1) Adding Delay in live trading. Different server offer different Bid-Ask spread and offer different Bid price when the currency start to move or trend up/down. So the demo results you get is different from live results and live results also different as its uses different live server, The way to close the gap is to add delay between sampling your strategy. The demo data smallest data is 1 minute. but live data changes every 1 second. By adding in delay of 1 or 5 minute, you are better in closing the gap.
2) Choose Indicate using 15 minutes or 1 hour or 1 day. Demo and live data may be difference when you looking at seconds changes and minutes changes. But if you using indicate like Moving Average, CCI, RSI, Stochastic, Bollier Band, choose a time frame of 15 minutes and above. The difference you have from Demo and Live will be very small. Like wise if you using Open/Close valve or High/Low valve of previous 15M/1H/1D, the indicate will not show much different. Thus closing the gap between Demo and Live data. Avoid using 1 minute and 5 minute data for indicator, during large price movement, will yield different indicator result giving false trigger trades.
3) To buffer 5 to 8 pips of loss. Even after you add in the protection of Bid-Ask difference not more then 7 pips. Meaning, the trade will only execute if the Bid and ask spread is less then 7 Pips, this does close the gap but due to trading server busy, allowance (0 to 2 pips) to match your buy/ask price and the Swap (few pips), always test your simulation with profit setting minus 5 to 8 pips to cover those. And Stoploss setting adding 5 to 8 pips. Else you will see different win/loss trading.
By following the above mention items, you will be closing the gap between Demo and LIve trading. Thank you.
This currency trading book provides readers with real, practical information on how to trade the foreign exchange market effectively. It begins by covering introductory information on the forex market, including basic trading mechanics and the benefits of forex trading, and then goes on to describe specific currency trading methods and skills in step-by-step detail. This includes highly practical information on technical and fundamental analysis, risk and money management, and powerful forex trading strategies. These strategies have proven extremely effective in helping traders play the forex game to win.
JAMES CHEN, CTA, CMT (Montville, NJ) is Chief Technical Strategist at FX Solutions, a leading foreign exchange broker. An expert on forex trading and technical analysis, he is also a registered Commodity Trading Advisor (CTA) and a Chartered Market Technician (CMT). Mr. Chen writes daily currency analysis, leads forex trading seminars, and has authored numerous articles on currency trading strategy and technical analysis for major financial publications. These include Forbes.com, Futures Magazine, Technical Analysis of Stocks and Commodities Magazine, and Stocks, Futures and Options (SFO) Magazine.
Review"Many customers say Essentials is an "excellent" forex trading resource." (TradersPressWeekly.com, 8/18/10)
"…is a concise, easily digested snapshot of the currency market. It is a solid introduction to a trading specialty and probably a better fit for investors already well versed in stocks or futures and looking for a new market opportunity. Chen's edition is a Forex 101, a helpful base that is likely to encourage investors to pursue further study." (SFO Magazine, June 2009)
"…has written this guide to trading in the foreign exchange (forex) market for both novices and experienced professionals. The author explains the fundamental mechanics of the forex markets before launching into the various strategies and insights that have been proven successful in the field." (Book News, May 2009)
"The book is very well suited to the novice trader. The primer on technical analysis offers a great review for CMT candidates. More experienced traders in stocks, bonds, or commodities will benefit from the book's comprehensive explanation of the mechanics in the market. (mta.org (market technician's association), April 28th, 2009)
"Chen's book is the perfect source of knowledge for those who haven't ever traded currencies. Clearly explained, Chen's easy to read style show that he knows what professional currency trading is, focusing on the important aspects that every trader should know. The book covers all important Forex trading related topics." (fxstreet.com, March 11, 2009)
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