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.
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