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Successful Trading on Demo Account vs Live Account
livenow

Členom od Aug 18, 2011  4 príspevkov livenow Sep 05 2011 at 03:30
Hi,

I have been trading a simple scalping automated system using Metatrader with awesome results on my demo account, and wanted to know if what difference I might expect when I move to a live account.

The system is fairly simple, choosing either a sell or a buy, then taking one pip profit. If the market moves in the opposite direction, then another position is added (basically doubling down). After the third doubling down, the lot size doubles, then doubles again. All the while the profit point is moved down to make a one pip profit per trade. So even though several of the trades may be negative, the end result is a one pip profit per trade.

It seems to work with an average of about 1-2 doubling down before hitting its target.

My demo account of $50,000 has made about $300-$500/day, with a maximum drawdown of about 6% in a month, trading 0.3 size lots.

Back-testing shows consistent profit week after week, with only one major drawdown in 6 years.

What factors would cause a live account to trade differently than the demo account?


Thanks for any comments!

Live For Today...Plan For Tomorrow...Party Tonight..!!!
Splexin

Členom od Apr 11, 2011  202 príspevkov Splexin Sep 05 2011 at 17:12
livenow posted:

What factors would cause a live account to trade differently than the demo account?



1. Spread


99% certain that this system would not profit in long-term on real account.

livenow

Členom od Aug 18, 2011  4 príspevkov livenow Sep 06 2011 at 06:40
Doesn't my demo account take spread into account? The price between bid and offer shows up, and my trades are executed accordingly. I'm currently testing AUD/USD, and the spread is usually between 2.0 to 4.0, usually around 2.8. Is this not what I should expect when I'm trading a real account?

Just curious. The more info I have the better. Thanks for the post, and I look forward to clarification.


Happy Labor Day!

Live For Today...Plan For Tomorrow...Party Tonight..!!!
Splexin

Členom od Apr 11, 2011  202 príspevkov Splexin Sep 06 2011 at 12:26
Maybe so, but I have taken trades where I thought the spread would be covered but after trade execution completed that was not the case. The thing is, taking only 1 pip profit is not really enough breathing space and I have yet to see a martingale that survives the long-term. Have you tried taking 2 pips, or perhaps 5?

I might be somewhat biased, as even my worst winning trades usually bag 50 pips or more.

livenow

Členom od Aug 18, 2011  4 príspevkov livenow Sep 08 2011 at 01:19
Well, I'm going to be testing it for a while longer. The EA generates about 150 trades per 24 hours, so 150 pips per day. I can live with that.

But like you said, it will be a different story once I'm using real money.

Thank you very much for your input. I appreciate it.



Live For Today...Plan For Tomorrow...Party Tonight..!!!
walker36

Členom od May 13, 2011  1341 príspevkov Steve Walker (walker36) Sep 08 2011 at 23:41

livenow posted:
    Well, I'm going to be testing it for a while longer. The EA generates about 150 trades per 24 hours, so 150 pips per day. I can live with that.

But like you said, it will be a different story once I'm using real money.

Thank you very much for your input. I appreciate it.





are you backtesting with %90 modelling quality. if yes first you should backtest it with %99 modelling quality. Mt4 'each tick' BT is not each tick.it is using fractal interpolation instead. and this unfortunatelly is extremly effective on TP<15 pip. in your situation it is %100 effective.

real account effects
- if you trading with DD broker then in real account be ready to face with requotes
- if you trading with STP or STP/ECN broker then in real account be ready to face with negative slippage.
- order execution is slower in real account regarding to demo account. BT there is no delays!!
- floating spread / if your broker is floating
- news
- connection failures
- login failures.

regards
walker


Trade The Trend! Defend To Price!
chjungen

Členom od Nov 07, 2009  9 príspevkov chjungen Sep 11 2011 at 12:12
As I can see from your stats, your avg. gain is 2.8 pips. I'm pretty sure, this is unrealistic for profitable live trading.
You often will not get prices as good as on demo and your strategy will not be profitable.
Try a strategy with at least 5 or 7 pips.



livenow

Členom od Aug 18, 2011  4 príspevkov livenow Sep 13 2011 at 21:34
Thanks everyone for the input. I'll take all this into consideration before live trading. You've been very helpful.



J

Live For Today...Plan For Tomorrow...Party Tonight..!!!
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