To trade successfully in the forex market, of course, you need to have a profitable trading strategy. A trader can create it himself, or use a ready-made TS. It can be easily found on one of the Internet projects of the relevant topic. Before you start trading with real money, you need to check the effectiveness of the strategy. This can be done using historical data or trading on a demo account. But there is one problem. Quite often, a TS that has shown good results in the testing process behaves completely differently in real trading. A trader not only does not make money, but also often drains his deposit. The question arises: why testing strategiesdifferent from real trading? As practice shows, there are very specific reasons for this. I want to talk about them in this article.
Reasons for the difference between the TS testing results and real trading
Let’s start with history. Testing strategies on historical data using special programs (testers) does not always provide objective results. The fact is that for a competent assessment, you will need to download a large volume of quotes for a specific trading instrument. Unfortunately, there are crashes during the download process. As a result, we simply do not receive some of the data for past periods. And hence the distorted test result of the TS. What can be done in this case? I only see one option. You will have to download quotes several times and, accordingly, test strategies several times . This is the only way to get a more or less accurate result.
Now let’s move on to the demo account. Successful testing of a TS in demo trading also cannot be a guarantee of earning money on a real account. The fact is that the servers for real accounts are more loaded. In addition, serious brokers display transactions on the interbank market. All this leads to a slowdown in the execution of trade orders. The terminal may freeze. And this, in turn, affects trading results to a certain extent. There are no marked factors on the demo account. Trading is carried out, one might say, in ideal conditions, which, unfortunately, differ from real trading.
Finally, there are no emotions in trading on a demo account, which can be fully experienced in trading for real money. The trader trades in a relaxed manner, since he has no responsibility for the safety of the deposit. When he starts trading with the same TS on a real account, the psychological background becomes completely different, which will certainly affect the trading results.
As you can see, testing strategies is just a general assessment of their suitability for trading. Therefore, when switching to a real account, you must be careful not to rely on quick and easy earnings, as it was on a demo account.