In this article, we discuss the best forex simulator software of 2019. You will find step-by-step instructions for choosing the best simulator software, how to use simulators for day trading, and also how to develop your forex strategy. can test.
By using simulators you can get rid of the bad habits and become a better trader. Simulated forex trading can be one of the most effective ways to trade risk-free. In this guide you will learn how to gain live market experience and discover the benefits of using a Forex simulation software.
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To determine if forex trading is best for you, you need to get involved in the markets and do your due diligence before putting any money into the game. With real-time historical data, you can reduce your learning curve and quickly determine if forex trading is best for you.
Simulated forex trading presents some problems. Positive results on a demo account can often turn into negative results in a live trading environment. This can make people question the validity of simulated trading.
However, the real cause of this difference is due to the lack of emotional involvement you get when real money is at stake.
Moving forward, you will learn what simulated forex trading is and how you can profit from sim trading.
See below:
What is simulated Forex trading?
A forex simulator is a piece of software that allows you to test your strategy in real time using the historical data of the markets. If you have new trading ideas, trading simulation software can help you test them. This allows you to find what works and what doesn’t, eliminating the loss of strategies.
While you may be working with a demo account, the market conditions resemble the live trading environment. You can open and close trades and change orders the same way you would in a live trading session.
The main benefits of using a free Forex trading simulator are as follows:
- Act as a live trading environment.
- The ability to test and backtest your trading strategy.
- Implement new trading ideas to see if they work.
- Risk-free account trading with all the features and trading functions of live trading.
Using a free forex trading simulator can help you learn the ropes of being successful in trading. If you apply the 10,000 hour rule of thumb to your trading, you definitely need a forex sim to practice your skills.
Before you start evaluating your current trading strategy, make sure you’re using the right setup.
In the next section, we’ll show you what to look for when comparing the key features of the best forex simulation software.
Best simulation for Forex trading
There are several important factors that every forex trading simulator should be equipped with. At a minimum, it is important that your simulator meets the following requirements:
1. Live prize feed
This is necessary to ensure that your simulator has a real market environment streaming live price data. Without live price data, you will miss the opportunity to effectively research your trading strategy.
A live price feed mimics the spreads. This means that when you run your strategy through a simulator, it uses the actual spreads found in the market.
This function is more important than anything else.
Having real-time pricing data will ensure that your backtested results are accurate. This helps you determine whether you can trust the simulated historical data found in the software.
This brings us to the next important feature that any sim trading software should have.
2. Historical data for Forex Trading Simulator
Second, you need to have accurate historical forex data that goes back several months. Not having enough historical price data to simulate the performance of your trading strategy will lead to unrealistic backtesting results.
The best online simulators will provide you with historical prices. It will also give you the ability to browse historical quote data for your currency pair. Apart from the quote date at the end of the day, the database should also contain quotes within the day. No matter your trading style, be it day trading or swing trading, the best simulator for forex can help.
The historical price data should be in a clear format where you get the high, low, open and close prices for the selected currency pair and the selected time frame. In some cases, you can also get the tick volume information. If your trading strategy is based on volume, it is essential to have access to the volume data.
Let’s move forward and see what other features your free forex simulator must have.
3. Flexible virtual money account
In our experience, traders do not see the importance of using a virtual account balance. It is recommended to start with a balance close to the amount you want to use in your live trading. If you can only fund your live trading account with $5,000, there is no point in using a $100,000 demo balance.
This has the potential to set unrealistic expectations that will lead to bad habits once you start live trading.
Simply put, make sure the virtual money account you use to test your trading strategy is the amount you will fund your trading account with. It will also allow you to implement a more realistic risk management strategy.
This way, you won’t have any problems when you switch to live trades.
When you start trading with a demo account, you don’t need to invest real money. Be sure to choose a free forex trading simulation with the minimum trading features and tools to get started.
Starting with the world’s most popular Forex trading platform, also MetaTrader4, can save you time in the long run.
Below is a step-by-step guide to using MT4 Strategy Tester.
Best Forex Trading Simulator – MT4 Strategy Tester
In this section you will learn how to test a strategy using the MT4 Strategy Tester. For this reason, we are going to use a standard strategy that can be found in the MT4 strategy library.
The first step is to open the Strategy Tester window by simply pressing CTRL + R or by clicking on the respective icon in the top toolbar.
See figure below:
Make sure you have selected the preferred window and the appropriate settings. For the purpose of this example, we have chosen the following settings:
- Expert Advisor = Moving Average.ex4 (the name of the strategy we backtest)
- Symbol = EUR / USD (the instrument on which we manage our strategy)
- Model = Each tick that is the most precise method
- Period = 1H (the preferred timeframe to execute our strategy)
- Spread = Stream
We recommend playing with these settings over and over again until you discover the winning settings.
When you are done with the settings, click on the Start button for the simulation to start. You can check the results of the retest strategy under the Report tab.
In the presented example, we can see that the standard moving average strategy produced a net loss of approximately -$400 during the tested period. This means that we are not yet ready to start trading.
We need to work more on our strategy and fine-tune the strategy parameters until you discover a profitable trading strategy that you can be comfortable with.
Conclusion – Forex Trading Simulator
The purpose of simulated Forex trading is to filter out bad trading strategies and to optimize your trades to get bigger profits from your trading system. The key to successful trading is to make the transition to live trading as soon as the simulation proves that you have an edge on the market.
Find a forex simulation that is popular with other traders and practice your trading strategy without the risk before you start trading in real time. Get the experience first, start trading live when you develop your strategy.
Sim trading is part of the process of becoming a profitable trader, and it is the perfect environment to learn the skills of Forex trading without losing money in the process. Also check out our zero to $1 million forex strategy.
Thank you for reading.
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