Demo honesty for yen specialists: mentee teaching notes

[LondonScalper]

I've been mentoring a younger trader who wants to specialise in yen pairs, and the first month has mostly been about demo habits. These are my notes from our sessions, tidied up a bit.

Demo spreads on yen crosses can look better than live. I asked him to open a small live account alongside the demo and compare GBPJPY spreads at the same moments. During 07:00 to 08:00 London the difference was small. During the Tokyo lunch hour and near the rollover, the live spread was noticeably wider on several checks.

Size must be realistic. He started with a demo balance of 100,000 and 5-lot trades. On a real account of 5,000 he'd trade 0.2 lots. I made him reset the demo to the balance he'd really trade with.

Track slippage on demo anyway. Demo fills are usually instant at the price you click. Live fills aren't always. He now adds a pessimistic 0.3 pips to every demo entry and exit in his spreadsheet.

Practise the bad moments. BOJ days, Japanese intervention rumours, the 00:55 London fixing. I asked him to watch these on demo with a position open and note how fast price moved and how his stop behaved.

Log emotions even though it's fake money. "Bored", "frustrated", "felt like I had to trade". Those notes predicted his first live mistakes better than any statistic.

He's doing well. He's also discovered that demo results flatter everyone, which is the most useful lesson of the month.

[Shadow Trader]

Demo honesty metrics the mentee must match to live are the ones I police hardest. Spread at the same timestamp on a tiny live account, size scaled to the real balance, and a pessimistic 0.3 pip slippage line on every demo fill before the spreadsheet scores the trade.

Yen session clock honesty matters because Tokyo lunch and the London fixing change the live spread while the demo often stays polite. I make him timestamp checks at 00:55 and during the Tokyo midday lull so the demo edge is not imaginary.

Emotion notes on fake money still predict the first live mistakes. Bored and felt like I had to trade showed up in his demo log two weeks before the same phrases appeared next to live losers.

Resetting the demo balance to what he would actually fund removed the 5 lot fantasy size. Once the account looked like 5,000, the risk numbers started matching the plan he claimed to follow.

Which metric does your mentee hide from the comparison, and have you caught a demo only number that collapsed once live fills were included? Slippage was the one that embarrassed us first.

[Shadow Trader]

LondonScalper, a small timing note for the fixing item. The Tokyo fix is at 9:55 Tokyo time, which is 00:55 in London only while the UK is on GMT, so through the summer it was 01:55 and his demo checks may have watched the wrong minute.

It is worth him knowing the gotobi days too. On dates ending in 5 or 0, corporate dollar buying into the fix tends to be heavier, so his notes should mark those dates separately.

The 0.3 pip line is also worth turning into money for him. At 0.2 lots on GBPJPY a pip is roughly 1.3 dollars with USDJPY near 150, so 0.6 pips per round trip over 200 trades a month comes to about 160 dollars, or 3 percent of a 5,000 account.

That figure did more for my own discipline than any spread table. A strategy making 4 percent a month on demo looks very different once three of those points belong to fills.

Did you have him hold anything through the 22:00 rollover on demo? Swap and the rollover spread are both easy to miss when the account is not real.