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Successful Trading on Demo Account vs Live Account

livenow
Sep 05 2011 at 03:30
4 postów
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
Sep 05 2011 at 17:12
202 postów
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
Sep 06 2011 at 06:40
4 postów
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
Sep 06 2011 at 12:26
202 postów
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
Sep 08 2011 at 01:19
4 postów
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..!!!
Steve Walker
walker36
Sep 08 2011 at 23:41
1341 postów

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


chjungen
Sep 11 2011 at 12:12
9 postów
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
Sep 13 2011 at 21:34
4 postów
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..!!!
AliForexTalks
Oct 22 2021 at 17:51
94 postów
On a real account, a trader will most likely try to close the deal in profit or at breakeven. Many traders make money when demo trading but lose money when they convert to a live account. No Real Consequences — Demo accounts allow you to trade without risk.

Morlulune
Oct 29 2021 at 12:05
19 postów
Of course, traders must prefer live trading, because there is no need to stay on demo for so long. Successful trading on demo means actually nothing. If we compare trading activity with sports activities, then we can state that demo account here is just a training/preparation for competitions, while competitions are similar to trading on live account. Now ask yourself a question, do you get something from preparations besides experience and skills? I guess no. Thus, demo trading is good but traders shouldn't consider it as something where they can become successful. It's a nominal success I think.

croisssan
Oct 29 2021 at 16:07
939 postów
Before starting work, it is still important to work on a demo account. At least, when I started working with a broker I studied on a demo account.

skihav
Oct 30 2021 at 17:08
801 postów
There is a certain relationship here. First, the trader works successfully on a demo account, then switches to a real account. Working with a broker I have come this way and achieved success.

Pezza
Oct 30 2021 at 18:00
62 postów
I think something people underestimate when moving from a demo account to a live account is their emotional state. It becomes more stressful when trading with your actual money. Also, people can put far too much pressure on themselves to be making money straight off. The best way to discipline yourself is to treat the demo account as if it's your own money. Sounds like your methods seems to be working on the demo so start small on a live account before looking to make big profits.

SofieAndreasen
Nov 04 2021 at 08:53
759 postów
Demo performance is always better than live. But both are important for learning.

UweMoench
Nov 04 2021 at 15:18
751 postów
@SofieAndreasen Yes demo performance is always better than real. It's because we don't feel any psychological barrier in demo. And in live trading, emotions play a huge role.

croisssan
Nov 04 2021 at 18:24
939 postów
In order to achieve success on a real account, you need to definitely pay attention to a demo account.

Williamfreed
Nov 05 2021 at 02:02
176 postów
When one joins this business, they know little and are just getting started, and once they sign up for the demo account, they can gain valuable experience and knowledge. Therefore, do not waste time on the demo account for less than 6 months for getting a good experience.

SofieAndreasen
Nov 11 2021 at 12:34
759 postów
I think to be a successful trader need both to learn.

croisssan
Nov 11 2021 at 14:14
939 postów
Success on a demo account does not at all mean success on a regular account. This is worth understanding and prioritizing correctly.

LyudmilLukanov
Nov 11 2021 at 15:46
796 postów
Demo performance is an all-time better compared to real account due to trading psychology.

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