forex-scalping.com

I compared Monday opens on my demo and live accounts with the same broker over the last two months. The gaps weren't the same.

On EURUSD and GBPUSD:

• Most weeks the open prices were within 0.2 pips of each other.
• Two weeks had a larger difference, around 1 to 2 pips, with demo opening closer to Friday's close.
• Spreads in the first minutes on demo were consistently narrower than on live.

This matters if you test a strategy around Monday opens on demo. The demo picture is cleaner than reality.

I also noticed the demo server sometimes shows the first tick a few seconds earlier than live. For most strategies that's irrelevant, but for anything gap based it changes the results.

Has anyone else compared demo and live feeds directly? I suspect the differences are bigger on smaller pairs.

I did a similar check with a different broker about a year ago, mostly out of curiosity after a gap strategy looked far better on demo than it did with real money. On the majors my numbers were close to yours, usually a fraction of a pip apart, with an occasional week where the demo open looked noticeably tidier.

The smaller pairs were where it got interesting. On NZDJPY and EURNOK the live open was sometimes several pips away from the demo open, and the live spread in the first five minutes was easily three or four times what the demo showed. A couple of Mondays the live account had no quotes at all for nearly a minute while demo was already ticking.

Since then I treat demo as a place to check that the logic of an EA works, never as a source for cost or fill assumptions. Anything that depends on the first minutes of the week gets tested on a small live account before I trust a single number from it.

Geopolitical events and surprise announcements often land on weekends. The market is closed. The news is out. When trading resumes on Sunday evening, price jumps.

For positions held through the weekend, the gap is a risk with no stop-loss protection, since stops only work while the market trades. A stop at 1.1000 doesn't fill at 1.1000 if the first available price is 1.0900.

For scalpers who flatten before the weekend, the issue shows up differently: the first hour of the week. Spreads are wide, prices are unstable, and liquidity is thin as the market digests the weekend's news. Orders fill poorly. Reversal and continuation signals are unreliable.

Gaps in forex are usually smaller than in stocks, since the market trades nearly around the clock and prices adjust ahead through other markets. Still, major events can produce gaps of fifty to a hundred pips or more on a major pair.

Some brokers offer a "guaranteed stop" at an extra cost, designed for this scenario. Whether it's worth it depends on how often weekend positions are held.

Which weekend event produced the biggest Sunday gap in recent memory?