Demo vs Real.
Member Since May 04, 2012
1608 posts
Jul 29, 2015 at 07:44
(edited Jul 29, 2015 at 07:49)
@IXBONE
Respectfully I have to disagree. I will try to enlighten my views one last time from a different angle.
1. DEMO trades have unlimited liquidity. This is a fact.
PROOF: Try to trade 100.000 lots on especially on an exotic pair with a BUY STOP or SELL STOP order. You will get the FILL at the BUY STOP or SELL STOP price. What are the chances that you would get the same fill price on 100.000 real lots? Seriously...
If you look at the centralized and aggregated EURUSD Level II quotes on LMAX (which is theoretically the aggregated liquidity from all participating LPs) you would see that the TOTAL EUR/USD liquidity 0.5 pip above and 0-5 pip below the current price is about 50 lots (i.e. in each direction. In other words if you sold 50 EUR/USD lots on LMAX centralized Fx spot market, it would move the market by 0.5 pips. Just imagine what is the Level II liquidity on an exotic pair within 50 pip distance in each direction DURING NEWS. Practically ZERO. Which is why prices fly on exotics during new.
BUT: your demo would get the fill. Why? Even is there were 0.01 lot liquidity when the news comes out, your DEMO would get the fill for 100.000 lots at the same exact price where - in reality - there is only 0.01 lot liquidity.
2. NO SIGNIFICANT EXECUTION TIME DELAYS ON DEMOS DURING NEWS. Another fact.
As stated correctly, most brokers 'B-Book' clients, however, during news events their is a limit on their 'B-booking' internal (virtual) liquidity, i.e. how many lots they are willing to absorb once price starts moving fast. Well, they are NOT THAT STUPID to stand under the falling knife.
DEMOs are executed fast (by 'B-booking speed) internally without limitations. On REAL accounts it is different: Once the broker's designated internal liquidity is absorbed (USUALLY BY SUPERFAST NEWSTRADER BOTS), then they re-route the rest of the orders to their LPs, i.e. by 'A-booking', so within 'no time' thousands of late-coming orders are fighting each other for the LPs' limited liquidity. While the 'fight' goes on for the limited liquidity price moves fast and time goes by (it takes seconds for the LPs to match thousands of orders pouring in)... The larger the order, the later it will find good liquidity and probably at a really deteriorated price.
_______________________________________________________________________________
Addendum: Those brokers who decide NOT to 'A-book' above a certain volume during news will do one of 2 things:
1. Intentionally slip your orders (by virtual dealer plug-ins), and/or open the spread above 50 pips, so you will get a really bad fill during the news.
2. If your BOT is faster interpreting the impact of the news, i.e. it is faster placing orders than the broker's quote server adjusting its bid/ask quotes, then you beat them. So they will claim that you have commited the crime of so-called 'price arbitrage' which is forbidden and they refuse to pay your profits.
I used to be a client of a NEWSTRADER group whose bot was faster than most brokers' quote servers. Why did I quit them? Mostly I was refused to get my profits by the broker, or if I got it from some, my account was placed on their 'black list' within a week, so I had to move my funds to a new broker with all the paperwork and wiring funds back and forth (with the involved wire costs) as I was advised by the newstraders. The hassle was just too much and not worth the profits. Also, many times the 'black listed' status has manifested by the fact that my next trade was slipped so badly, that it had wiped out ALL the profits from the previous trade (or even more). The bottom line: After 6 months - while paying 50% commission (on the successful trades) - I did not make ANY NET profits with the newstraders.
Respectfully I have to disagree. I will try to enlighten my views one last time from a different angle.
1. DEMO trades have unlimited liquidity. This is a fact.
PROOF: Try to trade 100.000 lots on especially on an exotic pair with a BUY STOP or SELL STOP order. You will get the FILL at the BUY STOP or SELL STOP price. What are the chances that you would get the same fill price on 100.000 real lots? Seriously...
If you look at the centralized and aggregated EURUSD Level II quotes on LMAX (which is theoretically the aggregated liquidity from all participating LPs) you would see that the TOTAL EUR/USD liquidity 0.5 pip above and 0-5 pip below the current price is about 50 lots (i.e. in each direction. In other words if you sold 50 EUR/USD lots on LMAX centralized Fx spot market, it would move the market by 0.5 pips. Just imagine what is the Level II liquidity on an exotic pair within 50 pip distance in each direction DURING NEWS. Practically ZERO. Which is why prices fly on exotics during new.
BUT: your demo would get the fill. Why? Even is there were 0.01 lot liquidity when the news comes out, your DEMO would get the fill for 100.000 lots at the same exact price where - in reality - there is only 0.01 lot liquidity.
2. NO SIGNIFICANT EXECUTION TIME DELAYS ON DEMOS DURING NEWS. Another fact.
As stated correctly, most brokers 'B-Book' clients, however, during news events their is a limit on their 'B-booking' internal (virtual) liquidity, i.e. how many lots they are willing to absorb once price starts moving fast. Well, they are NOT THAT STUPID to stand under the falling knife.
