Currency Trading Information Channel
5 Questions You Need To Have Answered Before You Back-Test Your Forex System
As 90-95% of new forex traders lose money within the first 3-6 months this article helps to guide new forex traders by asking 5 questions that the forex trader needs to know prior to back-testing their forex system.
Let us jump right in...
1. What data type are you using (or going to use)?
I know this sounds strange, especially if you have experience from another market such as stocks as their generally is only one type of data source available. However, in the forex market you can have up to 4 different data types: bid, ask, mid and indicative. Each have their own little nuances.
If you would like to know more about the data types then visit the article written about the perils of indicative prices. As this will save me from having to repeat the information again and boring those who've already read it.
So, if you know you have indicative prices then you know you're in for some good results! However, if you have any of the other three you need to be careful on how stop and limit orders are placed.
As an example: If we had bid price history and we were looking to place a buy entry stop at 0830 EST according to the day's high, then we know that the bid price will not accurately reflect what the actual price of our order should be. You would have noticed that if you placed a buy entry stop at the exact same price as that of the day's high you would have entered prematurely - you would have entered 4 or 5 pips before the high or the low of the day was touched (the exact same amount as the spread your broker offers!).
This leads me into the next most important question...
2. What spread is your broker offering on the currencies you are bask-testing?
You need to know this as this can help you set your slippage settings on each currency.
As our example in question 1 pointed out. We found that our buy at the day's high method did not exactly work because we bought at the BID PRICE high, not the ASK PRICE high - the price that we need when we place our order TO BUY.
Therefore, we enter in a slippage setting representing the spread that would be exhibited by this trade on this currency.
But knowing at what price to buy is only half the problem... how do we know what quantity to buy?
3. What margin does your broker offer?
If we know at what price to buy our currency at we need to inform our broker on what quantity to buy to fulfill the order. We only know what quantity to buy by the margin that the brokerage firm offers.
Most brokerage firms offer 100:1 leverage, however, some firms offer mini accounts with 200:1 leverage, others only 50:1 leverage.
Find out the margin required.
4. What restrictions does your broker impose?
Now, I don't just mean margin and spread restrictions as I have mentioned above. These are important in their own right, what you need to find out are the details.
This is probably the most important question of all as the fine line between success and failure can be found in the details. Now you can have this questioned by one of two ways: 1. You can find out through experience (generally the most expensive way unless done through the demo account!); or 2. You ask your broker (the cheapest and best way).
Why is this so important? I hear you ask. Well let's say you have a system that trades any gaps that might form on Sunday at 1700 EST, but your broker does not open until 1730 EST. You either need to factor this restriction in to your system, or move onto another system completely. Or, you may have a system that has 10 pip stops, but you find out that your broker will only let you place 15 pip stops from your initial entry price. Once again you will need to change your system to see whether it still performs well, or throw out your system (or change your broker)!
In fact one of the most devastating restrictions imposed by FXCM is that they do not accept stop entry orders if price never happens to trade at your entry stop price! FXCM will honor and "take the loss" of your OPEN stop positions, but if the liquidity is not there and price has shot straight through your stop price then you will miss out. This can have disastrous effects on your system results as you are left wondering on trades where you made good returns - "Would FXCM have got me in?". You may want to read of some of the quirks I use when placing entry stop orders on FXCM that could be of huge benefit to you to help you possibly get around this problem.
The restrictions by your broker are only half your systems' success, you also need to find out about another more important restriction... yourself. This leads me to the final point...
5. What restrictions do you have?
This is a vitally important question. Most people test their systems and fall in love with the results but find when they trade their system they have lost their account and that most of the best signals occurred while they were sound asleep!
As the forex market is a 24 hour market, you need to put into place restrictions in your system that will be realisticly conducted by you during the course of a normal trading day. There is no use operating a trailing stop method that changes your stop points during times when you are asleep and cannot possibly do so.
I hope this article has made you aware of some of the important things that need to be known prior to testing your system.
Article written by Ryan Sheehy from Currency Secrets.com. Where you will find reviews on forex data vendors, signal providers, brokers, and popular forex resources, along with more quality articles... all for f*ree!
MORE RESOURCES updated Mon. September / 16 / 2019
World FX Currency Trading Update: US Dollar Reversal? See It Market
The US Dollar Index reversed sharply when it found resistance Thursday at its regression trend channel. The Euro achieved its downside target and has ...
Forex Trading: Everything to Know About Foreign Exchange nairobiwire.com
Forex, also known as foreign exchange, FX or currency trading, has emerged as a viable venture for making money online for many Kenyans in recent years, ...
