[jarelj]

What should one expect for differences in order execution times in a "Live" trading environment vs. the "Paper" trading environment? I've been practice trading the ES on the OEC Trader software for a couple of weeks now and working on my strategy. I'm curious what others have experienced on this platform or others on the execution of orders in the live system. I'm assuming that fills won't happen as fast, or rather some orders that are getting filled at a price on the paper system may not actually be filled at that price on the live system? I'd like to know what to expect before going live with real money, how big of a difference is there?

[Tams]

Originally Posted by jarelj »

What should one expect for differences in order execution times in a "Live" trading environment vs. the "Paper" trading environment? I've been practice trading the ES on the OEC Trader software for a couple of weeks now and working on my strategy. I'm curious what others have experienced on this platform or others on the execution of orders in the live system. I'm assuming that fills won't happen as fast, or rather some orders that are getting filled at a price on the paper system may not actually be filled at that price on the live system? I'd like to know what to expect before going live with real money, how big of a difference is there?

ES is very liquid, the fill time is very fast. If you are entering market orders, expect some slippage (1 tick for sure, be prepared for 2 ticks.)

if you are in a distance locale (ie not in North America), you should test your internet for latency.

if yo uare new to trading, you should use limit order instead of market orders. You will have better control of your entry price.

Good luck.

[NowTheMoment]

Originally Posted by jarelj »

What should one expect for differences in order execution times in a "Live" trading environment vs. the "Paper" trading environment? I'd like to know what to expect before going live with real money, how big of a difference is there?

Hey, Jareil

The only difference between paper and live trading are your emotions and account balance. Practice your methods on a chart replay and demo paper account. i find playing a day session back to have been very helpful.

[jarelj]

I did contact OEC and they said that their demo system does mimic "live" fill times as much as possible by staging the orders in a que to be filled, rather than just triggering on a price being hit like some other demo systems. But they said it still wasn't a completely true representation of what the actual live fills would be. I've been trading on paper for a couple of weeks now and doing well with it, so just trying to make sure I know what I'm in for when I go live with it.

[NowTheMoment]

Originally Posted by jarelj »

I did contact OEC and they said that their demo system does mimic "live" fill times as much as possible by staging the orders in a que to be filled, rather than just triggering on a price being hit like some other demo systems. But they said it still wasn't a completely true representation of what the actual live fills would be. I've been trading on paper for a couple of weeks now and doing well with it, so just trying to make sure I know what I'm in for when I go live with it.

Try Infinity Futures you can trade on the demo with real time data and charts.

[Cruiser]

Paper trading is different on different systems.

The first question is whether the system you are using has data and actions that are as real time as their live system. Most are. The second, and bigger question, is whether the fills are realistic. Since you are not actually buying and selling this can never be 100% like live trading and most paper/sim systems show a better fill rate than live trading. What this means is that you will probably get better fills on a paper/sim system then in real life. The smaller your profit target the bigger the difference this makes. If you are swing/position trading and looking for 20 or 50 points and have stops that are 3 points or more then this will seldom make a difference. But if you are scalping and taking profits of a couple points or less then your sim/paper results will be very unrealistic. For example with many sim/paper systems you can go into a slow market where price isnt' moving much and put in a limit buy at current price, get filled, then enter a limit sell at a couple ticks profit and you'll get filled. Very small sim/paper profits but do this for an hour and you'll think you're the master of the trading universe and found 'the answer'. Do this live and you'll quickly find out that you never get filled at the price you want to buy or sell at and do nothing but lose money - unless this is part of some other successful strategy.

If you are trading a very liquid contract like the ES during higher volume (day market) hours then the difference will generally be only one tick on the fills. In other words your fills will probably not occur unless price goes one tick past them and/or your profits on a round trip trade will be 1/2 point (2 ticks) lower than the sim/paper trade.

On more thinly traded contracts, or even ES in some of the slower overnight hours, there could be a larger margin with several tick differences between sim/paper and live fills.

The above is the biggest technical difference. Beyond that is the wide world of psychological differences. Trading the sim/paper 'game' is a whole lot more different than trading real out of pocket dollars.

None the less I feel that sim/paper trading is an essential way to learning to trade with consistent profits. You should always set some sort of consistency goals with a strategy and never trade live until can do it consistently on sim/paper. If you can't make money on sim/paper you'll lose even more on live trading. Unfortunately making money on sim/paper trading does not mean you'll do well on live - but you have to do it first as a step on the way there.

[jarelj]

Just to follow up on this for any future sim-to-live convertees who might read this, now that I've "gone live", yes the fills on the Live system do not match those of the Sim system (at least on Open E Cry). As Cruiser indicated, if you practice a scalping strategy in Sim and it looks like it's too good to be true, guess what, it's too good to be true! Trying to scalp 2 ticks from the Live system is like tearing up dollar bills and throwing them out the window. Put in a limit order and watch the price bounce off your limit 10 times without filling, and once in a while it will actually hit, or if the price moves one tick past then your limit will hit. I had to try it a little bit anyway, but didn't take long to see that yes, it's too good to be true that orders would be filled as quick as the Sim system. So now I've spent a couple of weeks in the trenches learning the hard way what is a trend and what is "noise", analyzing charts, evaluating support and resistance and trading ranges, winning some, losing some, trying to make the winners outweight the losers. Another couple of years and I might actually know what I'm doing!

[TimRacette]

I also use Infinity. Paper trading is great for working out ideas and tuning your methodology, but the real value comes in the experience of pulling the trigger. If you aren't able to trade at least 3 contracts in the futures markets you can always trade the equivalent ETF in blocks of 500, or even 100. The point is that you are involved in the markets and able to scale out. Much more valuable I feel than paper trading when the market is good.