officejax currency trading information

Channel



Ad your free banner at www.AdViews.info

 

Why Demo Account Performance Is Often Better Than Real Account Performance


Over the past several years, the popularity of online currency trading has grown substantially. Each day, online FX brokerage firms attract new investors - each of them lining up with a glint in their eye, lured in by promises of easy money. Most of these companies allow you to sign up for a free demo account which lets you place mock trades using their trading platform to get a feel for the excitement of currency trading. In the casual world of free demo accounts - many young traders find they are able to garner impressive profits without a significant amount of effort. It almost seems too good to be true. But transferring this success from a demo account to a real account is far less common. Why is this? The actual trading platform behaves the exact same way, the market doesn't care whether you're a demo or real trader - so what is different? It's you who has changed. Not your personality, not even your trading style - but the factors that affect you are different.

What is the key factor to trading success?

The search for the "Holy Grail" of trading has been a common theme throughout the history of markets. There are a variety of different techniques. Those whom are inclined towards number crunching and pattern recognition may prefer technical analysis, whereas those more focused on the big picture, logical macro perspective prefer fundamental analysis. Then there are specific methodologies like swing trading, trend following or even more esoteric ideas like the Elliot Wave theory. Which one is best? There are examples of very successful traders using each methodology.

Since most new traders lose money - perhaps the more appropriate question to ask is, "What is the key factor to trading failure?"

Greed and Fear

Trading is an atmosphere rich in the porous emotions of greed and fear. The current price of a given security or financial instrument at any point in time can be thought of as the confluence of greed (bulls) and fear (bears). These two emotions make up the core of humanity itself. When market information is released, trading can be a high intensity experience. Sensing danger, your body releases adrenaline that acts to accentuate both your greed (fight) and your fear (flight). Because these emotions are so strong, they can cause you to act irrationally, ignore your system, stated set of rules or trading plan and to act upon impulse. Indeed, this is a genetically programmed response - but it is often also the trader's downfall, especially when he's playing with much better capitalized, more sophisticated and experienced foes that know how to manipulate those emotions.

When you are a trader - you are always under the influence of at least one of these two emotions, even if you don't have any trades on.

Impact of fear and greed on your trading

If the market's going up and you're in - greed is telling you to buy more and fear is telling you to take your profits while you still can. If it's going down, fear of being wrong makes you hold onto a losing position - and then greed sometimes convinces you to "average down" your position (and buy more) so it'll be easier for you to come back.

If the market's going up and you're not invested - fear is telling you that you're missing out on easy money but it's your greed that causes you to get in just after the greatest increase (just when its about to reverse course). If the market's going down and you're not invested - greed is telling you to get in as the price is cheap, while fear reminds you that you'll miss out on this opportunity if you don't act quickly.

Perhaps if we just felt greed, or just felt fear we would be able to control our emotions a little better. But when both of these little devils whisper into our ears at the same time - it is often impossible not to listen.

The Thrill of Greed

The first time you try FX trading - you will feel the thrill of greed. It is an ecstatic experience, your brain flush with neurotransmitters and your mind giddy with visions of untold riches about to be reaped. Greed is bold, aggressive and incredibly exciting. It can take hold of you both mentally and physically. Just imagine the possibilities!

This greed is what draws us into FX trading in the first place - the dream of easy money and 100:1 or 200:1 margin rates. It inspires us and causes us to forego rational thinking in favour of reckless abandon.

In the movie Wall Street, Gordon Gecko says, "Greed is good", but it is also very dangerous - especially if you are unable to recognize when greed is the one doing the talking. Greed is also one of the most common techniques used to manipulate people. Every get rich quick scheme, promising untold riches for no money down takes advantage of your natural predisposition to throw all logic and sense out the window when greed pays a visit. The argument starts to appear very compelling and you ignore what would otherwise be clear warning signs. Like drunk goggles, greed can mislead you and when you eventually wake up you are often in a very precarious position.

The Fear of Losing

Fear can be equally as dangerous. The most potent and easily manipulated form of fear is your fear of admitting that you are wrong. Fear of having your precious ego bruised. This fear can cause people to do incredibly stupid things. The funny thing about this world is that everyone thinks that they are right. Most people would rather lose thousands of dollars than admit they are wrong. It is easy to feel ashamed of trading losses and live in denial but this is self-destructive behaviour. By denying the problem exists, you fail to take steps address it and only ensure that it will continue in the future.

Demo Trading

Demo trading is a great way to get started in foreign exchange trading. It is identical to real trading, except that you're using "pretend" money. Demo trading allows you to get a taste for what type of events move markets and how they move. It encourages you to learn more about geopolitics, macroeconomics and global finance and these are all incredibly positive things.

Demo trading also introduces you to the rapture of greed. Trading is a means to one of the purest, most raw and potent forms of greed. The whole point of trading is to make money and the more money you make - the stronger the pull of your greed becomes. It is intoxicating and can take complete control of you.

