Backtesting, demo, and live trading

Discussion in 'Trading' started by trelco, Oct 5, 2011.

  1. trelco


    What is the difference?

    If I use a pure automated system all 3 should perform the same, correct?

    We have all read that 90% of trader lose money. I want to know why so many make money in demo trading but lose money live.

  2. Nexas


    In theory yes, but in reality even if you are trading an automated system you may at some point get an issue with fills which you wouldn't during demo or backtesting.

    The reason so many do well demo trading and not live is simply that with demo trading you do not have real money on the line and hence you don't have real emotions.

    When you have your own money at play things can get very different. However if you persevere you should hopefully get to a point where you can do similar things live as you demo.