I have been demo trading Forex for 7 months with one of the ‘Big’ brokers and using their own platform, after finally establishing what I believe to be a consistent strategy and a very good trading plan, I funded a live account with £1000 to make my first small step in to trading with real money.
My trades are all ‘pending orders’ set to economic events on the calendar (I realise this around a high volatility point), ‘orders’ obviously get opened once the price level has been crossed.
On my demo account, orders were getting opened pretty much at the exact price level the order was set at, my on my live account… this is sooooo sooo very different.
I immediately was suspicious of the difference in the way the platform works between a demo and a live account, so today I screen videoed the trade to see in slow motion what was going on.
On the live/funded account, when price moved massively as expected from the economic data release through my Buy order level, it did not open the trade immediately as had been happening on the demo account. The price moved in my favour, through my order level immediately, but the order was not ‘opened’ until a full 9 seconds and 15.9 Pips later meaning that I missed out on ‘ALL’ the profit on that candle.
Coincidentally, the order was only opened at the highest highest point on the candle… this is extremely suspicious.
It just seems to be an entirely different platform and performs in an excessive different way between the demo & live account… to a very unacceptable level… I feel I have been totally conned spending 7 months on this demo platform to experience that the live account platform is totally rigged against me.
Surely this can not be normal practice??? This seems crooked… it totally throws my strategy out of the window and cannot be normal practice.
I very much welcome your comments and experience regarding this.
Reliance on timings of seconds around high impact news events is eventually going to blow up your account. Reaction within plus or minus 9 seconds is too tight to be classed as an edge.
Things behave differently in the real market from demo accounts. Its the same with all simulators. But its swings and roundabouts, sometimes you will get an advantage, whereas today you lost.
For example, today I got a lucky break at NFPR time. I had an open position already slightly in the red when the NFPR’s came out. Price went against me very fast and went past my SL. I was looking at a loss 2.5 times the SL loss if it had triggered where I saw it pause long enough for me to make a decision to exit manually. But then the platform display caught up and turns out the firm had already executed my SL so my loss was only 1.5 times the original SL. Which is bearable but more importantly, the SL was actually executed and my position did not keep on going further and further into the red ad infinitum. I did not have time even though I was watching price to react at the 1.5 times SL level, I never saw it displayed.
Its one of those things. Re-design your strategy. Give yourself a chance.
Thanks tommor for the reply… I have a program that I built that places a buy and a sell pending order ( a non-bias straddle approach) 4 pips either side of current price at about 3 seconds before the exact time economic data is released. I have just had a reply from my Broker, they pointed out that live accounts are subject to Slippage whereas demo accounts are not… on my demo account one of the pending orders would be triggered if the price moves instantly and ‘opening’ the trade at the exact same price level that the pending order was originally placed.
This as I have found out is not how live accounts work. Today the price moved rapidly and crossed one of my pending orders, but it did not actually ‘open’ the trade until a full 9 seconds and 15.9 Pips later… exactly at the highest point of todays NFP highest candle on the 5 min chart… so there was zero profit to be had as the 15.9 Pips profit I should have had was gone due to the delay.
I am only 7 months into learning, and thought this to be a good strategy from the results I was getting on my Demo account, little did I know the results were useless as they did not take slippage in to account, as ‘slippage’ takes out all the profit.
My broker has said that orders can potentially avoid this, they mentioned orders with stops (your price or worse) & limits (your price or better) but they did not expand further so I am wondering if setting either of those would make a difference ?
I’m also trying to work out whether placing simultaneous Buy & Sell ‘Deals/actual Trades’ instead of pending orders could potentially achieve the same goal or are they also subject to slippage? If that is the case, it seems like Forex is a complete losing game if you’re trying to trade economic events full stop.!
It seems like you know what you’re talking about… any further comments would be much appreciated… regards…
I agree with Tommor on this one… but hey there’s slippage and then there’s sliding, and it sounds like you took a pretty mean sleigh ride. Trading news events is like swimming with sharks… exciting but dangerous. You didn’t say which market you were trading, so liquidity could possibly be an issue. One should also appreciate that your tiny orders will get swamped by big orders by the big accounts, some of which may have paid for faster, less delayed trading. I’d try some trades in less hectic market conditions and see if the slippage is still excessive or just different than the Demo account. You could try putting identical trades in each account (Demo & Live) and see what happens… Remember that the Demo trade doesn’t really get executed by the broker (who is possibly the market maker) and is only a theoretical or virtual transaction and so I suspect (guessing) that it is not in the queue like an actual order.
Slippage is unavoidable in all markets Paul, especially when trading gets frantic. The danger in placing “limits” on your trade, whether in pips or percentage execution, is that it might not get executed at all. This is disastrous for stops and I would never do it but you have to decide whether you’d be happy to miss a trade altogether if price sails past your boundary limits. I’d be trying this out with chump change before risking real money for sure…
Cheers Paul. You must be well hacked off to have built something that looks so right and then find it won’t float when you put it in the water.
I don’t normally watch NFPR’s or any news (have in the past) but this week and recently I’m trialling intra-day systems. Things certainly got exciting at NFPR today. Overall I made a bit of money but more interesting was the recognition that my outcome, profit or loss, was random. So I won’t be holding intra-day across NFPR’s again, and I won’t have any pending orders across release either. You can after all get the direction right but get shaken out by crazy volatility. No point trading on luck.
As far as news trades are concerned, closest I have come to doing it anywhere near consistently is by jumping on stocks which have just had results released. But that was just getting in after the market open (these news releases are normally at 7am UK time, an hour before the London Stock Exchange opens) and after the initial volatility had subsided. Its easy money if that’s your thing. Get in around 0820 or 0830, ride until midday at the latest. Your stop is the previous night’s closing price. Strategy works but I got fed up with over-reactive stocks reversing the good moves.
Welcome to the live environment where wide spreads, price slippage and latency in execution is a real thing.
The most risky time to trade is during high impact economic or political news announcements and events. For this reason, many traders avoid opening or close their deals around this time.
Some might make a successful strategy out of it, but from my experience, it is more of a gamble. As what you expect the price to do can be very different to what it does. You also have the above to contend with.
Broker didn’t automatically route to external exchanges although I can’t imagine what you would need faster execution than 10 seconds for trading retail.
Look for a broker that implements something called Direct Market Access (DMA) in order to get immediate execution.
10 seconds to execute a deal is abysmal. I would fire the broker if they took that long to execute my deal.
If you did have access to the order book you would probably see the size and the number of lots available for trading at each price level reducing. The most competitive bid would also be moving further away from the most competitive ask price.
Immediate execution only exists on demo accounts. Live accounts have market execution.
I had the same experience moving from my demo to live account. One of biggest issue was the difference between the spreads which were tight in demo and very wide in the live acc. I can say I am learning new strategies on the live account because all my winning strategies on the demo are giving me a tough time on the live account. Also if you are still mastering things avoid trading in volitile markets and the news they don’t obey the basic technical market trending rules but rather jump on sentiment and sometimes defy fundamentals during the first 15 minutes of an announcement. Things can go south suddenly and by the time you react you might have gone down 20 - 40 pips against you.