Hi all,
Is it safe to assume that all brokers who have a demo account, the demo account matches the live account’s slippage and spreads? When asking some of them directly, they said yes … but want to get the take from the fellow community here 
Thank you!
My broker say “No”- its written in the rules.The spreads are the same, but slippage and execution speed is not the same
When trading on a demo account your broker is essentially the market maker and all your orders are executed by him, internally. Meaning they do not go the to liquidity pool (i.e - open market).
With every demo account there are 2 options - the broker can show you the same charts and movements as it would on a live account, OR it can have the demo accounts trading in a “virtual” market where the movements and charts will not be the same as the ones on live.
In both cases - you will not have slippage (because the order is executed internally at the broker’s server) and your execution times will be virtually non-existent (meaning - instant).
When you open a live account you will have slippage and different order execution times. So, yeah…
No, demo account does mirror trading conditions from live except of slippage and spreads, because server basically executes your trading without sending any request to liquidity providers (what takes some times and lies at the core of slippage phenomenon). Trade news on demo and live and you should quickly understand difference.
IF your broker has set it to…
There are brokers with different settings/charts for demo/live. That is what I tried to explain above… Was it not clear enough?
Actually, spreads should be the same in demo and live accounts. The difference is that the execution would be instant and will always match your price so no slippage would happen. The lack of slippage could be easily explained with the fact that orders are not transferred on the real market as it’s a demo environment so demo orders could not be executed on the real market with demo money. If you trade during news, the volatility, spreads and prices would be the same however on demo there would be no slippage unlike on the live account where on news, slippage is a common event.
Hello,
Actually a broker may never requote a price to a demo account trader, but they might often requote live prices in actual practice.
As we now, the Demo may differs in slippage (in Demo there is not such). But I think that it could differ in execution as well… In live environment it could be slower.
In addition, some brokers do not allow some things on live like the Signals in the Meta Traders for example.
The Demo should simulate the real market conditions, so the trader can make a test of a strategy (this could be Expert Advisor etc.) or to become more familiar with the platforms.
However this does not mean that if you are profitable in demo, it will be the same in Live.
For me it is very important at least the pricing and spreads to be the same…
Hope this could also help.
Hi all,
Thank you for all the replies … very helpful
So how bad can the spread get during news announcements in pips?
Thanks again!
It all depends on particual instrument. Anyway, it would be better to avoid trading in such period unless you have clear plan. There are some strategies based on placing orders below and above of the current price, but they are too risky.
Another way to test the strategy is to use special software. In such case you an use your broker`s data. For example, Forex Tester (popular backtesting tool) allows you to import data from your broker to simulate trades. At the same time, it is extremely important to remember than real trading would be substancially influensed by psychology.
I am staying on demo forever lol…well until I know I won’t lose money.
i only use demo to test the functionality of my code, just to make sure that my open/close trade functions are doing what they are supposed to do, etc…
beyond that, i never play demo… at least play $100.00 real funds and then i dont need to worry if my demo account does the same thing as my live account.
Could you please provide an example of the difference? Do you mean that quotes or delayed or from different source?