Differences between demo trading and live trading

Quote from rickty:

If you're using OEC please be aware that their demo (simulation) account does not model a real account accurately. I've had automated systems produce better results on the same day using the demo system than on the real system. The demo system does not take into consideration the bid-ask spread adequately, if at all. IB's simulation account in much better.
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Yeah that's what I'm using. hmm...

Can I get an IB demo account without opening a real account or depositing money?
 
Quote from 1a2b3cppp:

How come sometimes you demo trade profitably for months and then go live with the same exact strategy giving the same exact signals but lose money?
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maybe you can discuss your live trade, what was your position?
What was your profit target and stop. There was a guy named Richard Donchian who had what was called the 5/20 system. This was a simple moving average crossover system that went long when the 5 period sma crossed the 20 period sma and vice versa. Simple but a complete system. A trading system however simple should get you in and out of a trade. Also, you have to add commissions, slippage (not getting your price) into the mix, not to mention being wrong. The reason his simple system worked was due to its being able to catch a trending market which made up for all the chop, commissions, etc. Like baseball you can stay alive as a batter with singles but you need a few home runs to get ahead. If you get lucky on one big trend trade it pays for a lot of losers, just one opinion.
 
Quote from kinggyppo:

There was a guy named Richard Donchian who had what was called the 5/20 system. This was a simple moving average crossover system that went long when the 5 period sma crossed the 20 period sma and vice versa. Simple but a complete system. A trading system however simple should get you in and out of a trade. Also, you have to add commissions, slippage (not getting your price) into the mix, not to mention being wrong. The reason his simple system worked was due to its being able to catch a trending market which made up for all the chop, commissions, etc. Like baseball you can stay alive as a batter with singles but you need a few home runs to get ahead. If you get lucky on one big trend trade it pays for a lot of losers, just one opinion.
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Thanks. I don't believe that crossover systems work (based on backtesting), but if they do work, then it would have to be like how you said, where a huge home run makes up for everything else.
 
I am not trying to talk down to you but I have no idea of your background from your post. Did you understand system trading if so what is your background and what was the trade?
 
Quote from kinggyppo:

I am not trying to talk down to you but I have no idea
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I didn't think you were talking down to me. I just don't think MA crossovers work.


Did you understand system trading if so what is your background and what was the trade?
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What exactly do you mean by "system trading"? I understand system trading enough to follow a system. There were many trades i lost money on today.
 
Quote from 1a2b3cppp:

How come sometimes you demo trade profitably for months and then go live with the same exact strategy giving the same exact signals but lose money?
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The key word in your question is "you." Bingo.

The only emotion is papertrading is winning. You don't feel a loss. Cash trading is felt both ways, and at every step of the trade. No amount of papertrading will prepare you for cash trading.
 
1a2b3cppp,

This is your first live (real money) of trading and your already showing signs of being too emotional.

How do I know that?

At the time of my message post you already have 11 messages here at a discussion forum in one trading day (today)...

A trading day that's your first day of real money trading.

In contrast, a discussion forum should be last on your priorities while preparing for the next trading day and relaxing after choosing one of the most TALKED about trading day's all year...

Talked about prior to the opening bell and TALKED about more as the trading day progressed which was like a big bullseye that today was not a trading day for inexperience traders.

It's a trading day many won't forget for a long time.

Simple, go to bed and get some rest because it's obviously been a long day for you especially since EliteTrader.com isn't going anywhere...

It'll be here tomorrow.

Mark
 
I will second Mark's comment no need to rush. This is a tough market with huge swings potentially in either direction. This is from collective 2 as far as system trading:

"trading system" is a set of rules or computer algorithms which decide when to buy or sell, and what to buy or sell. Trading systems (sometimes called "black boxes") replace emotion and instinct in trading. Many hedge funds use trading systems to guide their trading.

Trading systems are typically generated by complex computer software (but not always). Each is organized around a general set of principles: "buy undervalued stocks," "sell futures when price movements accelerate," "buy Yen when Euros are overvalued," etc.

http://www.collective2.com/


My point was that anything that gets you in and out of a market with a stop and profit target can be a system, whether some whiz bang black box or buying on some sort of signal macd, rsi, etc. google the turtle rules pdf to read about a full system and why it is useful. I am assuming here you are trading small and with stops. You have to in this market or you can lose your whole account in one day. Good trading to you. :)
 
Quote from 1a2b3cppp:

How come sometimes you demo trade profitably for months and then go live with the same exact strategy giving the same exact signals but lose money?
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here is why:
1-no emotions of risk or loss with demo
2-real money emotion can cloud judgement
3-in demo trading you usually risk more than you would trading with real$$$...so your rish managment strategy becomes off
...I belive personally that demo trading is worthless...my thoughts...
 
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