Friday, January 24, 2014

Demo Accounts Vs. Real Accounts

The difference between demo accounts and real accounts are usually quite large. There is one particular demo account that is performing very nicely since its inception. The MDP million dollar pips EA has a long trade history on a demo account. I don't know why the vendor does not set up a real account for this. So I researched for a real account on Myfxbook and I was able to find one account that is doing pretty well. Unfortunately there is no way to tell what broker is being used. That information has been deemed private. Here is a screenshot of that accounts performance.


Here you will notice the equity curve has been peaking as of late. with the euro being so strong lately, there has been some nice trending on the long side. Below is a similar account that is with real money trading the Usd/Jpy. You may know the dollar has been really strong versus the yen lately, hence we see a strong trend on the long side resulting in a heavy net gain.


The reason most of the accounts for this EA are in demo is because this is a very sensitive EA. It runs on the one minute time frame and is very sensitive to things like slippage, requotes, and price action differences between brokers. If you can find a real good broker with raw spreads and a cutting-edge price environment, this is a great EA to trade with. You would also need a VPS that is located very close geographically to your broker to keep latency to a minimum. 

To summarize for some EA's that have a strong difference in performance with demo accounts and real accounts, one must do their homework. It does not necessarily mean the EA is a bad one, it just requires more TLC than some of the other ones.