But demo trading does not introduce you to fear. There is no fear when you are demo trading. It is like you have a perpetual get out of jail free card. If you start losing badly on a demo account - simply start a new one. There is no accountability for your trading failures and only recognition of your trading success.

So your demo account does not teach you how to handle the emotion of fear. This emotion is most likely going to lead to your downfall. Greed may get you overextended, but fear will stop you from cutting your losses. You may think that fear of losing money would cause you to cut your losses, but the stronger emotion is fear of being wrong and that causes you to hold on to your losing position - until it's all gone.

There is also the issue of account size. Many demo accounts give you $50,000 to play with. This type of capitalization allows you to buy 5 lots (500K) of EURUSD pretty easily. If goes up 20 pips you've made $1000. Nice one. But when you open your real account - it's more likely that you put $5000 or $10000 in there to begin with. Now you're dealing with a 50K lot, which means you'll take $100 out of a 20-pip movement. But mentally you are used to getting $1000 for that movement so you usually end up risking more. Next thing you know - your 200K position has turned against you 50 pips and you've lost $1000. That's real money you just lost. You can't just start another account.

The capitalization of the demo account is sufficient to sustain losses and still come out on top. But your real account is likely to be undercapitalized and if you're trying to achieve returns similar to what you got on your demo account - you are going to blow up very quickly.

Being honest with yourself

Ultimately, while providing an excellent introduction to FX trading - demo accounts do not accurately predict whether you'll be successful trading real money. Markets are dominated by psychology and often go against what fundamental logic or technical indicators suggest should happen. The single most critical factor in your trading success will be your ability to control your emotions of greed and fear. These emotions cloud your judgment and cause you to trade recklessly. Demo accounts introduce you to the emotion of greed, but by their very nature they are risk free and therefore there is no fear involved. They are also likely to be better capitalized than your real money account, which misleads you with respect to the amount of returns you can expect to earn.

For all of these reasons, demo accounts allow you to avoid being honest with yourself and this is perhaps the most important factor of all. You need to know your edge and your limits and in order to know these - you must be honest with yourself.

This being said, demo accounts are still very entertaining and educational and I highly recommend opening one to anyone who's interested in getting a taste of the exciting world of FX trading. It's a great way to learn more about economics, global politics and yourself.

William White is a software developer and avid foreign exchange enthusiast.

His website - Finance Maps offers free maps depicting short, medium and long range trends for the major currency pairs which allows the reader to easily get an overall sense of the global forex markets in a single glance.


TODAYS NEWS BY OFFICEJAX FREE ADVERTISING AND AD EXCHANGE SOLUTIONSMORE RESOURCES updated Sat. January / 20 / 2018

This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news


Slovenian central bank warns of crypto currency trading risks
Xinhua
LJUBLJANA, Jan. 18 (Xinhua) -- The Slovenian central bank on Thursday warned that trading in crypto currencies such as Bitcoin was risky and said it could eventually have an impact on financial stability. Crypto currency trading "could have an impact ...



ITWeb

Crypto-currency trading site launches in SA | ITWeb
ITWeb
Crypto-currency enthusiasts in SA can now use Coindirect to trade their digital currencies, after the online platform went live in the country.

and more »


Metatron (MRNJ) releases BitMeet™a Bitcoin Crypto-Currency ...
GlobeNewswire (press release)
DOVER, Del., Jan. 16, 2018 (GLOBE NEWSWIRE) -- Metatron (OTC:MRNJ), a technology pioneer specializing in the accelerated release of over 2000 apps, including Cannaboids™ and Vaporized™ secure chat apps, is pleased to announce the release of BitMeet ...

and more »


FX Daily Report

How To Choose Cheap Forex VPS For Online Currency Trading
FX Daily Report
Most digital currency traders prefer using their home computer, internet connection and power supply to conduct their business online. The problem with this is that in case of a power outage, you will lose internet connection and in case you were in ...

and more »


PRN Wire: Coindirect makes digital currency trading simple, now ...
PressReleaseNetwork.com (press release)
Coindirect.com, the easiest and fastest way to buy and sell cryptocurrencies online, is pleased to announce the initial launch of its ground-breaking platform for local currency trading. The Coindirect.com cryptocurrency marketplace is designed to make ...

and more »


(Updated) Metatron (MRNJ) releases BitMeet™a Bitcoin Crypto ...
GlobeNewswire (press release)
DOVER, Del., Jan. 10, 2018 (GLOBE NEWSWIRE) -- via OTC PR WIRE-- Metatron (OTC:MRNJ), a technology pioneer specializing in the accelerated release of over 2000 apps including Cannaboids™ and Vaporized™ secure chat apps is pleased to announce the ...

and more »