What Is Forex Trading And Why Is It Becoming So Popular? Novinite.com
Trading on the forex market has been slowly gaining popularity over the last 5 years.
What is forex trading and why it is going strong in 2019? Business MattersBusiness Matters
If you have a thing for money, business and trading, then you might have heard a lot about forex trading.
Oil-exporter currencies and safe havens gain after Saudi attacks CNBC
Currencies linked to the price of oil rose on Monday after an attack on Saudi Arabian refining facilities disrupted global oil supplies, while the Japanese yen and ...
Five tips for when you are struggling in FX trading ForexLive
When the going gets tough, the tough do these five things Tip#1 Deleverage The use of leverage is arguably the most important aspect of risk management and ...
Forex in Russia: 100 Steps Back Finance Magnates
The image of the forex market in Russia has been spoiled by the so-called boiler rooms, which are in no way related to the foreign exchange market.
Eagle FX Review: Forex Trading Platform Guide Blockonomi
Eagle FX is an online trading platform that hosts a number of popular asset classes such as cryptocurrencies, forex pairs, stock market indices, and commodities.
Interest rate in forex trading: why does it matter? Capital.com
Learn more about interest rates in forex. Find out how interest rates work and why they are so important for forex traders.
Germany's Scholz reportedly told banks that it would be a "bad idea" to pass on negative rates to savers - ForexLive
Germany's Scholz reportedly told banks that it would be a "bad idea" to pass on negative rates to savers ForexLive
Bild reports - Scholz opposes state guarantees to prevent negative rates for savers - Scholz says "we have enough instruments at the moment" ForexLive By ...
Pound to euro exchange rate: Brexit buildup boosts the pound ahead of an uncertain week Express
AFTER the pound soared to its highest levels against the euro since June, following positive Brexit developments, all eyes are on the government to determine ...
JP Morgan to launch electronic currency trading platform in Singapore The TRADE News
JP Morgan is set to launch an electronic FX trading and pricing engine in Singapore early next year, following in the footsteps of several other institutions that are ...
Forex trading: eight risks you should evaluate Business MattersBusiness Matters
The term forex market stands for the foreign exchange market where traders buy and sell currencies from all across the globe.
Rupee Plunges By 68 Paise To End At 71.60 Against Dollar: 10 Things To Know NDTV News
The rupee on Monday settled 68 paise lower at 71.60 against the US dollar. That marked first fall for the domestic currency in eight sessions. The local currency ...
RBC, TD Bank to pay C$24.5 million to settle forex trading charges: regulator Reuters Canada
Royal Bank of Canada and Toronto-Dominion Bank have agreed to pay a combined C$24.5 million ($18.5 million) to settle charges of foreign exchange trading ...
A peep into the world of foreign exchange Daily Nation
You may have heard about online trading in foreign exchange, also known as forex. You are also likely to have heard about how profitable this venture is.
European police arrest Dark Web counterfeit currency traders ZDNet
Over €1 million in fake notes has been seized across Europe.
Mugenda: How I landed into forex trading The Standard
Mr. Paul Mugenda, a forex trader based in Nairobi (PHOTO: Courtesy) The need to cope with the rising living standards has led many Kenyans into different ...
Former ION Trading chief appointed CEO of currency trading firm OANDA The TRADE News
Forex and currency trading firm OANDA has appointed industry veteran and the former chief executive of ION Trading Group as its new CEO. Gavin Bambury will ...
CFTC Charges Unregistered Forex Trading Firm And Its Principal With Fraud And Misappropriation - Exchange News Direct
CFTC Charges Unregistered Forex Trading Firm And Its Principal With Fraud And Misappropriation Exchange News Direct
The U.S. Commodity Futures Trading Commission has filed a civil enforcement action in the Southern District of New York against defendants Dominick Vincent ...
Travelex Japan opens currency exchange stores in Shin-Chitose Airport Japan Today
Travelex, the world's leading foreign exchange provider, has announced the opening of new "open concept" currency exchange stores at the Shin-Chitose ...
How to send money to Ireland Telegraph.co.uk
Do you want to send money to Ireland? Read a step-by-step guide to getting the best rates and *service* here.
Trading Support and Resistance DailyForex.com
Get our trading strategies with our monthly & weekly forecasts of currency pairs worth watching using support & resistance for the week of September 15, 2019.
Cautious investors push dollar lower on mixed trade signals CNBC
The dollar fell modestly against the Japanese yen on Tuesday, suggesting investors were skeptical of the optimism expressed by President Donald Trump on ...
