From Demo to Live

Hi guys,

Apologies for rehashing this question but after going through posts on the site I couldnt really get what i was looking for.

My question to start with is this. I have been using a demo account for 2months now( on off). I used GCI and have played with most the other free demos out there. Prefer GCI software but thats another topic i have.

What worries me is that after my first demo count expired I started another one and used a system I developed and took the $50k to just over $1,1mil in 5 days now. Before you guys let me have it about high risk and money management believe me i use very strick MM (i play alot of poker). I only open one order at a time and only risk1% of my bank roll. So basically if i have 50 000 i will buy 50 lots. (i started smaller) and now use the 1% rule so i open an order for 1100 lots.

I close position if two things happen. 1. I make profit. any profit will do. 2. I loose more than the 1% I put in. System works well and I havent had any major upsets( touch wood.)

So my question is how different is going from a demo account to a live account. Not asking about emotional betting or anything im asking about technical issues. IE when i close a postion will it close immediately. Or when I buy will i enter the market at that price?

Any advice or questions would be greatly apreciated.

Demo accnts typically don't experience slippage, requotes, etc.

Thanks Opie, How big is the slippage and would it mean i would not make a profit if Im using a very acctive trading pattern which relies on closing a position very quicly?

I can't speak directly about GCI because I haven't used them, but size in general has an effect on market order fills (perhaps not so much on limit orders) The larger the size the more slippage. You may notice slightly worse fills but in general if your average Profit/Loss ratio is high enough it shouldn't be an impact. Just to be safe though, I'd suggest starting at a smaller trading size than you have been to make sure you're getting the executions/results you want and are still trading the same.

You may want to ask this sort of question on the Brokers Forum to see if anyone has specific insights into GCI.

P.S. I have nothing to negate your demo results. Congrats and good trading.

It could. What's your average profit/loss?

well to answer you my ratio is pretty good. At the current bankroll my loss is about $4000 and the profit is about $20 000 to $30 000 depending on slipage.

Or are you talking about over all results? If so I havent had a loss as yet. If i have a bad trade i close it befor it gets any worse. So i loose maybe 6k of the 1mil but i generally reco.ver that in the next few trades

I'm referring to pip amounts to take into account slippage. For example, a 5 pip average trade (wins-losses) probably won't be sufficient especially on large account. And I retract from before when I said "You may notice slightly worse fills" because in order to go from 50K to 1.1M your size must be up there and you could notice a lot worse fills. Slippage could make the difference between a profitable and not profitable system. Also limit orders can alleviate slippage but you risk not getting filled, (a danger on an active trading strategy) and some brokers don't allow limit orders within a certain amount of the current price.

I'm on demo, too (almost no money, however,) and trade fast. About a month ago, an order ran something like 50 pips in under half an hour and I had to close the platform after realizing the requote - bad fill answers would never end. Luckily I was on the right side of the move, only it goes to show that dealing with variables like slippage, requotes and bad fills in demo first is a good idea.
Instaforex is one demo that does these. I had some luck using the 'at best' feature in FXCM, although I'd imagine an ECN, especially at your money, would be more on your side.

the absolute FIRST thing i teach newbs is to open a demo WITH NO MORE THAN THEY WILL HAVE TO FINANCE IT IN REAL MONEY !

a 50k demo for one who will open a real account with 1k is JUST what the brokers want from you, cause they will own your money in days ! (if it takes that long)

a 50K account provides a CUSHION (notice those 50 lots) that you will never ever have with a much smaller amount, and once used to trading the way you are, even scaling it down, will prove a disaster as the margin calls are SO much closer with the lowered equity.

fortunately, most newbs listen and understand and those that dont RAPIDLY lose their equity.

if you wish to prove something to yourself, do it with honor to yourself --- trade a demo with the same amount you will be opening a real account with, otherwise you are LYING TO YOURSELF, and it will bite you in the nether regions harder than you can imagine !

enjoy and trade well

mp

Yup, thanks very much guys

I apreciate all your feed back and I want to comment on mparkers post. Your so right. In fact I did do that for a while, play as if i only had the minum allowed.

Check this out. my main profit comes from a limit order i set. I set it 350 pips and it fills every time there is a spike. I then get ready to close as soon as it recovers and it has yet to fail. In fact the spike has gone as far 900 pips and recovered in 1 or 2 seconds.

How ever if started a live account from what i understand I will only be allowed to do one trade for the minimum amount which means: I will have to risk my entire starting capitol one one trade and i have a feeling it will go horribly wrong. Am I correct in saying this or can i actually open an order with say 1 or 2 lots?

That number of pips per minute and amount of margin, you must be trading only at high-range times (including news) of the week and at extremely low margin. My bad, I should have stated where I am on these. It's not nearly as good, trade fast because avoid big moves mostly and compensate with high margin, which is dangerous for most. Thus, to me, 50 pips is a whole lot. My point stands, however, about the broker's cycle.
There are rare times in forex when a volume spike is so great that it overloads the platform's ability to perform, beyond the usual requote or similar, and that's when you lose all control of your order. If trading in your range buffers from this, then good for you.

On another note:
How you deal with exiting positions early is interesting, especially with your poker experience. Would you give details on this?

Hey pattern,

I recon there is a lot i need to learn but i will have to go live to find out. The spike Im talking about happens pretty often, in a day ill get 4 to 5 of them. Ill start keeping track of what times it is. My worst fear is that while it works great on the demo and all I need is good descipline and patience, will it be same in a live environment.

To answer your question regarding poker, I play online at several different sites as well as live games about twice a week. The basic principles stay in place, no when to fold a loosing hand and take the pot when you have the winning hand. To put that all together, if you have trade going south it is like being behind and your chasing the "RIVER". You land up loosing more often than not doing this.

The other side of the coin is, when you are ahead in the hand (you have a profitable trade) DONT slow play, what that means is dont get gready and try make more from the pot cause you never know what that river will do. So take it while you can.

I apply this to my trading and I have been sick a few times when i have trade that would of doubled its pip size if i had waited few more seconds. But then the old addage rings true. " You dont go bust making a profit".

Hope that answers your question.

hey mparker,

just a quick note. I took your advice so gave myself $250 in my demo. I played lots of 2 and slowly went up. Im at lots 5 at the moment and after 11 trades Im now sitting on $571. I had one loss of $21 which is included.

Again sticking to my set paramaters i have consitantly made a decent profit and Ill stick to playing small. Oh I did put a entry limit in at 10 lots which just executed and I made $317.

SO i have to ask is this total bogus or could I make this work in the real world? Please any input will be great.

If u want to learn how live market work open a live account with the little fund possible, and trade with the little lots allow.
In this way u can learn much more then in demo.

Lubo.

P.s Hower is not the same that trading with higher lots, the felling is different.

I can only say this blood --- my average day is 350 pips with a good day doubling and ONCE tripling that.

I have been doing it for many many years now

From Now on, i will ask YOU for advice because youre MUCH better than I am !

btw, trading small in a large account is still the same thing --- you have all that equity to cover your margin.

enjoy and keep the luck coming

mp