DEMOs are executed fast (by 'B-booking speed) internally without limitations. On REAL accounts it is different: Once the broker's designated internal liquidity is absorbed (USUALLY BY SUPERFAST NEWSTRADER BOTS), then they re-route the rest of the orders to their LPs, i.e. by 'A-booking', so within 'no time' thousands of late-coming orders are fighting each other for the LPs' limited liquidity. While the 'fight' goes on for the limited liquidity price moves fast and time goes by (it takes seconds for the LPs to match thousands of orders pouring in)... The larger the order, the later it will find good liquidity and probably at a really deteriorated price.
_______________________________________________________________________________
Addendum: Those brokers who decide NOT to 'A-book' above a certain volume during news will do one of 2 things:
1. Intentionally slip your orders (by virtual dealer plug-ins), and/or open the spread above 50 pips, so you will get a really bad fill during the news.
2. If your BOT is faster interpreting the impact of the news, i.e. it is faster placing orders than the broker's quote server adjusting its bid/ask quotes, then you beat them. So they will claim that you have commited the crime of so-called 'price arbitrage' which is forbidden and they refuse to pay your profits.
I used to be a client of a NEWSTRADER group whose bot was faster than most brokers' quote servers. Why did I quit them? Mostly I was refused to get my profits by the broker, or if I got it from some, my account was placed on their 'black list' within a week, so I had to move my funds to a new broker with all the paperwork and wiring funds back and forth (with the involved wire costs) as I was advised by the newstraders. The hassle was just too much and not worth the profits. Also, many times the 'black listed' status has manifested by the fact that my next trade was slipped so badly, that it had wiped out ALL the profits from the previous trade (or even more). The bottom line: After 6 months - while paying 50% commission (on the successful trades) - I did not make ANY NET profits with the newstraders.
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Jul 29, 2015 at 09:07
@FxMasterGuru we talking about different things!
As i state 17 hours ago, there is no difference between real and demo at the same broker at >H4 tf!
You talking about Newstrading....
Also ALL demos at ALL brokers have limits, which are 10lots and /or 70 open orders - test by yourself! I run +100 demos, my highperformance hedger reach most time this limits in demo! which results in 'error 0'
As i state 17 hours ago, there is no difference between real and demo at the same broker at >H4 tf!
You talking about Newstrading....
Also ALL demos at ALL brokers have limits, which are 10lots and /or 70 open orders - test by yourself! I run +100 demos, my highperformance hedger reach most time this limits in demo! which results in 'error 0'
ixbone@
Member Since May 04, 2012
1608 posts
Jul 29, 2015 at 10:11
(edited Jul 29, 2015 at 10:11)
Sorry, I don't understand what >H4 timeframe has to do with slipping Stop Loss activations, IF those Stop Loss level is activated within the spike caused by news.
Of course, IF we DO NOT consider the impact of NEWS SPIKES triggering Stop Losses (or even BuyStop/SellStop entries)
AND
IF we use >50 pips SL/TP, THEN the difference between DEMO and REAL accounts should be MINIMAL, practically negligible.
In this case I fully agree with you.
____________________________________________________
P.S. It is possible that YOUR broker does not allow opening >10 lots positions in Demo Mode, but I have seen many brokers who allow opening even 1000 lots in DEMO mode. Of course, if one had the necessary leverage for that size.
Of course, IF we DO NOT consider the impact of NEWS SPIKES triggering Stop Losses (or even BuyStop/SellStop entries)
AND
IF we use >50 pips SL/TP, THEN the difference between DEMO and REAL accounts should be MINIMAL, practically negligible.
In this case I fully agree with you.
____________________________________________________
P.S. It is possible that YOUR broker does not allow opening >10 lots positions in Demo Mode, but I have seen many brokers who allow opening even 1000 lots in DEMO mode. Of course, if one had the necessary leverage for that size.
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Jul 29, 2015 at 11:15
FxMasterGuru posted:
P.S. It is possible that YOUR broker does not allow opening >10 lots positions in Demo Mode, but I have seen many brokers who allow opening even 1000 lots in DEMO mode. Of course, if one had the necessary leverage for that size.
Tested with active, FXPro, FXOpen, JFD (all error 0) now testing Instaforex
NO Coding fault! Order is executed and logged by the EA, but broker returns 'error 0-no order is opened', after manuell counting of all open orders:
if <70 open orders, new orders are executed as coded.
if >70 open orders, no new orders are executed, if existing orders closed (tp,ts,..manuall or automated) now <70 open orders, the waiting order is executed regular...
Also somethimes there are <70 open orders but sum lot reaches 10 lot, mabe its a combinationen, to survive demo accounts, because faulty ea's may open tousends of orders...which can compromise the demo server.
Strategy is a highperformance hedge system on 20 pairs, so its possible but not a must one pair get 10 open orders (5 buy, 5 sell).
ixbone@
Member Since May 04, 2012
1608 posts
Jul 29, 2015 at 13:33
You could try placing large manuals order - with full available leverage - to see what is your broker's max. order size limit.
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Member Since May 04, 2012
1608 posts
Jul 30, 2015 at 06:56
danielsoy posted:
OMG!
So whats the point to trade with a market maker anyway?
To make him rich... What else...?
Forex is a swampy jungle filled with predators (i.e. brokers)... If someone has not noticed.
I have just found out today that my PEPPERSTONE ECN account has received the 'Virtual Dealer Plugin' Parasite... BIG TIME!!!
If you want 'clean' and fair market conditions, move your trading strategy to the Futures markets. Those are CENTRALIZED and really REGULATED.
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