Rupee vs dollar: Indian currency trading 22 paise higher on easing of US-China trade tensions - Business Today
Rupee vs dollar: Indian currency trading 22 paise higher on easing of US-China trade tensions Business Today
The rupee appreciated by 22 paise to 71.58 against the US dollar on Friday following positive developments in the US-China trade talks. Besides, firm trend in ...
BIS paper studies spread of global currency trading Central Banking
Authors examine “patterns of diffusion” to understand rise of the renminbi.
Crypto News From Asia: Sept. 9–15 Cointelegraph
From Cointelegraph Japan: This week's selected cryptocurrency and blockchain news.
China's monthly data eyed as aussie rides trade optimism – Forex News Preview XM
The world's second-largest economy will see the release of its industrial production, retail sales, and fixed asset investment data for August early on Monday.
Forex Forecast: Pairs in Focus DailyForex.com
Get the Forex Forecast using fundamentals, sentiment, and technical positions analyses for major pairs for the week of September 15, 2019 here.
Former HSBC forex chief Johnson loses appeal over US conviction Financial Times
Mark Johnson, HSBC's former chief currency dealer, lost his appeal against his conviction in the US for wire fraud over a foreign-exchange deal involving Cairn ...
Darb: Crypto and Fiat Currency Exchange with IEO Services newsBTC
Are you looking for an easy start in cryptocurrency trading? Maybe you are a step further and are looking for a place to promote your blockchain project?
RBC, TD seeking settlements over currency traders sharing private info BNNBloomberg.ca
TORONTO -- Canada's two largest banks are seeking to settle allegations that their currency traders used confidential information in chatrooms to gain potential ...
Japanese Yen Trading Higher In The Asian Session Action Forex
For the 24 hours to 23:00 GMT, the USD declined 0.05% against the JPY and closed at 108.12 on Friday. In the Asian session, at GMT0300, the pair is trading at ...
Register To Seminar - AUD/USD Trading Preparation for the Week Ahead DailyFX
DailyFX is the leading portal for forex trading news, charts, indicators and analysis. Every tool you need to trade in the foreign exchange market.
Weekly Forex Forecast for September 16 - 20, 2019 (EURUSD, GBPUSD, USDJPY, GBPCAD, Gold) - Daily Price Action
Weekly Forex Forecast for September 16 - 20, 2019 (EURUSD, GBPUSD, USDJPY, GBPCAD, Gold) Daily Price Action
Find out how Justin Bennett of Daily Price Action is trading EURUSD, GBPUSD, USDJPY, GBPCAD, and Gold this week! Watch the special video here.
Macro Trades: EUR/USD FXStreet
The European Common Currency traded sideways against the US Dollar, following the US Retail Sales data release on Friday at 12:30 GMT. The EUR/USD ...
Aussie Trading Lower, Ahead Of RBA Meeting Minutes Action Forex
For the 24 hours to 23:00 GMT, the AUD rose 0.26% against the USD and closed at 0.6881 on Friday. LME Copper prices rose 0.5% or $27.5/MT to $5870.0/MT.
CBK's warning over online forex traders Standard Digital
The Central Bank of Kenya (CBK) has warned members of the public against dealing with unlicensed and unregulated online foreign exchange dealers.
JPY: 5 Reasons Why The BoJ May Cut Rates & Change Framework Next Few Months -... Forex Crunch
The Bank of Japan convenes only 12 hours after the Fed and may introduce *fresh* stimulus of its own. What can we expect from the yen? Here is their view,
NZD/USD: Is a Price Action Reversal Imminent? DailyForex.com
After a strong rally which took the NZD/USD from its support zone through its 38.2, 50.0 and 61.8 Fibonacci Retracement Fan Resistance Levels, price action ...
Register To Seminar - Weekly Trading Forecast: EURUSD and Risk Focus on Fed and Trade Rumors - DailyFX
Register To Seminar - Weekly Trading Forecast: EURUSD and Risk Focus on Fed and Trade Rumors DailyFX
DailyFX is the leading portal for forex trading news, charts, indicators and analysis. Every tool you need to trade in the foreign exchange market.
EUR/USD falls to session low as sellers look to regain near-term control ForexLive
EUR/USD falls just under 1.1050 to test the 100-hour moving average ForexLive The "ECB bounce" is starting to fade already as sellers look to try and seize ...
Forex Trading for Beginners Yahoo Finance
Forex trading can be an exciting and lucrative activity, but it can also be tough, especially for beginners. Newcomers underestimate the important of financial ...
