Forex Tester Review: Test Your Trading Strategy on Historical Data
admin on August 8th, 2008
If you’ve been trading your demo account for at least a couple months, chances are you have started using a strategy of your own that combines most of what you’ve heard and read so far. However, because if its very nature, such strategy will evolve as you keep learning new things. Is it changing for the better? Unfortunately, this is not always the case.
Forex Tester Overview
Luckily, there is a tool just for you: Forex Tester allows you to fully simulate a live trading account, completely customizing everything from spread to equity and leverage settings.
You can download free historical data of the last 10 years for all the main currency pairs, choose from the vast selection of technical analysis tools and place your orders, watching your equity change as a result of your investing choices. But the best part of all is that, once you’ve placed your orders, you don’t need to wait hours or even days or weeks to see the results, as you are able to fast forward in time to any point in the “future”, including your next stop or limit order execution.
Needless to say, this is a unique and extremely valid tool to test your strategy manually, on real data and in a very realistic environment. You may think your strategy can’t fail, but there simply is no such thing in the world of currency trading: we’ve been looking for a program like this for a long time, and believe that a software like Forex Tester should be part of every trader’s arsenal.
Forex Tester Features
Let’s take a closer look. You can download the demo version of the software, which enables you to trade using the full suite of features for about 10 minutes before expiring. There are two “modes”, the edit mode, which lets you customize your account from leverage to equity and spreads for each pair, and the testing mode where you can effectively test your strategy by placing orders and see your equity raise or fall as a result of your actions.
As a first step, you will need enter the edit mode and generate the ticks for the pairs you wish to trade by clicking on File ยป Generate Ticks:
Once you select the pairs you wish to trade and the tick generating process is over, you are ready to go. Select the testing mode and start placing your orders, jumping forward in time to the point where you want to close your trade. You can advance one candlestick at a time, or fine tune the speed with a slider conveniently placed at the top of the screen.
In the testing mode, everything is like you would expect an actual live account to be, including a good selection of technical analysis tools to help you drive your decisions, a log of all your trades, pending and executed, and a highly customizable user interface.
Forex Tester Lite and Professional Version
The software comes in two flavours, lite and professional. While the latter is a little more expensive, it’s by far the most useful too, as it allows you to save and reload your account data from previous uses and even to program your own strategy to have it automatically tested, thanks to the powerful API that comes with the software.
In the support forum, the main developer will answer all your questions and provide you with updates and minor releases to further enhance your experience with this very valid piece of software.
Pros and Cons of Forex Tester
Pros:
- lets you trade on historical data, under very realistic market conditions;
- fully customizable, from leverage to a single pair’s spread;
- extremely useful tool to test your strategies safely without losing money;
- fast forward in time and avoid waiting days to see the outcome of your trades.
Cons:
- not free
