Will I have a case against the broker if I run an EA on live and demo simultenously ? | Forex Factory

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Will I have a case against the broker if I run an EA on live and demo simultenously ?

  • #1
  • First Post: May 29, 2010 11:14am May 29, 2010 11:14am
Say I run same EA with same settings on same broker live and demo accounts. And since they are the same settings they will make similar orders with similar Stop loss and TP..etc,

But the demo is +10% after a month and the live is -2% , do I have a good case to file ? Would I be able to get my money by reporting to NFA?
  • #2
  • May 29, 2010 11:26am May 29, 2010 11:26am
Quoting Brb-Fraudin
Say I run same EA with same settings on same broker live and demo accounts. And since they are the same settings they will make similar orders with similar Stop loss and TP..etc,

But the demo is +10% after a month and the live is -2% , do I have a good case to file ? Would I be able to get my money by reporting to NFA?
Nope. Demo accounts have perfect execution and Live accounts do not.

Is there anyway for you to tell if the difference between the return on your demo and live has anything to do with the spread?
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #3
  • May 29, 2010 11:28am May 29, 2010 11:28am
I'm not sure whether you would have a case or not, and I am certainly not qualified to advise on that. But.....even assuming your retail broker is 100% honest, I can guarantee that you would still see very different results from a demo account to a live account.

On a demo account, no one is taking the other side of your trade, It's just an imaginary trade which never actually needs a second party to agree on the price you have selected. So you click to buy or sell at a specific rate, and you are going to get filled instantly. Now go live and everything changes because when you click (or your robot clicks) to buy or sell at a rate, you have to wait until someone on the other side agrees to the same rate. If no one on the other side agrees to the rate, you will not get filled. If you use a market order, or allow for partial fills or a set amount of slippage, you will often get filled at a different rate to what you actually expected. When you trade live you are having to wait for another party to agree to your price, and you are unlikely to get the exact price you choose all the time. And so your live results will always be different to your demo results.
  • #4
  • May 29, 2010 11:34am May 29, 2010 11:34am
Thank you LasV and Flot. I have been trading live for 1 year and I know the difference between demo and live. And actually the bad execution will only begin when I am consistently profitable. I know the difference , but if the difference is big , can I file a report to NFA? I don't want to be that guy who cries on forexpeacearmy when they steal my money.

The point is , evey single broker in the market has horrible reviews , every single broker , with exception to Oanda , but they don't use MT4. So I am really confused where to run my EA.
  • #5
  • May 29, 2010 11:37am May 29, 2010 11:37am
Quoting Brb-Fraudin
Thank you LasV and Flot. I have been trading live for 1 year and I know the difference between demo and live. And actually the bad execution will only begin when I am consistently profitable. I know the difference , but if the difference is big , can I file a report to NFA? I don't want to be that guy who cries on forexpeacearmy when they steal my money.

The point is , evey single broker in the market has horrible reviews , every single broker , with exception to Oanda , but they don't use MT4. So I am really confused where to run my EA.
Is the spread the same between the the live and demo?
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #6
  • May 29, 2010 11:43am May 29, 2010 11:43am
Quoting LasVahGoose
Is the spread the same between the the live and demo?
I am using FXDD and they have very good execution with no problems. I only traded with them from 2 months , made small profit and I withdrew all my money with no problem. I even traded the NFP news with them with no problem.

I am talking about a consistently profitable EA , it won't be profitable if they kept slipping my orders and hunt my stops. So at this point I wonder whats the point of trading Forex!
  • #7
  • May 29, 2010 12:02pm May 29, 2010 12:02pm
Quoting Brb-Fraudin
I am using FXDD and they have very good execution with no problems. I only traded with them from 2 months , made small profit and I withdrew all my money with no problem. I even traded the NFP news with them with no problem.

I am talking about a consistently profitable EA , it won't be profitable if they kept slipping my orders and hunt my stops. So at this point I wonder whats the point of trading Forex!
Look up Ronald Raygun. If anyone knows about EA's and difference between live and demo, it's probably him. I'm sure if you do an advanced search, the topic has been covered already. Hope it helps.

Best of luck.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #8
  • May 29, 2010 2:21pm May 29, 2010 2:21pm
Well complain to your broker. He/they probably need a good laugh.

