DEMO ACCOUNT vs LIVE ACCOUNT
Nov 18, 2016 at 12:24
Madjarrah posted:leopoldo posted:xgavinc posted:
I compare it to driving a vehicle on a dirt / farm road (demo) vs. driving in traffic on tarmac (real)... you learn about driving in both circumstances, but you don't know stress till you hit traffic for the first time.
Good comparison! I would even say that driving without traffic (demo) is not a real driving, it's just a skill to make the car moving 😉 However, real trading sometimes can be quite bumpy as well 😄 Demo is the initial condition before the live account. It also helps when testing different brokers in terms of spreads and platform stability.
I always believed that such thing as platform stability is more about broker services and not type of account? Or what exactly do you mean under stability definition?
I'm guessing it has to do with slippage and out of price quotes, hardly ever replicated in demo. Also some brokers will have higher specs on real trading servers (performance), so the likelihood of disconnections are more on demo. Demo is a testing and development environment and real is production, period. How many real trades have not executed or have been rolled back and cancelled due to volatile price movement? this simply does not happen on demo accounts, all trades are executed if connection persists, even if there realistically is a quote void (no opposite positions).
For every loss there should be at least an equal and opposite profit.
Nov 20, 2016 at 07:42
mlawson71 posted:
I was anxious about trading with real money for quite a bit longer than six months. I did not have the skill, experience and confidence to do so.
Looking back I also could have waited more I think 😄 But I started small to get the feeling of trading real money.
Membro Desde Dec 11, 2015
1487 posts
Nov 25, 2016 at 12:20
NEEnah posted:mlawson71 posted:
I was anxious about trading with real money for quite a bit longer than six months. I did not have the skill, experience and confidence to do so.
Looking back I also could have waited more I think 😄 But I started small to get the feeling of trading real money.
I didn't start nearly as small as I should have and that was the problem, unfortunately.
Membro Desde Sep 12, 2015
1948 posts
Nov 25, 2016 at 12:48
xgavinc posted:The only time your trade gets pushed through the 'real trading server' is when you have a habit of winning more times than losing.Madjarrah posted:leopoldo posted:xgavinc posted:
I compare it to driving a vehicle on a dirt / farm road (demo) vs. driving in traffic on tarmac (real)... you learn about driving in both circumstances, but you don't know stress till you hit traffic for the first time.
Good comparison! I would even say that driving without traffic (demo) is not a real driving, it's just a skill to make the car moving 😉 However, real trading sometimes can be quite bumpy as well 😄 Demo is the initial condition before the live account. It also helps when testing different brokers in terms of spreads and platform stability.
I always believed that such thing as platform stability is more about broker services and not type of account? Or what exactly do you mean under stability definition?
I'm guessing it has to do with slippage and out of price quotes, hardly ever replicated in demo. Also some brokers will have higher specs on real trading servers (performance), so the likelihood of disconnections are more on demo. Demo is a testing and development environment and real is production, period. How many real trades have not executed or have been rolled back and cancelled due to volatile price movement? this simply does not happen on demo accounts, all trades are executed if connection persists, even if there realistically is a quote void (no opposite positions).
"They mistook leverage with genius".
Nov 27, 2016 at 07:39
xgavinc posted:
Demo is a testing and development environment and real is production, period. How many real trades have not executed or have been rolled back and cancelled due to volatile price movement? this simply does not happen on demo accounts, all trades are executed if connection persists, even if there realistically is a quote void (no opposite positions).
That makes perfect sense! No way to get any execution issues (realistic execution) on demo.
Nov 27, 2016 at 07:45
Madjarrah posted:leopoldo posted:xgavinc posted:
I compare it to driving a vehicle on a dirt / farm road (demo) vs. driving in traffic on tarmac (real)... you learn about driving in both circumstances, but you don't know stress till you hit traffic for the first time.
Good comparison! I would even say that driving without traffic (demo) is not a real driving, it's just a skill to make the car moving 😉 However, real trading sometimes can be quite bumpy as well 😄 Demo is the initial condition before the live account. It also helps when testing different brokers in terms of spreads and platform stability.
I always believed that such thing as platform stability is more about broker services and not type of account? Or what exactly do you mean under stability definition?
In this particular case I meant broker server stability (disconnections) which can reflect on the platform. But xgavinc also added a good point.
Need for speed!
Membro Desde Sep 12, 2015
1948 posts
Nov 28, 2016 at 12:03
NEEnah posted:If you win on your trades most of the time on a large account they risk out your trade to the banks and other large players , other trades are in house.snapdragon1970 posted:
The only time your trade gets pushed through the 'real trading server' is when you have a habit of winning more times than losing.
What do you mean? Not sure if I got the connection with the previous posts quoted.
"They mistook leverage with genius".
Nov 29, 2016 at 15:19
snapdragon1970 posted:NEEnah posted:If you win on your trades most of the time on a large account they risk out your trade to the banks and other large players , other trades are in house.snapdragon1970 posted:
The only time your trade gets pushed through the 'real trading server' is when you have a habit of winning more times than losing.
