Difference between Demo forward testing, and live forward testing

 

Hey all,


Just had a couple of questions for you all.


Can someone explain what the differences are between the following:


Testing an EA on a demo server (running the EA in live trading mode, or forward testing), vs Testing an EA on a live server (running the EA in live trading mode, or forward testing)


I have heard comments on the forums that the demo data is smoothed, etc, but please remember Im not talking about back testing here. Im talking about running the EA live and forward testing.


Also, if an EA produces results in a forward test, and those results are then clarified by running a backtest over that same data (and it all matches 1 for 1), is that proof enough that the EA is functioning properly and should not matter which data feed its given to get results?


Im also keen on knowing what people know are the main differences they saw between moving from the standard demo accounts you get, to opening a live broker account and then doing further testing with that broker account.



Thanks in advance!

 

A

Simply hitch up an EA on a live account and the same EA on a demo account of that broker.

The EAs will have different numbers of trades and different success ratios.

The main differences are that:-

Tick-count & frequency vary demo-live

Highs & Lows vary demo-live

Response times vary MUCH more on a live server due to varying load

Spread doesnt vary on a demo server

The feed to the demo servers comes off the live servers not off the banking system itself - so is effectively 'smoothed' a bit

...

You can argue the contributing factors but the fact is that they are significantly different.

An EA can succeed on a demo account yet fail on a live one :(

Just look at an M1 chart on a live account and compare alongside the demo chart :eek:

..

> if an EA produces results in a forward test, and those results are then clarified by running a backtest over that same data (and it all matches 1 for 1), is that proof enough that the EA is functioning properly


Functioning ok - yes



> should not matter which data feed its given to get results?


It ALWAYS matters! You can be profitable on a demo (of a broker) & lose on the live of that broker :(



In summary - get it working OK (no order errors etc) & profitable on back & forward testing on a demo account.

Then back-test on live data - making sure you dont 'download history' (which would be MT data)

If you dont have enough history in a new live account, take the data off the live account chart & load it into your History section

..

Good Luck

-BB-







-BB-

 
The main difference is speed of execution. On a demo account the order isn't really being placed so it's instantaneous where as on a real account it can be slower or not filled at all in a fast moving market.
 
BarrowBoy:

A

Simply hitch up an EA on a live account and the same EA on a demo account of that broker.

The EAs will have different numbers of trades and different success ratios.

The main differences are that:-

Tick-count & frequency vary demo-live

Highs & Lows vary demo-live

Response times vary MUCH more on a live server due to varying load

Spread doesnt vary on a demo server

The feed to the demo servers comes off the live servers not off the banking system itself - so is effectively 'smoothed' a bit

...

You can argue the contributing factors but the fact is that they are significantly different.

An EA can succeed on a demo account yet fail on a live one :(

Just look at an M1 chart on a live account and compare alongside the demo chart :eek:

..

> if an EA produces results in a forward test, and those results are then clarified by running a backtest over that same data (and it all matches 1 for 1), is that proof enough that the EA is functioning properly


Functioning ok - yes



> should not matter which data feed its given to get results?


It ALWAYS matters! You can be profitable on a demo (of a broker) & lose on the live of that broker :(



In summary - get it working OK (no order errors etc) & profitable on back & forward testing on a demo account.

Then back-test on live data - making sure you dont 'download history' (which would be MT data)

If you dont have enough history in a new live account, take the data off the live account chart & load it into your History section

..

Good Luck

-BB-







-BB-

 

Hi


I know this thread is old, and I am a total newbie, BUT...

What did you mean by "backtest with live data"? I have backtested my EA with downloaded data (account-less)

Thanks in advance for any clarification!

 

> What did you mean by "backtest with live data

Data accumulated by having MT (and relevant charts) open on a live account (i.e. not a demo account)

> I have backtested my EA with downloaded data (account-less)

This may be better than nothing but is the most smoothed, most averaged data...

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Reason: