Forex Tester 2 Tip: How to View the Equity Graph

This is a great feature in Forex Tester 2 that you may not have known about.  I only just started using it recently and it allows me to see where my system stops working and how volatile it is.  These are two metrics that are not immediately evident when looking at the final testing results.

This is how you open the Equity or Profit Graph from the Forex Tester 2 menu.  Keep in mind that you need to already have some testing results to graph to begin with.  So do some backtesting before you open the Profit Chart.

If you have testing results, it will look like this:

As you can see, this graph goes from January 2001 to May 2010.  It started with $1,000 and ended with less than $850, not a good system!  In addition, we can see that the system is fairly volatile, which is not really a good thing either.

In this case, we can obviously see from the total loss that it is not a good system.  However, if you had two profitable systems with similar ending winning percentages, but different Profit Graphs, then we may want to use the settings that create a smoother graph.