Interesting thoughts. The psychology part of trading does not come into effect on a demo account for sure.
That being said, without learning to be profitable on a demo account and developing a working strategy it will never be possible to do it on a live account.
Start a demo, learn to be profitable and then move to a live account and work on your head.
Fun exercise, try to lose money on a demo. It is difficult to do. If you are able to figure out something that works consistently in losing money reverse the principles and you may be on your way to building a working strategy.
RE: Trading Strategy #2 - "You should stay on a demo account until you're profitable"