A strategy runs for two weeks on a demo account and shows a smooth profit. The temptation is to fund a live account with a sizable amount and trade at full size. The gap between demo and live is where many accounts fail.
Demo hides execution costs and emotional pressure. Fills are better, slippage is absent, and losses do not hurt. The sample is also small, and the results may reflect market conditions during those two weeks.
Overconfidence shows up as size that is too large, little preparation for failure, and no plan for the first losing streak.
A more sober approach treats demo success as a minimum requirement and starts live trading at a tiny fraction of the planned size. The first live month is an audit of execution and psychology.
Compare live and demo results trade by trade. Expect a decline and determine whether it is within tolerance.
Scaling up should depend on evidence from live trading, not on the glow of demo results.
How does the first month of live results usually compare with the demo, and what explains the gap?
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Overconfidence after a good demo run
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