May 1st, 10
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When you have found several fx trading systems that fit your factors, the following step is back testing. This implies going over past price charts and recording all the trading opportunities which arose in the past for your system. It’s a brilliant idea to test back for a minimum of one complete year because there are certain market conditions that tend to arise at set times of year.
If a system does not produce good profits in back tests, it is probably not worth chasing further. Most systems do better in back tests than in the live market, even in demo mode. This is as analyzing past charts gives you the perfect situation to make the most of every trade. However, it gives you a much better notion of the way the system will perform for you, so don’t skip over this step. In real life you will regularly not open a trade at the moment the signal is right.
Testing could be a slow process but it’s critical to be patient. Going live on a system that you are undecided of will lead on to losses. Careful selection and testing of fx trading systems is vital if you would like to succeed as a currency exchange trader.
Apr 30th, 10
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When you have found one or two fx trading systems that fit your criteria, the next step is back testing. This implies going over past price charts and recording all the trading opportunities that arose during the past for your system. It is a good idea to check back for a minimum of one complete year since there are certain market conditions that tend to arise at certain times of year. If a system doesn’t produce good profits in back tests, it is not worth following further. Most systems do better in back tests than in the live market, even in demo mode. This is because analyzing past charts gives you the ideal situation to make the best of each trade.
Demo testing is slower because you have got to wait for trading opportunities to appear. Nevertheless it gives you a better notion of how the system will perform for you, so do not skip over this step. Going live on a system you’re undecided of will lead on to losses. Careful selection and testing of currency trading systems is important if you would like to succeed as a foreign exchange trader.
Apr 30th, 10
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Beginning with a micro account does not mean that you can skip over the demo stage. It is important to start to know both of your system and your broker’s platform in demo mode before going live. To get the most from a micro currency exchange account it is important to have a system that doesn’t involve enormous risks. Usually you will be using high leverage on the account or trading more than one lot, so you maximize the amount you can make from winning trades.
Therefore you want a system that only makes little losses. This will wipe out a trader using maximum leverage in a micro account. Instead, look for a system with more stable results. Naturally, no forex system is completely foreseeable, but statistically a tiny account balance will have a better chance of surviving that way.
When you are making steady profits with a micro account you can steadily add more funds to your balance and increase the amount of lots that you commit in each trade, till eventually you are prepared to move to a mini foreign exchange lot size which is ten times larger.