Is a demo account waste of time?

[dbphoenix]

Evidence that it's worth implementing. If a strategy under consideration fails its backtest(s), then there's no point in wasting more time on it.

What did you think backtests were for?

As a prelude to forwardtesting.

 

[i am nobody]

In the ES there are more than 2 million contracts a day. If you buy even one hundred contracts (0,005% of volume) it will not be noticed. Will be filled in seconds.

Paul Rotter has made it - he belongs to the best traders in the world and counts as a real big player. he usually does 150,000 rt/d, sometimes up to 250,000 mostly in BUND/BOBL/SCHATZ futures. And he did not really move the market.

 

[Risk619]

As a prelude to forwardtesting.

you mean out of sample or no-money-live trading?

Eventually the jump has to be made and things you can only poorly estimate (like market impact) will be realized.

A back tested system that functions well with real data and that has best approximated real trading land (slippage, etc) is a good a candidate as any.

I get the concept of over estimating the value of backtesting, but by the same token only a fool would bet against a solidly thought out and tested strategy.

 

[dbphoenix]

you mean out of sample or no-money-live trading?

Eventually the jump has to be made and things you can only poorly estimate (like market impact) will be realized.

A back tested system that functions well with real data and that has best approximated real trading land (slippage, etc) is a good a candidate as any.

I get the concept of over estimating the value of backtesting, but by the same token only a fool would bet against a solidly thought out and tested strategy.

Too much to cut and paste: Developing a Trading Plan

 

[d08]

I speak about my personal experience, that's all I can speak about. I do trade the ES, what others do is not important for me. For me demo trading approaches real time trading.
You speak probably about traders who stay seconds or minutes in a trade as they make very small profits. I keep positions in general for 1,2 or even 3 hours. I always have fills in seconds and demo prices are very close to market prices. I can check this by comparing, after closing of the market, real prices with demo prices. For me it makes sense. So there is not 1 simple answer to the question of the OP.

Not at all, I stay in trades for hours but trading with a lower profit factor. I have no doubt that I'm impacting the price.
But I agree that there is no simple answer to this, it entirely depends on what one is doing.

 

[d08]

Paul Rotter has made it - he belongs to the best traders in the world and counts as a real big player. he usually does 150,000 rt/d, sometimes up to 250,000 mostly in BUND/BOBL/SCHATZ futures. And he did not really move the market.

If he would put that size up all at once, what do you think would happen?
Even smaller size moves markets, it's a basic supply and demand principle as it's a marketplace not unlike a physical one.

 

[i am nobody]

If he would put that size up all at once, what do you think would happen?
Even smaller size moves markets, it's a basic supply and demand principle as it's a marketplace not unlike a physical one.

I agree he would move the market with all contracts at once. Just wanted to show that you can do 100 contracts ES ( in several orders) without really moving the market, it is my personal experience too. I already placed 1 order for 100 contracts without any problem in past, with fast partial fills. Of course not when there is no volume, timing is important. But most of the time it is not a problem. If Rotter would do only 100 contracst at a time he would have to split up his volume in 1000 to 2500 orders, which is not realistic. So he did more than100 contracts at a time. He traded in the period of 2005, we are now many years later and volume has increased significantly.

 

[bgk]

In demo environments, you don't influence the market while with real trades, you do. That's a big difference.

Demo is good for learning the platform, order types and getting comfortable with systematic execution but that's about it.

Yes,it's all about learning but isn't that what is going to help in the real trade? Do you think it is a waste of time?

 

[Turveyd]

Yes,it's all about learning but isn't that what is going to help in the real trade? Do you think it is a waste of time?

Demoing isnt a waste of time, but it wont solve the main issues, which only trading with real $$$s and going slightly mad, will get you over.

Its a waste of time to me, demo millionaire, live i'm an other thinker and worrier.

 

[theapprentice]

This thread is comical. People who do well in demo but fail with real money have psychological issues, not trading strategy issues. The notion that everybody can do well in demo is too hilarious to take seriously.

I'm glad you said this.
I often read people say ''Oh, demo trading is easy. I make money everyday on demo, but generally lose money when trading live''.

I often hear this from people who are MUCH newer at this than me, and I think ''It took me AGES to get better than breakeven on a demo account! Why is everyone better than me?''

I now think that these people think of 'demo trading' as, taking a position and just waiting for it to hit a profit target and not worrying about stops etc. A big demo account can take a lot of 'heat', and besides, even if it blows up, you can just reset it again!

I always treated demo trading as a live account and was very strict and disciplined with it, and as a result, the results were very close to those that would have been given on a live account. i.e - It's bloody hard to be consistently profitable!