Forex Live vs Demo Account

A lot of traders say that you should use a Live Account. Because they think a Demo Account is not realistic enough since you don’t have an emotional connection to the money. Because you know it is fake.

If you win or lose with that money doesn’t matter, it’s not going to change your life. Whereas if you have some money on the line, then you have that emotional connection and you start to feel how it feels in the markets. Because of course trading to eighty percent psychological, so it matters how you control your emotions.

Do you think it’s best to use a Demo Account with fake money than a Live Account with real money when learning how to trade?

But, I tend to disagree with this theory that having a certain amount of money in the market is going to be good for you.


I think it’s going to result badly for you if you stick with the Demo Account and I’ll tell you why.

So, first of all, the actual thing of having some money in the market, whether a small amount or not. You’re still not going to care about it. I mean, let’s define small:

What is small a couple of dollars, tens of dollars, hundreds of dollars in a Live Account?

It’s all relative, but whatever is the amount of money you decide is a small amount for you. The fact is that you don’t care about losing it. So you’re not going to have that emotional connection. Because if you lose five dollars, you’re not going to care that much.

But what if you increase the amount of money in your Live Account?. Rather than trading with small amounts, you trade with more significant amounts that you’d get more concerned for the money. You maybe will try to learn a more conservative approach, a more structured and sensible approach sounds like it could be a good idea.

But let me tell you firsthand that is quite a bad idea. When I first started learning to trade, like a decade ago. Back then I used to trade on a Live Trading Account with real money in it. I wasn’t using a Demo account.

“Why to bother?, I’m here to make money, so I’m going to use the money”.

And I blew that Live Account or better-said accounts. Sometimes I won little money, but then I’d lose, and with that. I lose all my invested capital, and I’d have to deposit more money, again and again. I won little money and then still lose all my money. Sometimes I applied funds, and it ran out just in a flash, just like that. In a couple of days without any single winning position.

But I was learning and learning as I went along, and the only time that I used a Demo Account was in between the losses. Right there, in between when I was waiting for a deposit.

But was this an excellent approach to take a Live Account?

Well, eventually, naturally I did become profitable with my live account. I’ve been trading profitably for quite a lot of years now. But it was the wrong approach to take.

Because here’s the thing, when you trade, the emotions that you feel are fear, anxiety. On the other hand, you’ve got greed and things like that.

But talking about the fear aspect of it, let’s say you make a significant loss. You felt the emotional drain of as you losing in your live account real money.

It’s kind of like riding a horse; they say if you fall off a horse when you’re learning to ride then. The best approach for you is to get back up on that horse and carry on riding because and if you don’t, you’ll go away and you’ll digest the fear, and you won’t be able to have the same courage to get a straight back on it in the future.

But trading with a real account is not a horse. Is it?

It’s the same with another sort of extreme sports and stuff. They say if you hurt yourself if you fall off if you get scared in a situation, if you face that fearful situation, you have just to get on and straight away start again. Because if you don’t you probably never come back to it.

And so it’s the same with trading, but the problem with trading is this:

live account

When you keep getting back on the horse, like right after I lost a thousand pounds in a Live Account. Then I deposited another one thousand pounds and went up straight back on a horse and lost it again.

And then again, if you keep losing, and it’s the same as you keep winning as well. Then you get used to it, you get like “immune” to the feeling and so if you’ve lost 2,000 pounds and you’re going to deposit another thousand pounds, and you lose that again.

Then when you go on to deposit another thousand pounds when you’re losing that money you start thinking to yourself; “well I’ve lost it before it doesn’t matter it’s only money I’ll put some more in.”

Forex Trading Psychology

live account

Now, that’s not good mental health to have, and that is the mentality I had to fight with. It even went on as I said, it’s just the same as to be winning. It went on to my charming streets as well.

When I was winning and winning and winning, I thought there was nothing I could do wrong. I got complacent because I thought; “well, that it’s just money it just ends up being numbers on a screen.” And we’re trading, when the money ends up being numbers on the screen, then you can’t trade properly.

You know, the thing about trading; and this is coming from someone who has traded from deficient amounts up to huge numbers. Where I’m risking like six figures on a single trade.

I can say that everyone has their tipping point. And it can change over time as well. For people trading on a Live Account think there’s an emotional connection with money. When its small amounts you don’t have that same connection and even when you get to more significant numbers. Let’s say thousands, you may still feel like; okay your decision-making process changed somewhat.

But you can still think clearly, but it hasn’t changed that emotional connection, is still a small amount of money.

Some people with Live Accounts, when it gets to tens of thousands or hundreds of thousands, that’s when things change. I’ve had to deal with this where you start feeling the anxiety every time you put a trade on, and you have to overcome that.

But you’re not going to be able to overcome that by trading small amounts, and adequately it won’t be until further, into your career when you hit that point where you start to feel that real anxiety and that real emotional drain when you start to lose a trade.

So this gets beyond to the other point, which is that:

If you’re focusing on the money all the time, you’re eventually going to trip yourself up.

Because in fact, what you need to do is focus on your trading, which is why I prefer the Demo Account option and not the Live Account



When you start-up for a Demo Account, you can then focus, because you’re not trying to make money and avoid losing money.

You can only focus on the actual system you’re developing and wherever it takes, you know it might be just one month, six months, a year, two years, three years to start moving into a Live Account.

That will be the stage where you know you have a system which you can depend.

Emotional Connection

When it comes to the unwanted scenario where you have the emotional connection with your money, and you start getting into this fear and greed complex´s situation and traders’ dilemma and feeling anxious when you’re opening positions and worrying about losses.

Then you can switch back to knowing that your system works consistently and depend on it, and get you out of the situation, get out of your way and trade with your system. And this is what happened to me when I started to trade like hundreds of thousands.

Okay, where a loss could be worth by a hundred and fifty thousand empowers me or something like that, I had to stop thinking about the amount that the position was in lost or profit because if you start seeing six-figure losses, you’re going to want to close that position straightaway, right? Because you’re going to feel anxious, that’s a significant amount of money for you but, if you focus just on trading, remember it’s an accumulative process.

Beginner Traders

Then you can focus on the trading and not worry about the actual figures that you’re the amount you’re trading; you start focused on just whether it’s the right position to take, whether you’re following the strategy and that’s what I did to overcome that.

So no amount on a Live Account with a small amount of money is going to get you ready for that situation, the only thing that’s going to prepare you for such a situation is to be wholly focused on your trading, which can only happen if you learn in an environment where money is not a factor.

So don’t worry about putting some small amount into a Live Account. Focus on your Demo Account trading, build up your trading strategy. Hold your Live Account trading, get right on trading, understand and drive it like the back of your hand. And know that you can depend on it.

Track everything, percentage, return, success rates. Everything and then move over to a Live Account and trade whatever amounts that you can afford to lose.