Difference between real and demo account?

[gbp]

I have had several demo accounts, and "made money" with them easily.

Now when I have a real money account, I'm losing, a lot! What's going on?

Has this happened to you? What is the difference? why win in demo consistently, but lose big-time with real account?

Help! Any advice welcomed.

[ownshook]

Trading with real money..there is always a difference. Bigger expectations perhaps? Is your money management in check? Is your current balance the same as your demo account?

Far from an expert in forex or psychology.....there is something about using real capital that changes the approach to trading. What I did...and still do when testing some other aspects of trading...is use a broker that allows me to use any size trade I like instead of the standard lot or mini lot.

For example...I am trying something new with the jpy and am using...instead of 100k or 10k.....I am using a fraction of that. Now....the money made is not the issue....for example up 47 pips right now and that equals .24 cents in profit. Now...I can see my real money balance (I funded this account with $50.00) going up or down. That forces me to maintain strict money management and not enter every trade that may look good but really has no basis for entry.

Until you get everything sorted (and this is not a recommendation whatsoever) , I personally would not use more than .5-1% in any trade...but that is just me.

[Llamedos]

Hi GBP – sorry for the delay in responding to your post but a good dose of the ‘flu has laid me low for a while.

The answer to your question ‘What is going on?’ is pretty simple to answer but more difficult to put right.

In short you have a ‘fear of loss’ that is making you trade in a different way (with real money) as opposed to when you were trading with the demo account.

In order to correct this you need to analyse your demo and real trading and look for differences in the way you trade with those accounts.

The sort of thing you are looking for is –

Are you using tighter stops?

Are you exiting losing trades before they reach the same criterion as you used when you were trading the demo account?

Are you getting out of profitable trades earlier and so not making as much profit which, in turn, will help to offset losses and improve the bottom line?

Are you using the same risk profile when calculating stops? If you risk less dollars with the same size lot, your stop will be closer and more likely to get hit.

Are you taking the same trades? Sometimes, with real money, it can be difficult to take the same ‘risky’ trades that you would have opened using pretend money. Sometimes these risky trades can be real winners!

As you can see, there are plenty of areas where you could have changed the way you trade and any of these can make a big difference to the bottom line.

Hope this helps.