Getting started with Forex Tester 2 can be a little confusing. Loading data and setting up your first test isn't too intuitive.
Once you figure it out however, it is really easy to do tests. Many of the Pro Traders that I have interviewed on the podcast say that backtesting is one of the biggest keys to their success and that Forex Tester is one of the best programs out there.
So take a minute to learn this process. It is one of the most highly leveraged skills that you can develop.
This video assumes that you have already purchased and installed Forex Tester 2 on your computer. If you would like to get a discount on the purchase of Forex Tester 2, use this link and you can get my special discount code.
The text version of this tutorial is provided after the video.
In this video, you will learn how to:
- Set the initial deposit in your backtesting.
- Load free historical data into Forex Tester 2, in 2 minutes flat!
- Add indicators to your charts.
- Change the spread, margin, lot size and swap rate of each pair.
- Test different currency pairs at the same time.
- See multiple timeframes at the same time.
- And more!
Download The Most Current Data
The first thing that you have to do is make sure that your initial deposit is similar to what you will actually be trading with. For example, if you plan to open an account with $5,000, then use that as your initial deposit. Testing with a $1,000,000 account can be fun, but it won't help you simulate real-life conditions.
Start by making sure that you are in History mode.
Go to Tools > Options in the main menu to setup the initial deposit. Then change the initial deposit to your target starting account balance.
Next, you have to download the latest market data. Make sure that you are still in History Mode, then select Data Center from the Tools menu.
Then make sure that the currency pair that you want to test is highlighted. We will use the EURUSD in this example. Be sure to check the date on the right side of the green bar (Imported 1 minute history). This tells you the most recent date that you currently have data for.
If the data is not recent, click on the Update from server button to update. Download the updated data for all the pairs you want to use in your testing. The pair that is highlighted will be the one that gets updated.
I have also changed the properties of the EURUSD for testing purposes, so I can emulate trading nano lots. If you want to do the same, use my settings in the Symbol properties section above. If you anticipate your spread being more than 3 pips, you need to change that too.
When you click on the Change properties button, you will see the following screen. Change the settings according to what you will be using in your actual trading.
Keep the default settings for everything else. Click on OK when you are done.
After you have updated the data, then click on the Generate button to prepare the data for testing. If you want to test two or more currency pairs at the same time, check those pairs here.
It will take a minute or two to generate the ticks, then you will be ready to start your test.
Once you have generated the ticks, click on the Exit button to close the Data Center window. Now switch to Testing Mode in the upper left corner. Then add a chart by clicking on the Open new chart button.
To add indicators, click on the List of indicators button.
That is how to setup your first backtest in Forex Tester 2. It is the software that myself and other traders recommend. There are other options out there however, so find the one that works best for you.
Be sure to also check out my totally free course that will take you step-by-step through the entire process of testing your first trading strategy. Backtesting can help you understand how a trading method would have performed in the past and can give you more confidence in your trading method.
Testing allows you to get learn without risking any money in the markets. If this interests you, I encourage you to get started right now.
Disclosure: Some of the links above are affiliate links in which I get a commission if you purchase through those links. However they don't cost you any additional money. In fact, the Forex Tester 2 links actually give you a nice discount off the regular price. Part of my commission goes towards supporting my charity partner.