Forex Week in Review DailyForex.com
The markets all had a positive week, again. Sterling continues its mini rally, but investors are working more on hunches than information, from the fundamental.
Rupee recovers but trades lower at 71.53 per dollar Moneycontrol.com
The Indian currency has appreciated by 147 paise in the last seven trading sessions.
Technology hands start ups key to $5.1 trillion FX market Business Recorder
More than five years since global foreign exchange (FX) trading was tainted by a rigging scandal, a handful of banks are more dominant than ever and show no.
Currency Trading for Beginners Benzinga
If you're new to currency trading – look no further. FOREX.com is one of the world's largest forex brokers. Account holders get competitive pricing, award-winning ...
Fed Expected to Keep Risk Appetite Running After ECB, Trade Wars DailyFX
The fundamental pressure will not ease up over the coming week, but momentum behind a distinct trend is not guaranteed. Risk appetite has benefit an ...
Crude Oil Price Surge Flirts with Breaking 11-Year Chart Barrier DailyFX
Crude oil prices have challenged chart resistance capping gains since the 2008 global financial crisis having gapped higher after a drone strike on Saudi ...
Never lose hope in currency trading business Rocky Mountain Collegian
Sponsored *Content*: Never lose hope in currency trading business A good trader will know about the right kind of performance in the business. It is very.
Trade currency pairs: your guide to trade currency pairs Capital.com
Trade currency pairs CFDs, shares, commodities, cryptocurrencies and indices through Capital.com's award-winning platform. No commission. FCA and CySEC ...
Future Returns: The Risk and Reward of Foreign Currency Exchange Markets Barron's
While most advisors recommend leaving the foreign currency exchange market to the pros, individual investors are increasingly entering the market as ...
UPDATE 2-London forex trading turnover surges to record high Reuters
Britain's daily foreign exchange turnover rose to a record high in April, the Bank of England said on Tuesday, as investors concerned about central bank policy ...
Forex Trading Philippines Benzinga
If you live in the Philippines, trading in the forex market has its own set of rules. Learn how to trade, and the best forex brokers to use for 2019.
How to Start a Currency Trading Business Virtual-Strategy Magazine
Thinking on how to start a currency trading business? Then you are in the right place. Currency trading remains the largest financial market in the world.
Gold Price Rise May Struggle to Extend Before FOMC Rate Decision DailyFX
Gold price surge may struggle for follow-through, with markets turning their attention back to the upcoming FOMC rate decision even as the chart setup warns of ...
Is forex trading profitable? Capital.com
Want to learn how to make money on forex? Find out the major factors to consider and learn how to profit from forex trading.
Learn the Basics of Trading Currencies FX Empire
Learning the basics in currency trading is not complicated. Building your own strategy to make and making it work is a different story.
Apply "the secret" to forex trading success ForexLive
What's "the secret" behind successful traders? The Forex market is the largest trading network in the world with $1.8 trillion dollars being exchanged every day.
Forex trading – what are the best currencies to trade? Capital.com
In the world of currency trading, an essential fact is frequently overlooked, which is that foreign exchange rates are reference numbers, not expressions of ...
Venezuela loosens currency exchange controls to allow forex trading Reuters
CARACAS (Reuters) - Venezuela will allow local banks to open foreign currency trading platforms as part of a loosening of the OPEC nation's exchange controls ...
ForexLive Asia FX news wrap: Weekend attack on Saudi oil facility ForexLive
Forex news for Asia trading Monday 16 September 2019 Oil was the focus today with the attack on a Saudi Arabian production facility over the weekend. When I ...
Register To Seminar - FX Week Ahead: Strategy for Major Event Risk DailyFX
In this webinar, Senior Currency Strategist Christopher Vecchio will review key event risk in the week ahead and help strategize how to approach FX markets.
EUR/USD technical analysis: Mildly bid, but bull reversal remains... Forex Crunch
EUR/USD on Friday failed to confirm a bullish close above 1.1087. Key trendline hurdle is the new level to beat for the bulls. EUR/USD is currently.
VertoFX raises $2M for its African and EM currency trading platform TechCrunch
VertoFX, an Africa and emerging markets-focused currency trading and payment startup, has raised a $2.1 million seed round, led by Accelerated Digital ...
What you need to know about Forex trading The Standard
There are many benefits and advantages of trading forex. Nevertheless, key among them is that there is no waiting for the opening bell.
Retail forex trading set to go live today Economic Times
Mumbai: A new retail currency trading platform goes live today enabling thousands of small businesses to trade at market prices, possibly ending years of ...
