FAQ Section | Frequently Asked Questions
Risk management only shows its quality where losses are real, painful and existentially relevant. Demo and micro accounts eliminate precisely those stressors for which professional risk management was developed in the first place.
1. Capital dimension: Risk is a function of relevance, not of percentages Risk management is often mistakenly understood as a pure percentage calculation (e.g. "1% risk per trade"). In practice, however, risk is relational:
- 1% of €500 → €5
- 1% of €250,000 → €2,500
The mathematical logic is identical, but the psychological and operational consequence is not. Consequence:
- Drawdowns in demo/micro setups are reversible without meaning
- Drawdowns in real setups create pressure, self-doubt, decision stress
Risk management is designed precisely for this second situation
2. Psychological risk: The biggest risk factor is completely missing
In demo and micro accounts, key stressors are missing:
- no real capital loss
- no opportunity cost
- no social, family or financial pressure
- no existential relevance
Problem:
Risk management under real-world conditions primarily addresses behavioral risk, not market volatility:
- Overtrading
- Rule breaking
- Revenge trading
- Increasing positions after losses
- Ignoring stops
All of these effects only occur reliably when there is real pain.
3. Margin & Leverage: Asymmetries that appear distorted in the demo context
As soon as leverage or margin come into play, the rules of the game change:
- Liquidation risks
- Margin calls
- Forced deleveraging
- Slippage during volatility
- Liquidity bottlenecks in stress phases
In demo environments:
- no real liquidation chains
- no broker-side escalations
- no realistic execution quality under stress
Result: A supposedly "cleanly managed" risk only exists under laboratory conditions.
4. Time dimension: risk accumulates - demo accounts isolate time
Risk management does not work trade-by-trade, but over time:
- Serial losses
- Volatility clusters
- Phases of structural underperformance
- mental fatigue
Micro accounts become frequent:
- reset more quickly
- emotionally faded
- without consequences
In reality, however:
:: You carry your losses further - mentally, financially and structurally.
5. disincentive structure: demo setups reward wrong behaviour
Demo and micro accounts create systematic distortions:
| Distortion | Effect |
| Loss is inconsequential | Higher risk appetite |
| Reset option | No learning curve |
| "gambling money-mentality" | Rule breaking without sanction |
| Focus on hit rate | Neglecting drawdowns |
The seemingly good risk management is often just an artifact of the environment.
6. Professional benchmark: risk management is stress engineering
In professional contexts (prop trading, asset management, family offices):
:: Risk management is not protection against markets - but against your own behavior under stress.
Demo setups remove precisely this stress. They do not test risk management, but strategy mechanics.
7. Precise delimitation
Demo & micro accounts are useful for:
- Order mechanics
- Platform understanding
- Strategy logic rule training
They are unsuitable for:
- Reliable risk management
- Drawdown discipline
- Leverage and margin stress
- Behavioral stability under loss pressure
Those who only test risk management in the demo are testing the system - not themselves. And that is where the real risk lies.