Quote:
Originally Posted by lolpie
I'm new to Forex trading, and I'm confused about these results. If someone could help me out I would REALLY appreciate it.
Backtest on Live account:
Because the results looked good, I made the mistake of opening a real account and lost $200 immediately. I then ran a backtest lost $200 there as well. Can someone explain why? All the settings are the exact same in both the demo and live account
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A very important thing to keep in mind is that Forex is a game of statistics. Gambling is also a game of statistics, but the casino always wins in the end. In Forex, there is a chance that we can have the odds on our side. Your trade size was too large for your account size. The 0.2 lot trade size means that each pip = $2. A 200 pip StopLoss means each trade can lose up to $400 (200pip * $2). If your broker lets you, start with 0.01 lots if you want to try something out.
Also, backtest, forward test and live $$$ trading will not get you the same results. The backtest guesses what the market did to make those prices, and it isn't very reliable (quality on upper right hand side should be 90%). The forward test is almost the same as live money trading but you have new things like dealing desks, slippage, changes during news, and in some cases different rules for how you can trade.
Turn off money management for your EAs, and run with 0.01 lots. I manually set the lotsize and leave it there for a few weeks. If your money management is too aggressive you can have -$$ with +pips.