Is demo a step before real trading?

yes, a demo account will help us to understand the trading platform, test trading strategies and skills practice trading. in a demo account we will use the money virtul so we do not have to worry about losing money. we have to use a demo account with either

Sound Advice as always..

But on the Strategy v Psychology issue there is a simple plan I recommend you implement when you take the leap from Demo to Real.
Because Demo v Real trading differences generally fall into two broad categories..
1. Execution.. Differences in result arising from the technical differences in the Real v Demo execution environment and processes.
2. Psychological.. Differences in your application of your system to Real trading.. arising from stresses of trading with REAL MONEY.
It IS critical IMHO when transiting from DEmo to Real to differentiate between these...
And heres a simple way to do that which in the past has saved me money.

TRICK of the TRADE.. Demo to Real
(Establish if your successful DEMO tested trading system is vulnerable in translation to Real-Trading Technical Execution problems.)

When you open your REAL Acct, open a new DEMO account from same broker with same equity.***
Open BOTH on your Trading Computer/WorkStation, which should have adequate speed, memory and be dedicated.
Install RELIABLE TradeCopy software on both. And link Demo to Live in Master Slave setup. (same Broker)
(The execution latency between the two platforms in such a setup should be less than 1ms).
Now trade thru the Demo platform.. when you place a DEMO order (Stop/Limit/AtMarket) youll quickly see how technically reliable all your testing has been for Real Execution.
At the end of your first week or two, you should have enough data by comparing statements and execution details to decide to what extent technical execution on the Real account differs from the Demo environment on which youve developed your strategy. Needless to say this whole exercise should be undertaken on very low leverage and smallest viable equity risk.

*** VERY IMPORTANT to ensure that lotsizes copy with identically leverage. Competently written TradeCopy software will allow scaling when Demo and Real equity differs. So..If the Demo Account equity is DIFFERENT from your REAL account then you MUST ensure that the LIVE Trades placed are based on EXACTLY same leverage as the Demo on which you tested and proved your system. Best if to set up both accounts with SAME equity and trade initially with lowest leverage possible.

Fair enough.

However, for me the critical transition is not demo to real (10c/pip); it makes little difference to me if I'm up $20 or down $20 at the end of the week. Fear of significant monetary loss starts to dictate my decision making in when I get to somewhere between $2 to $5 per pip.

But the biggest fear I have is that of failure, regardless of whether it's demo or real. It's probably irrational to think that way, but then the very nature of fear frequently lies within its irrationality. Problems with a rational nature can be more easily analyzed and solved.

I see trading as an exercise in coming to grips with uncertainty, both methodologically and emotionally.

For me too... I couldnt agree more..

BUT.. my point is, that while agreeing with all of the above, that you would equally agree with me, that as traders, to succeed, we need to separate the rational from the psychological, the empirical from the non-empirical, the objective from the subjective.

My experience is that the psychological challenges you and others describe above, are made very much worse, when the Trader discovers that what rationally appeared to work on Demo suffers considerable degradation in Real trading, due to the unquantified mix of technical issues and sell-side trickery, encountered in the Real Trading environment.
This ADDS considerably to the Psychological challenges and stress you refer to, and in many cases introduces an element of mild paranoia in a Traders Mindset.
However, If the strategy proves durable in the face of the additional practical and technical issues inherent in Real money trading, that leaves the Trader free to focus more clearly in mastering their own demons in delivering it with confidence.

In other words, by isolating the technical execution and transaction cost differences and even those elements of sell-side trickery, using the setup Ive suggested,
we get a benchmark and the opportunity to define and separate the PRACTICAL problems... Objective/Rational/ and Quantifiable issues
from the Irrational/Subjective and non Empirical psychological issues, and can thereby more effectively focus our energies to minimize these..

Hope this helps.

Note. The setup in my earlier post has potential of a broader applicatio in creating benchmarks For rudimentary retail TCA which is an ongoing project for me.
TCA? OK.. In all normal businesses, Cost of Sales is a critical element in profitability.
The trading equivalent is Transaction Cost. Much railed at.. as slippage, spread variation, and undependable execution,
Unfortunately its a sadly neglected area of attention... due to a lack of tools.. and Transaction Cost Analysis (TCA) is almost non existent in the retail space.
Never the less, experienced traders know very well how small variations in TC can very quickly destroy an EDGE, ... turn big profits into small, and otherwise successful conservative strategies into break-even or loss.

