Jump to content

Demo to Live Account - Differences


Guest CNS

Recommended Posts

Hello all,

I've been practicing and learning on the demo account side of IG's platforms and seem to have a solid working strategy that I'm happy with. 

My question is - Is there and wild differences on the 'live' account anything that I need to be aware of, or will the live platform operate in the same way as the demo account. Apart from the obvious that my capital is live, I'm meaning in the fundamental operation of using the account. 

 

For instance I've been using the spread betting side of the system and understand how to open positions, close and using stop & limit levels and happy with my results, when I transfer to the live platform I'm going to open a few positions as and when I feel necessary. I'm just wondering if there is anything which will appear different or if I will be met with any fundamental operating process' - I've read a post on this forum which stated a user was buying shares and they were immediately being sold...

 

Hope any information can alleviate my concerns - thank you for the contributions in advance and keep up the brilliant advice as part of these forums - there's plenty of information hidden in some of the forum links. 

 

Chris

Link to comment

Hi @CNS, the definitive answer is yes and no. Demo is a useful tool for learning the platform, the operation of deal and order tickets and the general mechanics of the thing. Demo is also useful for trialing strategies to get a basic feel as to how they may workout live but there are some differences.

The demo and live feeds are different though not hugely so but on live you will suffer slippage and partial fills during times of increased volatility. As you mention there is a huge psychological difference when going live and a string of losers will shake confidence in any strategy and the  temptation to tinker can be irresistible. Make sure you keep a record of all your trades to give an overall view of how well a strategy and yourself are doing.

Always start out live with the smallest bet size allowed with a view to build up as confidence grows, most do it the other way round. They start out on max bet size and when things start to wobble and the account decreases they belatedly start decreasing bet size to save the account while confidence in themselves and the strategy crumble. They are then left with no account, no strategy and no confidence and that is the story of the majority who take up trading.

So think long term and think to start small with a view to build up. The number one priority to protect your account, making a profit is only number two. 

  • Thanks 1
Link to comment
1 hour ago, Caseynotes said:

Hi @CNS he demo and live feeds are different though not hugely so but on live you will suffer slippage and partial fills during times of increased volatility.

I am curious, is this because it is far too complex to simulate real market conditions on a demo account? As in you cannot simulate how many shares are actually available at the price you ordered.

Also, are you able to cancel the remainder of your order and keep what you've managed to 'catch' if it takes far longer to fully execute than expected? Like a few days where you would pay a commission per day. 

Link to comment

Hi @Ninja,  in a way yes, the live market is too complex to simulate in real time. Demo platforms were developed as test beds for technicians to test and develope new systems for the improvement live platforms and that remains their primary function. Their use as a practice platform for clients is a secondary consideration.

For partial fills there will be a check box to determine the course of action if only partially filled, it will be either accept partial fill or cancel order.

 

Link to comment
  • 2 months later...

@Caseynotes firstly thank you for the response. I didn't even realise that you had responded as I didn't get a notification. 

Thank you for your sound advice and I agree with the advice that profit is secondary. 

 

Thank you for your response. 

 

Chris 

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      21,178
    • Total Posts
      90,701
    • Total Members
      41,286
    • Most Online
      7,522
      10/06/21 11:53

    Newest Member
    Afi
    Joined 29/01/23 11:39
  • Posts

    • Does anybody know the BIL (SPDR Bloomberg 1-3 Month T-Bill ETF) equivalent with a GBP currency hedge? I want the interest yield but I don't want the currency risk.
    • Capital, win loss ratio. If you have a trading edge and you can consistently win 50% of your trades, so your winning 5 trades out of 10. So if your risking 1% of your capital per trade, out of your 10 trades 5 would be losers, so that’s 5% loss and realistically out of the 5 winning trades, some would make small profits, some break even and 1, 2 or 3 could run nicely IF you can let your profits run, basically your making money out of 2 trades out of the 10 trades (80/20 Rule Pareto principle) So a $20,000 acct risking 1% is $200 per trade, this will keep the trader with his trade risk based on being able to win 50% of his trades. A long term trend trader can win with 30% wining trade. Basically you need to know your numbers. Rgds Pete
    • Investing in stocks can be a great way to grow your wealth over time. However, there are different approaches that investors can take when choosing which stocks to buy. Two of the most popular approaches are growth investing and value investing. Growth Investing Growth investing is an investment strategy that focuses on buying stocks of companies that are expected to grow at a faster rate than the overall market. These companies are often in industries that are growing quickly, such as technology or healthcare. Investors who use this approach believe that these companies will be able to generate higher profits in the future, which will lead to higher stock prices. One of the main advantages of growth investing is that it can potentially provide higher returns than the overall market. However, it is also riskier than other investment strategies, as these companies often have higher valuations and more volatile stock prices. Value Investing Value investing is an investment strategy that focuses on buying stocks of companies that are undervalued by the market. These companies may be in industries that are out of favour or have recently experienced challenges, but they have strong fundamentals and a history of profitability. Investors who use this approach believe that these companies are undervalued and that their true value will be recognized in the future, leading to higher stock prices. One of the main advantages of value investing is that it can potentially provide lower risk than growth investing. However, it may also provide lower returns in the long run, as these companies may not have the same growth potential as companies in the growth investing category. Comparing Growth and Value Investing Growth and value investing are two different approaches to stock investing, each with its own advantages and disadvantages. Growth investing can potentially provide higher returns but is riskier, while value investing can provide lower risk but potentially lower returns. An investor may choose one approach or a combination of both. A portfolio that contains a mix of growth and value stocks can provide a balance of potential returns and risk. Conclusion Both growth investing and value investing can be effective ways to invest in stocks. The key is to understand the potential risks and rewards of each approach and to choose the one that aligns with your investment goals and risk tolerance. Analyst Peter Mathers TradingLounge™ 
×
×
  • Create New...