Featured Article:
February 6th, 2012
Currency Forex Trading System – How To Test Any Forex Trading Strategy By Using This Unique Method
By Peter Lim
With the popularity of forex trading since middle of year 2004 when it even overtook the interest in futures and commodities trading, we have seen a lot of forex trading systems being developed. As new technology evolved, we have also seen the power of the desktop computer being harnessed for running trading platforms involving all sorts of forex trading systems instead of using computer mainframes.
The usual way most traders would want to test their forex trading systems is to use a forex strategy builder and back test on historical data, and then to discover what parameters in that trading strategy are important to the results, and to forward test again on past historical data to check the results.
Some traders will merely back test historical data, and then run the system to test on simulated data. If they find that the system could generate good results based on the system parameters, they then adopt the system for actual use in real trading instead of a paper trade.
There is a lesser known way of testing a forex trading system, and that is to actually port the trading system to test it on actual historical individual stock data.
In other words, you can use the forex trading strategy to test it on historical stock data and to check how the system performed with stock market data.
Stocks and shares normally have less volatility then forex, the difference being trading stocks and shares would involve a study of accompanying volume. In contrast, we are concerned with price and time action in forex and not volume. Further. many forex traders are more familar with trading stocks and shares, and to use a forex trading system on stocks and shares would allow the trader who is transiting from trading stocks and shares to trading forex, an easier way to learn how to trade forex.
A general guideline for testing a forex trading system with individual stock data is this – if you find the forex trading system to perform well with an individual stock data, returning profits consistently, you can have reasonable confidence that the same forex trading system will function as well for trading forex itself. If the forex trading system does not perform well with stocks and shares, the general understanding is that the system may not be robust enough for the volatility and velocity of trades inherent with trading forex.
As always, this is not a dogma, but a general guideline. That is why any forex trading strategy or system have to be tested prior to being adopted for trading.
What is significant is that you can uncover the power of a forex trading stratgey to use on trading stocks and shares in this manner. Some forex trading strategies have been performing very well on stocks and shares, and it follows that these will also perform as well with forex.
Are you still struggling to become profitable trading forex? Discover how you can get help to personalise 3 powerful trading systems from a successful professional forex trader by visiting the author’s blog at http://1forex-trading.blogspot.com
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Currency Trading and Forex 100 Success Secrets: 100 Most Asked Questions on Becoming a Successful Currency Trader
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by Frank Brill
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\n Price Range: \n $22 |
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Trading for Profit! – Forex Trades (Foreign Exchange), Currency Trading, Options, Etrade – Learn to be a Top Online Trader (Make Money Trading, Trade, … Indexes, Commodities, Gold, Silver and FX)
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Getting Started in Currency Trading: Winning in Today\’s Forex Market
An accessible introduction to trading currencies
While the Foreign Exchange (Forex) market can be a very profitable place, you must have a firm understanding of how to operate within this environment if you intend on achieving any success.
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Currency Trading in the Forex and Futures Markets
Currency trading offers immense potential to stock and futures investors seeking new speculative opportunities. However, there are several ways to trade in currencies, and many unsuspecting traders have been burned by aggressive marketing campaigns and gimmicks luring them into unfavorable trading environments. In this book, best-selling trading author Carley Garner… |
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Getting Started in Currency Trading: Winning in Today\’s FOREX Market
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by Michael D. Archer
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