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Danger: Sticky and Explosive
The demoman can be devilishly effective in the hands of a good player. His impact grenade launcher and sticky bombs can deny areas from entire teams if played properly. His major downside is a lack of any sort of direct damage - no pistol, no shotgun. This makes him very vulnerable to close range attackers like pyros and scouts. Although to the novice it seems that the grenade launcher is the more effective of his weapons, more advanced players tend to get the majority of their kills from sticky bombs. They do more damage in aggregate and have a higher splash radius - plus their critical hits are absolutely devastating. Properly laying an area with sticky bombs takes some planning and wiliness, but it's a fantastic way to accrue kills and stop an enemy advance. When they see your field of stickies, they'll know that it'll be death to try to cross it.
Spamming grenades from your launcher as long as you can manage it keeps the enemy funneled into a small area. Bounce it from corners, and don't worry too much about running out of ammunition. Your bouncing balls of death are just there to scare back the opposing team. If you get them to delay their advance by making an area dangerous, you've just accomplished something nearly as effective as a kill.
Some good places to put down stickies are on top of a capture point and around the arch of a doorway. The latter is very tricky, as it enables you to surprise people as they run through an arch. It's generally wise to launch all eight of your stickies in a particular area, unless it will make your devious trap too obvious. Try to put down at least four in a tight spread to make sure that you kill anyone that runs through it. If you spot a medic and another person run through your mine field, wait until the medic gets into the center of it before setting it off.
Demomen are very easy to kill if you give up control of a particular area to any class. You want to keep your enemies bottled up and afraid to move too much. Suppression is your primary purpose - you keep the other team immobilized so that your teammates can obliterate them more easily. Your other primary goal is to defend critical points like capture points and certain choke points with your sticky bombs. If you're the only person defending an area, don't let yourself die - it will make your stickies disappear. If you're in trouble, hide instead, and set off your bombs when they're about to capture a point or grab your intelligence.