subject: Bactesting a Forex Approach [print this page] Bactesting a Forex Approach Bactesting a Forex Approach
One of the the distinguished advantages about Foreign currency trading is that you can back test your plan. Strategy backtesting is a very straightforward process when the Metatrader 4 is used as your investing platform. The Metatrader4 is one of the top Forex trading platforms ever created and is readily obtainable from any Foreign currency broker.
Backtesting may be effortless but there are few rules you should follow. and the most significant of these rules is not to use data from a generic source. All statistics must be obtained from your broker server. Regrettably most people ignore this and head directly to the Metatrader history download center where all data is actually obtained from third party servers. The data from third party servers differ very much from the one you can willingly have from your own broker server, thus your bactesting results are not dependable and should not be considered in determining the triumph of your Forex line of attack.
Obtaining data from your broker server is truly very easy and readily presented. All you have to do is keep your chart on the M1 time frame, once you have this access to that the other time frames are a great deal easier to get when you briefly switch your chart to the other longer time frames. This is a fact as there is so much information in the M1 time frame. The instrument worth varies more than 30 times per minute and as there are so many minutes per day you can imagine the size of data needed to cover few months in the m1 time frame. Only a fifth of that amount of data is required on the M5 period and so on for the other longer periods. So once you have the data for the shortest time frame the others time frames are very simple to work out by your trading platform if not already loaded by brief switching to the longer periods on your Currency charts.
Besides having your Forex trading chart on the shortest time frame you should also scroll back your chart in the weekends as distant as you can. Forex brokers leave their servers on for you most of the weekend and during those times the Forex market is usually closed for trading and the servers are not overloaded. The weekends are the most excellent times in the week to scroll your charts back to obtain as much data as you possibly can openly from your broker server so you can backtest you Forex plan.
Another rule you should go behind is that you stick to most latest times. Forex market adjusts its behavior in haste and nothing that did the trick years ago would work in our day. so it creates no sense to get data for the ancient times. you should focus on the last few months only, in fact this makes things easier for you. Since it is nearly impossible to get precise reliable data for all time frames for ancient times. You should concentrate on receiving a full set of data for a particular Forex instrument for few months back without interruptions all the way to the calendar day in which you perform your back test.
The third and the last rule I would like to talk about that you should keep in mind when it comes to backtesting Forex in Metatrader is this: Do not try to take a short cut. A lot of people who are novel to Forex trading perform backtest of failing Expert advisors within minutes and get unbeaten results. Even if you use the most powerful workstation a back test on Metatrader 4 would take few hours to ample, and that even without using the visual mode in which you could see the trades and the price movements on the chart. The speed of the movement in a simulation is highly dependent on your CPU memory and processing strength. Metatrader Backtesting must always be done based on every tick of market data or your back test is nothing but deceptive. The more open trades overlap and a trailing stop is used the more is the processing needed by your CPU and thus the longer the time a back test would take. So why rush a good thing, Start your backtest properly and leave it to take its course while you are doing whatever thing you like to do, In the end of the test Metatrader 4 will hand you the full statement that can look at and study, so you can then adjust your choices and go for the next backtest, and so on and on. Eternally.
