ways to practice / backtest trading strategies?

Discussion in 'Forex Brokers' started by noyou, Feb 10, 2010.

  1. noyou


    Hi, all,

    I am a newbie to Forex, trying to practice my strategies, I can think following 3 ways to practice

    1.use forex tick data to practice
    Where do I get the relatively cheap tick data?
    Which software or system I can dump the data to practice?

    2. use Demo account to practice
    Which broker can provide decent demo account?

    3. use simulation software to practice
    Can simulation show realistic trading situations?
    What are most commonly used simulation systems?

    So, what are the pros and cons of above system?

    How do you guys generally backtest your strategies or trading ideas?

    Any guidance is greatly appreciated.
  2. MetaTrader 4 is a quite good charting/order entry program available from many fx
    brokers around the world, i use an unlimited demo from http://www.alpari-us.com/

    a demo account means being able to enter and close trades with 'play' money and is a
    good idea for newbies to learn as well as experienced traders to test strategies but,
    for the newbie it is very important to trade with a very small amount of real money in the
    beginning in order to experience emotionally and psychologically how they respond to
    taking a loss, losses

    besides the e/p of loss, there's not blowing-out your account and losing all your money
    many fx brokers now offer micro accounts http://www.forexmicrolot.com/ min: $25 and
    at http://fxtrade.oanda.com/ you can open an account with $1

    so lets say you have $10,000 available to trade fx but will only enter the market with
    10% of that amount, you could open an account with $10 or $100 and use only 10%
    ie $1 or $10 to trade with and experience 'real' trading. the only thing is that with such
    a small account, the newbie having blown-out the account might say 'oh well, it doesn't
    matter, it was only $xx or $xxx'

    managing loss is part of the trading strategy, how do you know you've got a losing trade ?
    what are you going to do ? are you going to rely on Stops ? etc, plus a series of losses
    may change confidence to fear of trading - e/p and being unable to enter trades

    forget about tick data, MT4's minimum timeframe is 1min, Oanda has 5, 10, 30 sec
    charts, i use MT4 for analysis and trade via Oanda for instance; the 'ticks'/volume of fx
    platforms is price changes only, FXGame is the name of Oanda's demo