What do you mean? Not sure if I got the connection with the previous posts quoted.
Ah, now I see. You mean they are kind of hedging themselves this way?
Membro Desde Sep 12, 2015
1948 posts
Nov 29, 2016 at 15:48
NEEnah posted:Yessnapdragon1970 posted:NEEnah posted:If you win on your trades most of the time on a large account they risk out your trade to the banks and other large players , other trades are in house.snapdragon1970 posted:
The only time your trade gets pushed through the 'real trading server' is when you have a habit of winning more times than losing.
What do you mean? Not sure if I got the connection with the previous posts quoted.
Ah, now I see. You mean they are kind of hedging themselves this way?
"They mistook leverage with genius".
Nov 30, 2016 at 08:02
NEEnah posted:snapdragon1970 posted:NEEnah posted:If you win on your trades most of the time on a large account they risk out your trade to the banks and other large players , other trades are in house.snapdragon1970 posted:
The only time your trade gets pushed through the 'real trading server' is when you have a habit of winning more times than losing.
What do you mean? Not sure if I got the connection with the previous posts quoted.
Ah, now I see. You mean they are kind of hedging themselves this way?
No, not a hedge. The broker takes the opposite trade (that's not a hedge, it's a trade). Successful traders or larger trades are pushed through to liquidity providers, other brokers, banks or other traders within the same brokerage. Very large trades can be broken up into smaller lots and filled among some or all avenues. A hedge would be if they took the opposite trade and opened another trade to hedge that opposite trade.
For every loss there should be at least an equal and opposite profit.
Membro Desde Sep 12, 2015
1948 posts
Nov 30, 2016 at 12:18
xgavinc posted:The first part of your statement is wrong and not within the same brokerage that's FCA rules.NEEnah posted:snapdragon1970 posted:NEEnah posted:If you win on your trades most of the time on a large account they risk out your trade to the banks and other large players , other trades are in house.snapdragon1970 posted:
The only time your trade gets pushed through the 'real trading server' is when you have a habit of winning more times than losing.
What do you mean? Not sure if I got the connection with the previous posts quoted.
Ah, now I see. You mean they are kind of hedging themselves this way?
No, not a hedge. The broker takes the opposite trade (that's not a hedge, it's a trade). Successful traders or larger trades are pushed through to liquidity providers, other brokers, banks or other traders within the same brokerage. Very large trades can be broken up into smaller lots and filled among some or all avenues. A hedge would be if they took the opposite trade and opened another trade to hedge that opposite trade.
"They mistook leverage with genius".
Nov 30, 2016 at 13:12
snapdragon1970 posted:xgavinc posted:The first part of your statement is wrong and not within the same brokerage that's FCA rules.NEEnah posted:snapdragon1970 posted:NEEnah posted:If you win on your trades most of the time on a large account they risk out your trade to the banks and other large players , other trades are in house.snapdragon1970 posted:
The only time your trade gets pushed through the 'real trading server' is when you have a habit of winning more times than losing.
What do you mean? Not sure if I got the connection with the previous posts quoted.
Ah, now I see. You mean they are kind of hedging themselves this way?
No, not a hedge. The broker takes the opposite trade (that's not a hedge, it's a trade). Successful traders or larger trades are pushed through to liquidity providers, other brokers, banks or other traders within the same brokerage. Very large trades can be broken up into smaller lots and filled among some or all avenues. A hedge would be if they took the opposite trade and opened another trade to hedge that opposite trade.
The FCA only regulates fairness to the customer, transparency of a broker, ensure correct communication to customer, adhere to contracts with customer, manage risk appropriately and provide training or refuse service to customers based on a risk assessment. It does not state anywhere they cannot take the opposite trade (as long as they adhere to FCA guidelines) - So if it says in their T&C's, 'Be aware that we may act as counter party to your trades' and you sign up anyway and agree to the T&C's, and the broker has the required license, then that's good enough for FCA (adequate communication to the customer + license).
'In effect, any Broker claiming an STP/NDD/DMA/PRO offering, may nevertheless “Make the Market” even if only partially (i.e. STP 50% of clients’ orders and make the market on the other 50%). In theory, there is nothing wrong with this configuration as long as the Broker runs an ethical business. It depends on whether the broker has the minimum capital required for the license type the FCA provides [“dealing on own account” - The activity of “dealing on own account” authorises Retail Brokers to Make the Market by taking the opposite side of their clients’ trades], thereby allowing a certain amount of 'B Book' (Market Maker) trades.'
For every loss there should be at least an equal and opposite profit.
