It is extremely normal for someone to perform well on a demo trading account but then feel unprepared when they open a live account. It’s important to remember that when actual money is on the table, there’s more strain than when they’re demo trading. It’s perfectly common to have a few weeks, or even months, of rough roads.
There is one substantial contrast between demo and live trading, and that is the fear factor, which alters our perception of the market. One is likely to have taken every trading signal available in the demo account. Many traders, however, do the contrary in live trading and begin to rethink each trade.
If the demo trading period was comparatively short, the shift becomes more challenging. Market conditions fluctuate frequently, so a trader who just spends a month or two on a demo account is unlikely to be equipped for the different circumstances that the financial markets can toss at them.
A trader who is using a demo account to trade throughout a period of high volatility becomes accustomed to large movements and starts to anticipate them. Even when the volatility decreases, traders tend to believe that every trade will culminate in a large price swing. The trader’s flexibility to adapt will have been hindered. A trader who demo trades in sluggish economic conditions but opens a live account in volatile market conditions could face similar issues.
It ought to be easy to go from demo to live day trading, but it is often difficult. It is necessary to ensure that one has rehearsed and has a plan in place for all market scenarios. Begin with the lowest position available when trading on a live account. After trading larger positions on the demo account, it might feel like a small setback, but one cannot afford to allow nervousness to influence their judgment. With practice, one can gradually increase the size of their position without becoming anxious. Work on such aspects and the shift to live trading will probably be much simpler.
This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. Trust Capital does not take into account your personal investment objectives or financial situation. Trust Capital makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast, or other information supplied by an employee of Trust Capital, a third party or otherwise.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Trust Capital does not offer Contracts for Difference to residents of certain jurisdictions including the USA, Iran, North Korea, UK, Czech Republic and Belgium. Please consider our “Risk Disclosure“.