I thought there were enough threads on live vs demo that anybody with more than a few month's as a member would know the answer.
  • #9
  • May 29, 2010 5:09pm May 29, 2010 5:09pm
Quoting CodeMeister
I thought there were enough threads on live vs demo .
No you thought wrong.

http://www.lmgtfy.com/?q=live+demo+ea+forexfactory
http://www.forexfactory.com/search.p...rchid=10330324
  • #10
  • May 29, 2010 10:12pm May 29, 2010 10:12pm
LasVahGoose pointed me to this thread, and I figured I might as well put in my 2 cents.

A broker's live feed and demo feed are almost never exactly the same. The demo feed tends to be 1-2 ticks behind the live feed. This can have some serious implications in bar formation. On a 1M chart, a live feed's bar close could be the second tick of a demo feed's next bar. It takes only one tick to change an indicator just enough to trigger a signal on one platform while another platform does not get that trade signal.

In your case Brb-Fraudin, since you seem to have both EAs running in parallel consider the following:

 

  1. Is every trade perfectly mirrored between the two terminals? By mirrored, I mean exact order entry time down to the second, the exact entry price, the exact exit price, the exact exit time, everything.
  2. When your orders are being executed, is there any slippage? How much? How long does it take for an order to get filled?
  3. Are there trades that triggered on one account but not the other?

My suggestion would be to read the terms and conditions you agreed to with your broker. There is almost always a clause somewhere which basically states that the demo price is not always indicative of the live price. In short: any demo testing of an EA is effectively invalid for a live environment. If that clause does exist, you're pretty much out of luck.

If it doesn't, go to the broker and ask them if their demo feed is exactly the same as their live feed, if they say yes, ask them why the EA results are different. Be sure to send them a timestamped list of ticks and make sure the the number of consecutive late ticks is at least one hour long. That is to say, ticks from the live feed are also found in the demo feed, but in the demo feed, the ticks are lagging--for whatever reason.

Going to any government agency is wholly useless unless you have lobbyists. I currently have a case file pending with the FTC asking them to investigate someone who I have already proven has used my otherwise freely available EA code and rebranded it as his/her own.

You're only real leverage against any broker is to take your money and find another one. I have the luxury of placing tens of thousands of trades a year, and the brokers I deal with know to treat me very well because I can take away the spread revenue I bring them.

  • #11
  • May 30, 2010 9:33am May 30, 2010 9:33am
Thanks RR but the broker won't benefit from your trades spreads when your EA takes THEIR money overall. I have been reading reviews of all brokers for a year now , and every single broker , ECN ,regulated or whatever , has many cases of stealing money.

It would be really hard for me to sleep while I am running an EA against these guys ,so I think I would stick to manual trading and distribute my money among brokers ,thats of course if I am profitable.
  • #12
  • May 30, 2010 9:43am May 30, 2010 9:43am
You should probably know that not all brokers take the opposite of your trades. There's a difference between a true broker, and a market-maker. One is merely a conduit to a market, and the other is a local market / darkpool.
  • #13
  • May 30, 2010 9:03pm May 30, 2010 9:03pm
Quoting Ronald Raygun
.... the brokers I deal with know to treat me ....
can u tell (here or on PM) who your brokers are?
Thanks
  • #14
  • May 30, 2010 9:29pm May 30, 2010 9:29pm
Are most of the differences from the losses in the live account due to entries or exits? It seems to me should be more with entries. How much of stop loss are you using? Would you post some of the largest losses of live trades and demo trades (pair, entry/exit price, stop, TP, lot size, etc.).

Quoting Brb-Fraudin
Say I run same EA with same settings on same broker live and demo accounts. And since they are the same settings they will make similar orders with similar Stop loss and TP..etc,

But the demo is +10% after a month and the live is -2% , do I have a good case to file ? Would I be able to get my money by reporting to NFA?
  • #15
  • Last Post: May 30, 2010 10:32pm May 30, 2010 10:32pm
As far as execution goes, it really all depends on what kind of trades you're making. Obviously scalp-ish trades depend on quick execution, but if you're entering into a position where you're looking to take around 100 pips of profit, it will hardly matter at exactly what price you get filled at. When you're scalping for 5-15 pips, even a few pips off will make a huge difference. Things like spread and execution become more and more obsolete the more "long-term" your trades are. That said, there are still going to be positives and negatives to all types of trades.
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