In this article, we will cover the best forex simulator software for 2019. You will find step-by-step instructions on how to choose the best simulator software, how to use the simulator for day trading and how to test your forex trading strategy.
The simulator can help you break bad habits and become a better trader. Simulated forex trading can be one of the most efficient ways to conduct risk-free trading. Read this guide to learn how to get a live market experience and the benefits of using Forex trading simulator software.
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To decide if forex trading is for you or not, you should engage the market 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 decide if forex trading is right for you.
There are several problems with simulated forex trading. Often, positive results on a demo account can translate into negative results in a real trading environment. This can make people question the feasibility of mock trading.
However, the real cause of this discrepancy is the lack of emotional involvement when real money is at stake.
In the coming days, you will learn what simulated forex trading is and how you can reap the benefits of simulated trading.
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What is simulated forex trading?
A forex trading simulator is a piece of software that allows you to test offline strategies using historical data from the market. If you have a new trading idea, you can test it using our trading simulator software. This allows you to find out what works and what doesn’t and eliminate losing strategies.
While working with the demo account, the market conditions are similar to the real trading environment. You can open and close trades and modify orders the same way you would in a live trading session.
The main advantages of using the free forex trading simulator are:
- Work as a live trading environment.
- The ability to back-test and forward-test your trading strategy.
- Implement a new trading idea and see if it works.
- Trading risk-free accounts with all features and trading features of live trading.
With our free forex trading simulator you can learn the ropes to be successful in trading. If you apply the mastery rule of 10,000 hours to trading, you definitely need a forex simulation to practice your skills.
Before you start evaluating your current trading strategy, make sure you have the correct setup in place.
In the next section, we’ll show you what to look for when comparing key features of the best forex trading simulator software.
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Best forex trading simulator
There are several important elements that any forex trading simulation needs. At a minimum, it’s important that your simulator meets the following requirements:
1. live price feed
You need to make sure the simulator has a real market environment streaming real price data. Without real-time price data, you miss out on an opportunity to effectively review your trading strategy.
Real-time price feeds mimic spreads. This means that when you run your strategy through the simulator, you use real spreads found on the market.
This feature is more important than anything else.
Back-tested results are accurate when real-time price data is available. This allows you to determine if you can rely on simulated historical data found by the software.
This provides the next important feature that any simulation trading software should have.
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2. Forex trading simulator history
Second, you need accurate historical forex data from several months ago. Not having enough historical price data to simulate the performance of your trading strategy will lead to unrealistic backtest results.
The best online forex simulators offer historical prices. It also provides the ability to browse historical quote data for your preferred currency pair. The database should also contain daily quotes in addition to all-day quote data. No matter your trading style, whether day trading or swing trading, the best forex trading simulator can help.
Historical price data should be in a clear format where you get high, low, open and close prices for your chosen currency pair and your chosen time period. In some cases, you may also get tick volume information. In your case, your trading strategy is based on volume, and it is important to have access to volume data.
Let’s move forward and see what other features you need in a free forex trading simulator.
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3. Flexible virtual money account
In our experience, traders do not see the importance of using virtual account balances. We recommend starting with a balance close to the amount you intend to use for live trading. If you can only fund your live trading account with $5,000, you do not need to use your $100,000 demo balance.
This is likely to set unrealistic expectations that will lead to bad habits once you start trading live.
In short, make sure the virtual money account you use to backtest your trading strategy is the amount you will deposit into your trading account. It can also implement a more realistic risk management strategy.
There is no problem when switching to live trading in this way.
When you start trading with a demo account, you don’t need to invest real money. Choose a free forex trading simulator with minimal trading features and tools.
Starting with the world’s most popular forex trading platform, MetaTrader4, will save you time in the long run.
Here is a step-by-step guide to using the MT4 Strategy Tester.
Best Forex Trading Simulator – MT4 Strategy Tester
This section describes how to test your strategies using the MT4 Strategy Tester. For this reason, we will be using the basic strategies that can be found in the MT4 strategy library.
The first step is to open the strategy tester window by pressing CTRL + R or clicking on the corresponding icon in the top toolbar.
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Make sure you select the desired time zone and appropriate settings. For the purposes of this example, the following settings were selected:
- Expert Advisor = Moving Average.ex4 (the name of the backtested strategy)
- Symbol = EUR/USD (tool to execute strategy)
- Model = all ticks which method is most accurate
- Duration = 1H (preferred period to execute strategy)
- Spread = Current
I recommend playing these settings over and over again until you discover the winning one.
Once you have selected your settings, you can start the simulation by clicking on the Start button. You can check the results of your backtesting strategy in the Reports tab.
In the proposed example, you can see that the basic moving average trading strategy generated a net loss of around -$400 during the testing period. This means that you are not yet ready to jump into live trading.
We need to put more effort into our strategies and fine-tune the strategy parameters until you find a profitable trading strategy that you can live comfortably with.
Forex trading simulator
The goal of simulated forex trading is to weed out bad trading strategies and optimize your trades to get bigger returns from your trading system. The key to successful trading is to switch to real-time trading as soon as the simulation provides evidence of your market edge.
Find a forex trading simulator popular with other traders and practice risk-free trading strategies before you start trading live. Start trading live as you first gain experience and develop your strategy.
Sim trading is part of the process of becoming a profitable trader, and is the perfect environment to master your Forex trading skills without losing money in the process. Also check out our 0 to 1 Million Dollar Forex Strategies.
Thanks for reading.
