Testing your forex trading system

The easiest and most cost efficient way to validate your forex trading system is to perform back-tests. There are many free forex chart software tools that allow you to go back in time.

Use one of these charts to go back in time and start with identifying a trend and then confirming the trend (record "failures" and "successes" in your Trade Journal). Don't feel bad if you are wrong, it is an opportunity to improve your system without risking real money. Go on to validate the combination of technical/fundamental indicators, entry and exit points. Now calculate the net profit/loss you made.

Once you have one or more systems(don't take more than 2 as a beginner), practice a demo account in real time. After 2 to 3 months if you have a system that is robust enough to give you a profit move onto a live account.

Congratulations! You are Ready to Trade!

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