Starting Out With Nadex.
The Nadex platform allows for many different types of trades. If you’re first starting out with Nadex you might wonder what the difference between trading with a demo account and a live account might be. First and foremost if you don’t get anything else out of this post remember this “Do not start a live account before being profitable in a demo account.”.
Now you may want to repeat that a few times. This will help make sure you do not lose all your money, an blow through your investment capital. Now lets first start with some of the physical differences between Nadex live and Nadex demo accounts.
Physical Difference Between Nadex Live and Nadex Demo Accounts.
Just by taking a quick look at a Nadex demo and live account you should be able to spot a few differences right off the bat. First off you should notice that the order contracts are quite often different sizes. This impacts your ability to use position sizes to make up for previous loses. Almost all contract bid and offer sizes are different when comparing live and demo accounts on Nadex.
The next thing you should notice is that the bid and offer sizes are quite different. Often times from my experiences out of the money trades are more profitable on live accounts in comparision to demo accounts. The reverse also seems to be true quite often where in the money trades are normally less profitable on live in comparison to demo. This is something that can impact your trading strategy immensely. Also you have to take into account that you are actually trading on the market which means you are impacting it even if it is in just the slightest.
The Psychological Difference.
This in my opinion is one of the largest differences. It’s much easier on a demo account to be more logical and to take out emotions. It’s much harder to feel okay with losing $50 dollars or more, and watching yourself lose it in a demo than real life. Many times you will be in trades that may reverse to your original guess, but due to fear you may exit the trade on a loss rather than a win due to fear. One of the biggest things about this market is it’s a logic game, and emotion has to be left out of it. This is incredibly difficult when you’re waging real hard earned money.
Final Difference Between Nadex Live and Nadex Demo Accounts.
The last thing you need to remember between Nadex live and demo accounts is your starting capital. With a Nadex demo account you start of with 25,000 dollars virtual money. Most people however are not going to be starting off with that much capital. This impacts the types of trades you can make and the amount of time you have to get back into profit. However the demo account is an amazing tool to have. Make sure you can get a return on your investment on a demo account before you trade live! Remember for every live trade you make on Nadex there is someone on the other side who has to take that wager, there can only be one loser and one winner per trade. Good Luck on your Nadex Journey!