What you plan is not what you get

I have an EA that runs well on demo account but fails miserably when used on a live account. Why?

I am sure you have encountered this and the first thing you probably did is to say the strategy fails, then drop the EA and look for the next holy grail.

The truth is - there are many differences using a live account as opposed to a demo account. Let's explore a few of them:

1. Complex-previous-trades-dependent strategies - this is a curse of automation; with the ability to execute complex trading strategies because of automation, strategies that hinge on a previous or many previous trades are doomed to fail. Why? When the sequence is broken, you will not be able to recover, even though you may have put in alot of mitgating actions to counter this break.

2. Someone at the other end will figure out your strategy and plan for your failure. You can't trust anyone, no, not even your broker. Do a google and find many horror stories. Someone will claim to have been cheated by broker A. Another may say that for all the years with Broker A, he has no problem.

3. Have you encounter many error conditions like lost connection, trade with wrong prices, etc? How genuine are these error conditions? If your EA does not forsee this, and if you do not incorporate the "right" mitigation strategies, your account can be wiped out either slowly or quickly, but surely.

4. You won't believe the things that can happen. For example. you execute a trade. Your EA thought the trade was executed (even though you have put in extra checks) and the other side happily drop your request and not even informed your EA - in the name of an error condition.

5. Really the truth may be that your EA was not written properly and not doing what you wanted it to do.

Just be aware that real trading account is different from a demo account. There will be some winners, and some losers. You need to lose so that someone else will gain. Tread carefully...