subject: The Ins And Outs Of Bactesting A Trade Stratagem [print this page] One of the the great advantages about Forex trading is that you can back test your plan. Strategy backtesting is a very straightforward procedure when the Metatrader 4 is used as your trading platform. The Metatrader4 is one of the top Forex trading platforms ever shaped and is readily available from any Foreign currency broker.
Backtesting may be easy but there are few rules you should follow. and the most vital of these rules is not to use data from a generic supply. All statistics must be obtained from your broker server. Unfortunately most people ignore this and head directly to the Metatrader history download center where all data is essentially provided from third party servers. The data from third party servers differ greatly from the one you can willingly have from your own broker server, thus your bactesting results are not reliable and should not be considered in determining the triumph of your Forex plan.
Getting data from your broker server is truly very easy and readily presented. All you have to do is maintain your chart on the M1 time frame, once you have this access to that the other time frames are much easier to get when you for a short time switch your chart to the other longer time frames. This is a fact since there is so much information in the M1 time frame. The currency worth varies more than 30 times per minute and as there are so many minutes per day you can visualize the size of data required to cover few months in the m1 time frame. Only a fifth of that amount of data is needed 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 Forex charts.
Besides having your Fx 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 strategy.
Another rule you should follow is that you fuse to most recent times. Forex market adjusts its behavior quickly and not anything that did the trick years ago would work in our day. so it makes 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 dependable data for all time frames for ancient times. You should concentrate on receiving a full set of data for a particular Forex currency for few months back without interruptions all the way to the day in which you carry out your back test.
The third and the closing rule I would like to mention 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 outcome. Even if you use the most powerful workstation a back test on Metatrader 4 would take few hours to complete, and that even without using the visual fashion 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 computer memory and processing strength. Metatrader Backtesting must always be done centred on every tick of market data or your back test is nothing but false. 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 correctly 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 analyze, so you can then modify your choices and go for the next backtest, and so on and on. Without end.
by: joshjx7dpe
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