I have no intention of riling up anyone, but as a learning trader it is good that we discuss facts with one another. The first truth is that there is no spare money anywhere in the world; every money are valuable. To improve your trading psychology, you must practice your trade strategies on a live trade; even if you start out with 10$; you need to feel the heat, be under pressure.
I disagree. Demo trading isn't for gaining the psychological experience but for testing out a strategy, getting a feeling for how the strategy works, perfecting the trade plan for that particular strategy, find the flaws in the rules and trade management for that strategy and so on. I'd never put a strategy live before I've tested it for at least 100 trades in demo or paper. If you're trading for feeling the heat, it'll burn you in the long run.