Membro Desde Sep 12, 2015
1948 posts
Nov 30, 2016 at 13:44
(editado Nov 30, 2016 at 13:59)
xgavinc posted:That's in an ideal world. https://www.financialreporter.co.uk/finance-news/fca-rule-changes-remove-need-for-firms-to-report-breaches.htmlsnapdragon1970 posted:xgavinc posted:The first part of your statement is wrong and not within the same brokerage that's FCA rules.NEEnah posted:snapdragon1970 posted:NEEnah posted:If you win on your trades most of the time on a large account they risk out your trade to the banks and other large players , other trades are in house.snapdragon1970 posted:
The only time your trade gets pushed through the 'real trading server' is when you have a habit of winning more times than losing.
What do you mean? Not sure if I got the connection with the previous posts quoted.
Ah, now I see. You mean they are kind of hedging themselves this way?
No, not a hedge. The broker takes the opposite trade (that's not a hedge, it's a trade). Successful traders or larger trades are pushed through to liquidity providers, other brokers, banks or other traders within the same brokerage. Very large trades can be broken up into smaller lots and filled among some or all avenues. A hedge would be if they took the opposite trade and opened another trade to hedge that opposite trade.
The FCA only regulates fairness to the customer, transparency of a broker, ensure correct communication to customer, adhere to contracts with customer, manage risk appropriately and provide training or refuse service to customers based on a risk assessment. It does not state anywhere they cannot take the opposite trade (as long as they adhere to FCA guidelines) - So if it says in their T&C's, 'Be aware that we may act as counter party to your trades' and you sign up anyway and agree to the T&C's, and the broker has the required license, then that's good enough for FCA (adequate communication to the customer + license).
'In effect, any Broker claiming an STP/NDD/DMA/PRO offering, may nevertheless “Make the Market” even if only partially (i.e. STP 50% of clients’ orders and make the market on the other 50%). In theory, there is nothing wrong with this configuration as long as the Broker runs an ethical business. It depends on whether the broker has the minimum capital required for the license type the FCA provides [“dealing on own account” - The activity of “dealing on own account” authorises Retail Brokers to Make the Market by taking the opposite side of their clients’ trades], thereby allowing a certain amount of 'B Book' (Market Maker) trades.'
"They mistook leverage with genius".
Nov 30, 2016 at 14:03
I think generally (with all the stink of price manipulation, misrepresented quotes, etc. in the past, and large fines) even brokers with that license will use that as a last resort, only to provide liquidity where there is none.
My point in the beginning was that an opposite side of the trade is not a hedge (would be the same as saying that every trade you make is a hedge). They would have to make another opposite trade of the same pair or offset that trade with something else (Gold being popular). Until you make another correlated trade, it's not a hedged trade.
My point in the beginning was that an opposite side of the trade is not a hedge (would be the same as saying that every trade you make is a hedge). They would have to make another opposite trade of the same pair or offset that trade with something else (Gold being popular). Until you make another correlated trade, it's not a hedged trade.
For every loss there should be at least an equal and opposite profit.
Membro Desde Sep 12, 2015
1948 posts
Nov 30, 2016 at 14:09
xgavinc posted:Corruption is rife licence or no licence , I think I know what a hedge is , but thanks , good that people can read posts like this otherwise they like sheep.
I think generally (with all the stink of price manipulation, misrepresented quotes, etc. in the past, and large fines) even brokers with that license will use that as a last resort, only to provide liquidity where there is none.
My point in the beginning was that an opposite side of the trade is not a hedge (would be the same as saying that every trade you make is a hedge). They would have to make another opposite trade of the same pair or offset that trade with something else (Gold being popular). Until you make another correlated trade, it's not a hedged trade.
"They mistook leverage with genius".
Nov 30, 2016 at 14:25
That's in an ideal world. https://www.financialreporter.co.uk/finance-news/fca-rule-changes-remove-need-for-firms-to-report-breaches.html
That's only for example if an institutional trader does something wrong and management were not aware of it, they cannot be held liable, where in previous rules if this happened the company had to pay a huge fine even though management were not aware of that traders actions. If proven that the were aware of the actions and did nothing they will be liable. Makes sense, imagine being retrenched because Johnny did something wrong and the company had to close down because of a large fine, that's unfair to the company and ethical staff.
I don't have much confidence in regulators though, it will take a lot of retail trader complaints to force investigations.
hmmm, starting to go way off topic now 😀
For every loss there should be at least an equal and opposite profit.
Nov 30, 2016 at 14:27
snapdragon1970 posted:xgavinc posted:Corruption is rife licence or no licence , I think I know what a hedge is , but thanks , good that people can read posts like this otherwise they like sheep.
I think generally (with all the stink of price manipulation, misrepresented quotes, etc. in the past, and large fines) even brokers with that license will use that as a last resort, only to provide liquidity where there is none.
My point in the beginning was that an opposite side of the trade is not a hedge (would be the same as saying that every trade you make is a hedge). They would have to make another opposite trade of the same pair or offset that trade with something else (Gold being popular). Until you make another correlated trade, it's not a hedged trade.
Was explaining for Nina, not you 😉
For every loss there should be at least an equal and opposite profit.
