In technical analysis, backtestingis described as an act of simulating the process of trading whilst using a set of rules over previous price data, to see how much money would have been made or lost if a trader had followed the same strategy
For Forex traders, backtesting evaluates the effectiveness of a trading strategy and gives traders the confidence to stick to it at times when their strategy doesn’t appear to be working (whilst others doubt their strategy, especially during a drawdown).
If you are not backtesting, you are hunting in the dark.
Did you know that 78% percent out of all traders don’t backtest?
And did you know that this is one of the main reasons why 78% of the traders fail?
With that being said, calling backtesting anything less than important would be an understatement.
Backtesting is absolutely CRUCIAL for your long-term trading success. It is only through backtesting, one can learn the ins and outs of their strategy and find out which strategies are profitable and eliminate those doomed to fail. And at the end of the day, nobody wants to be chasing shadows in the market.
Lastly, select the right timeframes and click “Start Test”. All historical data will play back on your screen.
You can pause, rewind and fast forward to reach a point where your strategy would indicate a trade. Once done, enter a dummy trade with stop loss and take profit levels.
After the test is completed, forex tester 5 will give you a synopsis of the results. It will look similar to this.
It will also provide you with a detailed breakdown with the option to paste it into your own spreadsheet.
ProFx Club has transformed my trading game. Their signals and insights into new forex trends are invaluable. Plus, they even offer tickets to exclusive events.