Chicago Tribune

HSBC to pay $100 million to end US currency-rigging probe
Chicago Tribune
The Sept. 29 order referred to the criminal case against Johnson and Scott as well as a $275 million penalty the bank paid to the Commodity Futures Trading Commission in 2014 after being accused of using private electronic chat rooms to improperly ...
HSBC to pay $101.5m to settle US forex investigationCity A.M.
HSBC Holdings Plc Agrees to Pay More Than $100 Million to Resolve Fraud Charges | OPA | Department of JusticeDepartment of Justice

all 45 news articles »


The Hill

Goldman Sachs to establish digital currency trading desk: report
The Hill
Goldman Sachs is reportedly creating a trading desk to make markets in digital currencies such as bitcoin, Bloomberg reported on Thursday. The bank plans to have the desk established by the end of June, sources told the news organization. Goldman Sachs ...
Goldman Sachs to Open Cryptocurrency Trading Desk Before June 2018‎Finance Magnates

all 246 news articles »


ITWeb

South Korea to ban crypto-currency trading
ITWeb
Justice minister Park Sang-ki said the government is preparing a Bill to ban trading of the virtual currency on domestic exchanges. "There are great concerns regarding virtual currencies and justice ministry is basically preparing a Bill to ban crypto ...
Bitcoin-crazy South Korea may face a ban on cryptocurrency tradingKSHB
South Korea Cracks Down on Digital Currency Exchanges Amidst ConfusionCoinsquare Discover
Young South Koreans slam cryptocurrency trading crackdownNikkei Asian Review
The Times -BGR -Reuters
all 534 news articles »


Korea Times

Military blocks access to virtual currency trading systems
Korea Times
The Ministry of National Defense is blocking access to online cryptocurrency trading systems inside military camps. The ministry said Monday it is also considering various other regulatory measures against digital tokens ― such as bitcoin, the most ...

and more »

Google News

     Large inventory of office cubicle and partitions walls for sale in Northeast Ohio

     Find home remodeling contractors Akron Ohio

Search for estate sales in Akron Ohio

Click here to
OfficeJax free ad space available here improve pagerank with a free one way backlink

 

Find used office equipment in Ohio at www.OfficeJax.Has.It

www.Akron.Has.It

Find the best fleamarkets at www.FleaMarketWorld.Has.It

Find electric powered vehicles at www.NoGas.Drives.It

Flea Market World

Free Automatic Link Exchange

Akron City directory

Find homes for rent
in Akron Ohio
www.homes4rent.has.it

Anonymous and Confidential U.S. Mail Drops - No ID Required reship worldwide

Click here to
post your free classified ad here free advertising and one way backlink
Free one way backlink

 

officejax surplus office furniture outlet Akron, ohio

[Back to Top]

 

auction news and listings for Akron, Ohio

Akron crafts and hobby news center

Akron Ohio pet news

Advertising and promotions Akron, Ohio

The Akron blogging news center

Akron Ohio web site design news

best tips and home remedies

Akron Mortgaging and refinancing

Akron currency trading

Page Ranking Icon

 

Home | Site Map
© 2012 All Rights Reserved

 


currency trading forex currency trading online currency trading foreign currency trading currency forex learn online trading currency forex online trading currency day trading currency trading system forex currency trading system currency privateforextrader.com trading currency exchange trading e currency trading currency foreign privateforextrader.com trading book on currency trading currency trading broker currency trading software day trading forex currency currency ireland trading online currency trading system currency future trading day trading for the currency market online foreign currency trading fx currency trading forex currency trading beginner forex training course currency trading currency day system trading currency trading course 4x currency trading currency trading tutorial currency trading information foreign currency exchange trading currency global in market trading started in currency trading commodity  currency trading trading the global currency market international currency trading course in currency trading automated currency system trading foreign currency trading software currency trading strategy currency forex learn trading currency make money trading currency trading signal currency option trading currency forex market trading currency trading made easy chart currency trading currency trading  tip currency foreign forex trading currency demo trading currency trading forex spot rate learn currency trading basics currency trading currency trading for beginner forex currency trading broker currency electronic trading currency game trading currency exchange foreign  forex trading interbank currency trading practice currency trading currency forex fx software software software trading free trading currency guide tool online currency forex trading currency news trading best currency system trading currency trading account currency currency forex forex learn online online trading online currency trading strategy currency trading platform currency forex learn online online trading trading currency trading training company currency exchange foreign trading company currency forex trading currency euro trading currency forex trader trading automated currency trading currency foreign system trading currency market trading currency option trading system currency trading seminar business currency currency home internet trading trading canada currency trading spot currency trading currency exchange rate trading currency forex pair trading using vantagepoint currency network neural trading boards currency forex trading how to start currency trading currency trading australia currency forex tag trading currency forex trade trading currency insurance trading currency trading education live currency trading online currency option trading advisor currency expert trading, commodity currency future trading currency day foreign trading currency exchange link trading credit currency trading