In what terms demo account is replica of live account in forex trading. I feel like I'm much more profitable in demo rather than live account. I wonder is the execution of demo same as live? Or Putting it simply is demo has the same environment as live account?
What set demo different from live is the psychological factors of losing the money. In demo, you had a mindset that those are just virtual money and losing it may make you feel upset but moving on. You will not do the same with real money.
Demo account is only a replica of live account when 1) the forex broker is closer to an ECN and NOT a pure market maker which affects the execution speed and quality and 2) your trading style is not scalping and is of more longer timeframe (the longer the timeframe the better) then there is a chance that whatever you see in the demo account is what you are going to get in live account or at least very close to it.
I think a demo account is a must for beginners. This can help them avoid losses, and most importantly - will help to understand the essence of work in trading.
IMO better than a demo/paper account is to trade real but very very small money, eg R = 1/20th of 1PCT of your account. For me at least, the psych/neuro-motor difference between risking 0 money vs risking real money, no matter how small the $, is huge. Demo/paper just does not feel real. My risk-sensitivity function is something like a utility function in the zone btw near-0 and ~1/2 % risk, then goes convex as money risked increases. Perhaps this is a typical experience ? Though just to get used to the mechanics of trading, demo/paper may be best, but only until the mechanics are a reflex.
I think a demo account is only for begginers for practice purposes. If you want to be a good and successful trader then you must start trading and practicing with demo account to get some good experience which will be helpful to trade live trading successfully.
well if you cant make money in demo then you do not have a chance in live. but if you make money in demo... does not mean you will make money in live. this is a fact: Why is this so? i dont know but it may be because no one likes to lose and even if it is money they do not care about ,the pride of man comes into play: no one wants to be loser.
Usually, demos are used simply to get used to the platform of another broker during the transition. There are no other reasons for experienced traders to use a demo account, in fact.
Thank you everyone for your reviews. I understand it is same as live in terms of pricing and spreads. Right?