I know demo dosen't or can't mimic the psychological effects of losing your own money but it's a great way to cut your teeth on the technical side of trading without risking capital
demo is important , no way to ignore but the result of trading can be useless if there is no seriousness.
"For the trader operating without a trading system, all we can do is wish him luck. But when you have a system in place, little luck is needed. Live trading becomes more of a test of character and resolve than a roll of the dice. Like most new traders, your greatest test will be on the emotional front. Your emotions will rise and fall with your wins and losses, along with the ebb and flow of the markets. This is a dependence you must break. While you cannot smooth out the markets (and nor would you want to: market swings are the key to profits), you can learn to smooth out your reaction to them. It just takes time and effort. And a consistent application of your swing trading system, even if that goes against your 'better' emotional judgment" http://www.swingtradesystems.com/live-trading-main-page.html
early stage of my trading career i was very profitable in a demo by support and resistance but when trading in a live i never found the result according to demo experience.
If you are in your early stage of trading career or just started, better to trade with a demo account only. Use it to learn and test strategies until you find one that gives you an edge. Then, you can move to live trading.
Beginners should always start their trading career on a demo account and create a trading strategy that suits them. Even while trading on a live account prefer trading small accounts.
Yes, beginners when switching from demo to live should start on a small micro/cent account so they arent committing too much money and it is less risky for their account.