

It is because one is under no stress to save his money from being lost and so emotional panic is at zero level.

 

[rickfx]

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?

Mainly, because there are no emotions in trading demo. But when it comes to real money, novices tend to panic with every pip movement.

 

[Dora_WalletInvestor]

I agree with all of the above who said it's because there are no emotions involved in demo trading. I personally believe we can adjust our thinking to some extent and try to treat the demo account similar to a real account as much as possible. Regardless, it's good to know that you might achieve better results with demo trading than real trading, knowing this can help manage our expectations.

 

[DamianSimen]

I'm new into trading and i currently trading with Demo since demo is a tool for practice before going live, and demo account is easy compared to live.

 

[bottomhigh]

You forget to add that on demo account we have instant execution, it means good share of transaction costs go away and simple momentum strategies turn profitable which would never be profitable on live account.

 

[danielbro]

Becase you will not have to deal with emotion? Haha, I will say that I do enjoy trading in demo for the backtesting, but other than that, it is pretty pointless

 

[Petrick Liman]

Because Demo is not about real money. But if you just want to start with Demo, choose AMarkets, they have special promo so that you can transfer your demo profits to real account.

 

[Akwin]

Blessed Day,

Hope all is well.

It would be my pleasure if you give me the opportunity to express my beliefs, demo account is really helpful for practicing, and learning from your mistakes without losing real money, you will trade under no pressure unlike live trading you will trade where sometimes you lose due to pressure. Your point of view matters.

Best Regards,
Akwin

 

[Jerry_Ken]

Pretty Obvious. Because we don't trade with real funds on demo and that's why emotions such as fear, anxiousness etc stay away and we are able to trade much better. But that's not the case on a live account because now our real hard earned money is at stake.

 

[sevenone]

There is no burden for us as a trader, and sometimes we as trader open a transaction and only that.

 

[Petrick Liman]

There is no burden for us as a trader, and sometimes we as trader open a transaction and only that.

What transaction are you talking about?

 

[Viceroy]

In demo account virtual money is involved whereas in a live account real money is involved, while trading using demo account you are not emotionally attached you don't have fear of loosing that's why demo account performance is always better than live account performance.

Totally agree with you!

 

[e_abrams]

If it doesn't reflect live trading conditions how can one trust the strategies developed on it?

 

[Todor]

Demo performance is better than live performance because the risk and real money are not involved so the trader stays calm while practicing on demo.

 

[Dora_WalletInvestor]

If it doesn't reflect live trading conditions how can one trust the strategies developed on it?

It mostly reflects real trading conditions in the sense that you can test your strategy on real-time market conditions (as opposed to just historical data). There are a few hardships in real trading that it doesn't reflect, but you can still test if your methods themselves work well.

 

[e_abrams]

That is what I meant too. Which is why, I think, it can also be used as a tool of learning.