How to Use Forex Tester 3 Back Testing Guide

One of the best ways ANY traders can massively speed up their learning curve is by backtesting.

You can literally make a years worth of trades within a few hours.

 

What is Backtesting?

Back testing is the process of using old historical data to make trades and test a trading method or system.

When traders back test their trading strategy they normally use a form of software to do it on such as the Forex Tester 3 platform that then allows the trader to carry out a lot of different functions in quick time, with ease.

Whilst forward testing, or testing the method in real -time is still super and cannot be replaced, back testing can play a huge role in helping traders both practice their method and learn the type of trader they are.

 

Back testing can be a super powerful tool, especially for price action traders. Back Testing when done correctly, can help traders quickly build confidence in their method by being able to trade far more setups back to back than what they would be able to if they were watching the market in live time.

This allows the trader to not only perfect their trading, but also gives them a place to practice when the market is quiet and not producing trades, so rather than forcing trades they shouldn’t be in like so many traders do and costing their account, traders can take these moments and become even better traders with back testing.

 

 

Speed Up Your Learning Curve

Back testing can really quickly speed up and accelerate a traders learning curve. The simple reason for this is because traders are literally able to jump on the Forex Tester platform and go through a whole year’s worth of daily charts in only 1 -2 hours.

This can also play a huge role in the trader’s subconscious mind. As I discuss in the trading article Using Your Mind & Subconscious to be a Successful Trader whatever you feed your subconscious is what it will give you back in return. 

Your subconscious is where the majority of your thoughts, feeling and also habits are stored.

It is also where you store the memories of all your trades so that even if you don’t remember them in your conscious mind, they are being stored in your subconscious. This is why the more experience you can get, and the more chart time and more trades you play, the better.

The reason you get certain feelings is because you may not consciously remember a previous experience, but your subconscious can and the feelings are the subconscious’s way of often giving off a warning.

 

Perfect Your Method With Perfect Practice

Back testing is great for traders who need to get onto their charts and start practicing their trading and building their confidence in their method. These traders can get their trading journal and start testing, using the back testing platform to see where they are going wrong.

Often traders are making just a small mistake or the mistake may be far larger, but with the help of back testing, these traders will be able to back test their trading strategy and build confidence in their trading method before they go back to their demo or live accounts. Building confidence in their method is the key and traders can do this with repetition by taking the best trades over and over again.

Often times traders can fall into the trap when trading live markets of taking trades that when they look back on they wish they hadn’t and they only took them because at the time, the market was either slow or they just wanted to be in a trade.

With back testing this is not a factor because the market is always moving and traders can choose to either take the very best trades or quickly move on to the next very good trade. This way traders get a better reflection through back testing of what their trading method can actually do without them continually being tempted to take trades for the sake of being in a trade.

Build Confidence & Practice When Market is Quiet

One of the best advantages of back testing is that it allows traders to use it as a practice tool wherever they need.

This can be especially advantageous for those traders who know in themselves that they are prone to over trading and revenge trading. When these traders know that they are getting close to a situation that they may be about to either over-trade or revenge trade (which are two of the biggest account danger account drawn down periods), they should jump on Forex Tester 2 instead and start practicing.

Another great time for traders to back test and improve their trading instead of just staring into the computer screen and wasting time is when the market is slow and not producing the trades that traders would like.

When the market is slow, instead of looking at the screen and wishing for trades, flick the back testing gear on so that next time a trade comes around you will be an even better trader.

The summer months are coming up which tend to be a little quieter for the markets and this could be a prime time to do a bit of back testing if the market does move into some ranges or consolidation periods.

This can be a huge boost for a traders confidence level, when on other times it has been a drain to their account balance because they have traded when they shouldn’t have and probably lost a little bit of faith in what they are doing. This way not only does their account come out looking good, but they also come out a better trader!

 

Forex School Online Special Price

Loyal Forex School Online readers are able to buy the newly updated Forex Tester 3 and Forex Tester have created a special price where you will save $50 from the normal price.

To perfect your trading with the Forex Tester 3 with this special price, sign up here;

Forex Tester 3 Back Testing Software Special Price

 

Any questions just post them below in the comments.