The Easy Way to Test Currency Exchange Systems
Original post by best forex software
First you can use backtesting. The last six months or whatever period you choose. This doesn’t take too long as you can rapidly scroll through historical charts searching for the signals that would have led you to make a trade if you had been operating your system live at that point.
For this reason, it’s best to backtest over the longest possible time and perhaps split your tests so that rather than testing, as an example, one full year when the market might have been especially robust or feeble, take the 1st quarter of year 1, the second quarter of year two, etc so you test one 3-month period from annually of four years. This gives you a good period spread without requiring you to cover four whole years. Here you are working with the live market but not using real money. This method is slower because you’ve got to wait for your signals to come up in reality. On the other hand, it mimics real live trading techniques with the possibility of slippage and other considerations which aren’t gong to show up in back testing. Or you may use many demo accounts. Foreign exchange demo accounts also have the advantage that you are developing your live trading abilities and familiarity with a software platform and charting service at the same time as you are running your tests. This gives you solid real time coaching to prepare you for the present when you go live with real money. Most foreign exchange brokers will supply free demo accounts which you can use to check currency exchange systems.