I have been using Forex Tester for a long time. But to be perfectly honest, I have never used History Mode. Testing Mode has always been the best way to manually backtest trading systems, so I really never had a need for the other mode.
But I recently got curious and decided to give it a try. Come to find out, it does have some great uses. This post will show you how to get the most out of it and when to use it and when not to use it. If you prefer the text version, it is provided after the video.
How To Use History Mode
How To Get Started
The first thing that you want to do is make sure that your data in Forex Tester 2 is up to date. Go to Tools > Data Center.
Then select the pair you want to update the data for and click on the Update from server button. When Forex Tester is done updating, click on the Exit button.
Mark Your Setup On The Chart
Now go through the chart and mark whatever setup you are looking for on the chart. For example, let's say that you are looking for engulfing candle patterns on the weekly chart.
You would simply scroll through the chart and mark every engulfing pattern that you see. Be sure to go back and double check that you found all of your setups. I thought that I had all the setups, but it turns out that I missed quite a few.
After you are done, you can now take a step back and scroll through your charts. Observe what happens before and after every setup.
When you are using Testing Mode, there can be a tendency to get too focused on looking for the next setup. By using History Mode, you can see the bigger picture.
I also found this exercise very useful in getting a feel for how often the setup happens. One of my trading rules is to only take a maximum of two losses on any one trade idea or setup.
When I looked at the engulfing candles that I marked on the chart in History Mode, I didn't see any time where it would have been beneficial to violate that rule.
There are some trading methods that have a very small winning percentage, but win big, when they do win. It turned out that engulfing candles didn't seem to be one of these strategies.
So while Testing Mode is where Forex Tester 2 really shines, testing mode can be helpful too. I have found it particularly useful on the longer time frames because there is far less data. Marking off whatever setup you are looking for first, then scrolling through the charts can be a great way to look at the currency pair from another angle.
You could also do this on Metatrader. However, there may be less data available on Metatrader, depending on your broker. If your broker does provide a lot of data, then you don't have to use History Mode in Forex Tester.
Either way, give it a try and let me know what you think. Feel free to leave a comment below.
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