Forward testing: demo first or micro-live first
Posted: Sat Oct 31, 2026 6:59 pm
After a backtest, the next step is a forward test. Two options exist: a demo account or a live account with tiny size. They answer different questions.
Demo tests the logic and software in real time, with no capital at risk. But fills are often idealized, and psychology is absent. Micro-live tests actual execution, including slippage, rejections, and the emotional experience of real money, even if small.
For scalpers, execution is the main risk, so micro-live provides more useful information. The cost is the real losses from learning, which are limited by size.
A sensible sequence is brief demo testing to catch bugs, then micro-live for a defined number of trades, with predefined criteria for success. Compare live metrics with the backtest: slippage, fill rate, average win and loss, and trade frequency.
Differences should be explained before scaling. If live costs are higher than modeled, update the model and re-evaluate profitability.
Scaling up should be gradual, with checks at each step.
What criteria must a forward test meet before the size is increased?
Demo tests the logic and software in real time, with no capital at risk. But fills are often idealized, and psychology is absent. Micro-live tests actual execution, including slippage, rejections, and the emotional experience of real money, even if small.
For scalpers, execution is the main risk, so micro-live provides more useful information. The cost is the real losses from learning, which are limited by size.
A sensible sequence is brief demo testing to catch bugs, then micro-live for a defined number of trades, with predefined criteria for success. Compare live metrics with the backtest: slippage, fill rate, average win and loss, and trade frequency.
Differences should be explained before scaling. If live costs are higher than modeled, update the model and re-evaluate profitability.
Scaling up should be gradual, with checks at each step.
What criteria must a forward test meet before the size is increased?