Expert Advisors (EAs) often show different results on demo and real accounts, even with identical account types. Demo environments are idealized testing platforms, while real accounts face market dynamics, broker infrastructure, and external factors. This article explains the key reasons behind these performance gaps.
1. Execution Mechanism Differences
Slippage
Demo accounts typically execute orders with minimal or no slippage based on historical data. Real accounts experience price deviations during high volatility (e.g., news releases), especially affecting scalping EAs where stop-loss and take-profit levels may fail.
Requotes
Real accounts may face requotes due to insufficient liquidity or broker settings, forcing order rejections. Demo accounts rarely encounter this issue, leading to failed pending orders in live trading.
Execution Latency
Demo accounts execute instantly (milliseconds), while real accounts suffer network delays and server load. High-frequency EAs are particularly vulnerable. VPS hosting can reduce but not eliminate latency.
2. Spread and Cost Differences
Floating Spreads
Demo accounts often use fixed or average spreads, while real accounts have spreads that widen during off-peak hours or market openings, invalidating EA entry calculations.
Commissions and Swaps
Demo accounts may not deduct or simplify these fees. Real accounts charge them strictly, eroding profits for EAs holding positions overnight, especially on cross-currency pairs.
Hidden Fees
Some brokers charge additional fees (e.g., slippage adjustments) on real accounts that demos ignore.
3. Data and Market Environment Differences
Data Feed Quality
Demo accounts use historical or synthetic tick data that filters real market noise (e.g., quote gaps). Real accounts include more anomalies like price jumps, causing optimized parameters to fail.
Liquidity Differences
Demos have unlimited liquidity, while real accounts depend on broker liquidity providers. During low liquidity periods (holidays), orders may partially fill or experience increased slippage.
Market Depth
Real accounts have Depth of Market (DOM), but demos typically don't, affecting limit order execution.
4. Broker and Server Factors
Server Configuration
Demo servers are optimized with low load, while real servers may congest during peak hours. Different MT4/MT5 server settings (max pending orders, leverage limits) also vary.
Broker-Specific Practices
Some brokers intentionally optimize demo performance (reduced slippage) to attract clients but enable dealing desk intervention on real accounts. Choosing No Dealing Desk (NDD) brokers can mitigate this.
Account Verification and Restrictions
Real accounts require KYC verification and may have additional risk controls (max position limits) that demos lack.
5. External and Technical Factors
Volatility and News Events
Demos use past data and cannot simulate future shocks (geopolitical events). EAs may crash during unexpected news in real trading.
EA Code Compatibility
EAs running smoothly on demos may be affected by platform updates or DLL calls on real accounts. Check the Journal log for errors.
Leverage and Margin Differences
While account types match, real accounts may have floating leverage or stricter margin calls, leading to forced liquidations.
Psychological and Manual Intervention
Though EAs are automated, users may manually adjust parameters on real accounts, unlike pure testing on demos.
Practical Recommendations
These cumulative differences can cause real performance to lag demo results by 40-60%. To diagnose specific issues:
Compare trade history logs between accounts to check execution price differences
Use VPS hosting to reduce latency
Test on small real accounts as a transition phase
Choose reputable brokers with strict regulation (e.g., ASIC-licensed)
For custom EAs, add slippage/latency simulation parameters in optimization (e.g., MT4 Strategy Tester's Slippage setting)