Can I trust an EAs results in a demo account?

I have been demo trading with the avonko EA for months now, I keep redownloading MT4 to open new demo accounts every 30 days. I have been apprehensive about starting to trade with real money until this month.

I have followed all of the guidelines that came with the Avonko EA in trading on my demo accounts and I have watched all of my play money balances just over double themselves in about 8 weeks. Now obviously it may be a lucky streak, but in general, should I assume that these results are the same as I would have seen with a real money account?

I read a lot of posts that seem to suggest that brokers take advantage of customers’ stop loss orders, and I would assume that this doesn’t apply to demo accounts. Would this practice maybe mean the difference between a profitable EA and garbage, when taken from a demo account to a live account?

Sorry if I’m trailing on, but I’m very excited about the demo results I have seen, but at the same time I am very nervous about risking something like $5,000 to start gambling for that same return. I want to make sure I don’t overlook anything in the shift.

Thanks all.

It’s been my experience that demo accounts are similar enough in nature to that of a live account. Slippage is prone to happen in a live vs a demo, but that’s the extent of the differences. And even then, it’s not that big of a deal as some make it seem to be.

The drastic difference between the accounts generally lies in the psychology of the trader. It’s easy to ride out a trade in demo than it would be in a live account. Emotions tend to run higher. Decisions you would make as a demo, you might not be so likely to make in a live account.

I mostly agree with MGs comments. I think that trading times will also have an effect which results in more requoting. You will quickly discover this - hint stay clear of NFP.

I suppose I am mostly referring to price action, since most of the trading I am doing now I let the indicators handle and set tight stop loss and take profit points, and assuming I do the same thing in my real money account will the results track those of my demo account accordingly? I just worry that I’m getting ahead of myself and for some reason the good results I see in demo will be absent as soon as I switch to live trading with the EA I am using. Thanks guys for your helpful posts.

Two words :

  1. Spread
  2. Open bar

some EA are build on Open Bar and not close or median. You if it is scalping EA, it will generally give you good result in demo since they dont considere the spread reality of the broker.

Mudar said it. A realistic spread simulation is so important for many strategies and MetaTrader 4 doesn’t even bother!

It just fixes the spread as whatever it is when you start the EA backtest. This means that for short length trades the results from the backtest can be substantially different to what they’d be under real conditions - AND the results of testing the same EA can vary depending on what the current spread is when you press the start button!

This won’t affect the results as much if you are trading on much longer time frames but it can be a disaster for shorter time frames.

Also be aware that the granularity of the backtesting data may not be good enough for what you want. The best you’ll usually get is minute data but if your strategy relies on a more accurate entry and exit your backtesting results will be less accurate.