I have a strategy trading on IG Demo that I backtested as much as possible and optimised within certain parameters for each FX Pair that I trade (such as trade time zones etc to turn strategy on/off). One thing to bear in mind with backtests is slippage. In the backtest the system gives you the indicated prices. In the live environment your trades will be susceptible to slippage and no-fills in some cases. This will have further impact on your system. Whilst IG Index have indicated that the demo environment is the same as the live environment, I’m not so sure and I think we should accept lower profit expectations from demo into live.

My system worked well in backtests so I switched to demo and forward testing then live. Initially the system lost money as the backtest code included the command ‘if onmarket’ which was fine in backtest but not in live trading. This blew a small account (£2k) as I didn’t want to override manually something that I had coded to be systematic. Trust the system and all that!

Once I removed that command, the system performed well (forward testing) and ran up 100% over 3 months. Then, over the past month it has lost 50% since the PRT update, as I was using a ‘while’ ‘do’ command, which PRT post upgrade did not like. I replaced (thanks to PRT tech team) with ‘if’ ‘then’ command and all is well again.

Once the system starts trading back into profit on fwd testing I will allocate capital again. All in all, I expect this whole process to have lasted around 12-18 months from inception, coding, testing, live, testing and back to live. There are no short-cuts to easy profits in my mind.