Trading the forex market requires a great degree of flexibility and we, traders, must constantly adapt to changes fast. Sometimes that implies we use completely different trading strategies, although incorporating a new methodology in a daily regime comes with a series of disadvantages if we don’t follow a few crucial steps. It’s not enough to find a forex guru praising a certain strategy. You must conduct several tests and make sure you can rely on them.
Alt-text: testing forex strategies
# Use trading simulators
In the early stage, the new strategy must be tested without any risk involved. Trading simulators are great tools since they allow traders to practice and improve their forex trading skills without the risk of losing their hard-earned money. A benefit of simulators is that the market does not have to be open and you can test the new strategy even during the weekend.
The software is a trading platform with a database full of price quotes dating back to several decades, in some cases. You can set the speed for the charts to unfold and test the strategy at your own pace. There are plenty of solutions, both free and subscriptions based on simulated trading. No matter what software solution you choose, it’s a great way to enhance your trading skills and improve your accuracy, without having to put money at risk.
# Undo losing trades with dealCancellation from easyMarkets
The final stage is to start implementing the strategy on your live trading daily routine. For traders who want to be conservative, dealCancellation is an easyMarkets feature that allows them to undo losing trades for 1,3 or 6 hours, for a small fee. This feature is appropriate for traders who want to try different instruments, markets, and various forms of analysis. Considering sometimes depending on the market conditions may require some adjustments, using this tool could be used to reduce losses. If you want to learn more about dealCancellation, feel free to visit the easyMarkets official website.
# Test on a demo account
After at least a few weeks of simulating the strategy, the next step takes us to a demo account. If you are already accustomed to trading live, going back to the demo may seem boring, but it’s crucial not to skip this test. You can handle this task while trading live in parallel, without creating any major changes to your trading regime.
Although demo conditions are not 100% the same as trading on a live account, you will manage to find trading opportunities using the new strategy as prices unfold in real-time. It may be a virtual account, but you should treat it as a live one because this is the last risk-free trading before the strategy will be applied with real money.
Implementing a new trading strategy isn’t exactly the most exciting thing, given it requires traders to follow a series of steps, as we’ve discussed here. However, we live an uncertain period and our ability to adapt to different circumstances will determine how profitable we will be in the months and years ahead.Get the 5 most predictable currency pairs