Guys I opened a demo account and I started with 5,000,000 USD and now it is 5,005,147 USD !
does this mean if I had a real account and did exactly what I did in my demo , I would have earned 5147 usd in 10 minutes?
and why do people say I lost my money or whatever happened, sometimes it says I have -5000 usd profit and I wait for like 5 mins so I wait until it gives me a positive profit!

A demo account should be traded like its your own money. It helps to understand the market, to practice strategies until you are confident enough to start trading with a life account. Once you have entered the trade, as the market goes up and down, you may be negative to start with as the broker's fees are including. The price may also goes against you at the time when you took the trade and then move in your favour to show you have a positive balance.

The decision to trade a demo account or not is yours alone to make. A prudent trader knows when the time is ripe to commence trading live and is dependent on their trade capital utilised, their risk tolerance and their personal comfort and trust in their strategy. This can only be determined by the trader themselves. For example, if risking pocket money, you will hardly blink an eye before considering trading live and often it is a good move to dive right in with a bit of risk money to test the validity of a strategy. That way you get a few stings in the tail that check the old ego and avoid cognitive biases that might fuel the ego fire.........however if your stake is large and a sizable fraction of your net wealth, then I would suspect you would not be asking the opinions of others and ensuring that you are comfortable with your strategy before going live.

The main aim of testing via back-test or demo is to identify the weaknesses of a strategy and ensure that when the proverbial hits the fan, you can sit on top of the mast and shout "is that the best you can do". A good looking equity curve over such a short timeframe tells me nothing about the risk metrics of your system. If you want to survive in this game, you need to be resilient and capable of withstanding uncertainty. IMO sustainable profits are just a result of being alive long enough in this market to participate in them and are secondary to the main game which is managing uncertainty.

The equity curve you posted over such a short timeframe suggests a strategy with many small wins and some severe losses and is suggestive of a mean reversion strategy which is highly dependent on favorable market conditions......but that is purely a stab in the dark. It would be prudent to at least assess how many consecutive losses would make you feel uncomfortable in your risk exposure. With only an equity curve to work off, how anyone can offer worthwhile advice to you defeats me.

Demo accounts must be used prior to start trading real money account, because in the demo account then we will be able to practice the skills of trading well, and therefore we have to use a demo account with either. in the demo account then we will be ready to start trading real money account, so it will benefit us

Yes and an absolutely essential step before real trading.

Demo account trading provide one free practise opportunity before you deposit real money on trading. But it should not take long time, because you may perform better for free trading, that's not good for your future trading.

I prectice for a month or so before opening a real account. I think every trader should start from demo.

No doubt that demo is a necessary step before starting real trading

I really hate demo, I always like to test things on live account and know how it feels to lose or win money even if I risk cents

I believe demo helps to get used to platform and trace some general price behaviours of instruments. In general, real fun begins after you set on liove accout and start risking your own funds It is completely different

I guess demo account is good to practice before going toward real trading accounts, although it seems to be tiring in start but it really helps a lot in future. I still trade my demo accounts in my free time to test new strategies.

Even if it's tiring I don't think that is a step that should be skipped. You'll be taking far too many risks if you do. It's better to learn to trade in a safe, relatively relaxed environment before you move onto more high-pressure trading with real money.

Yes, you should always practice using demo accounts before real accounts before you get to the real trading, dear. It's always advisable to test your skills on virtual money just to know your limit of your strategy and also just know you stress levels.

Begin with demo, then create a SMALL (SMALL, like in SMALL) account.
You'll see that losing ten trades of $10000 in demo doesn't have the impact that losing three of $10 in a real account does.

DEMO IS BULLSH!T

you don't need to trade on a demo, this is crap peddled to you by the trading "industry" to lull you into believing that you are a great trader and you should go live.

Money Management is where the men are separated from the boys . The skill lies in not picking levels, not with some indicator (that dosen't work) the skill of any trader is deciding on their stop loss first prior to entry as doing this is the only way to evaluate where the entry can be depending on your comfort level with risk.

I have mentored traders over my years and my advice, harsh as it may be is this:

- You need to work out by looking at charts where appropriate trades are and then working out your money management from their if you can't do this yet then demo trading won't help it will only teach you not to use proper money management cause it isn't real, only by getting your ass kicked normally do you learn

Save yourself the headache the only skill you really need to have first up in trading is being man enough to kill losers the rest is acquired over time.

Simon