Best platform for Forex trading Augusta Free Press
Forex or as most people know it, foreign exchange, is a decentralized world market where people can trade, buy or sell currencies.
A Guide to Trading Forex in Canada Benzinga
Looking to trade forex in Canada? Read our guide to learn about the rules, regulations, and the best brokers to use in 2019.
The Bank of Tanzania Studying Cryptocurrency and Online Forex Trading Impact in Tanzania - bitcoinke.io
The Bank of Tanzania Studying Cryptocurrency and Online Forex Trading Impact in Tanzania bitcoinke.io
A circular from the Central Bank of Tanzania shows that the bank is conducting a study to assess the extent of cryptocurrency impact on the Tanzanian economy.
Best Trading Platforms For Forex Trading In 2019 NuWire Investor
Thanks to a rapid rise in the number of trading platforms over recent years Forex still comfortably remains the world's most popular market. It has simply never ...
FX Trading - Currency Trading FXTM
Discover the details of foreign exchange, currency trading, currency pairs, forex market hours, forex trading fundamentals, trading signals and more. | FXTM ...
The Twilight Trading Hour Strikes Currency Markets Again The Wall Street Journal
There is a fragile spot in the $5.1 trillion currency market: early morning in Asia. This one- to two-hour period when U.S. traders are heading home—but market ...
Why Forex Trading is growing 7NEWS
It might come as a surprise that foreign exchange is not a 'relatively' new means of trading. Here are some reasons why retail forex trading is growing.
What Are The Benefits Of Forex Trading? ValueWalk
As already mentioned, Forex trading does not cost a lot of money if you are beginning, especially when compared to equity markets.
What is Forex Trading? Complete Beginner's Guide MoneyCheck
Forex is the art of buying or selling one currency for another - Find out more in our complete guide to Forex Trading for Beginners.
The currency-trading scandal continues to dog the banks The Economist
Banks are in the frame for Britain's latest collective-action claim.
A Detailed Look at Forex Trading Kalkine Media
In simple terms, forex trading, is the currency trading. It is one of the most liquid and traded financial markets in the world, with transaction volume exceeding $ 5 ...
How to Start Forex Trading in South Africa: A Complete Guide • Benzinga Benzinga
Learn more about how to start trading forex in South Africa, including what you'll need to start and the best forex brokers.
Forex Trading – What You Need to... Forex Crunch
Forex trading is popular with many people because you do not need to make a large investment to get started. However, while it's certainly possible to.
5 Reasons Why You Should Work With Forex Brokers When Trading NuWire Investor
A forex broker is an individual or a company that carries out a trader's orders in order for them to create profit in the market. In order to ensure success, one must ...
Bitcoin Forecast: Continuing to Drift DailyForex.com
Bitcoin markets tried to rally initially during the trading session on Friday as we continue to see a lot of confusion and sideways chop overall.
How to Trade Forex | Forex Trading Examples IG Bank
Follow six steps to easily start trading forex. See forex trading examples, learn how FX markets work and find out what you need to do to place your first trade.
8 Trading Strategies for a Low Volatility Forex Market Nasdaq
Are you frustrated by tight ranges and getting chopped up when currency rates do not move as much as expected? Are you frustrated by the lack of sustainable ...
Learning the basics of forex trading The Financial Express
You need to invest through a Sebi authorised broker to ensure that your forex trading actions are legal.
Forex trading: Understanding account types and differences ForexLive
Instaforex: See what different account options are available to FX traders There are a number of different account types available in the FX sphere and this article ...
Investor’s Manual: What Is Forex? The Ticker Tape
The foreign exchange market (forex) allows investors to trade two currencies against each other. Forex rates are what it costs to exchange one country's ...
Forex Trading: 5 Best Tips for Beginners - VENTS Magazine
A lot of new traders enter the currency market daily. Trading in Forex market is exciting, efficient and offers exceptionally high liquidity. Forex trading profits can ...
Forex Trading Tools Benzinga
FOREX.com is one of the world's largest forex brokers. Account holders get competitive pricing, award-winning customer *service*, actionable data and powerful ...
5 Tips for Investing in Currency | Investing 101 U.S. News & World Report
Currency can help balance a portfolio but investors must be careful.
Is Forex Trading Legal in Canada? Toshi Times
Before you venture into the Canadian forex market, understand the laws and the regulations. Note, the forex trading laws differ across the provinces in Canada.
How to be a forex expert ForexLive
What is the forex market Anyone who has ventured into the real marketplace would definitely have an idea what a Forex is and share the this horizon can bring.
How to Start a Career as a Forex Trader NuWire Investor
Making a consistent profit in the forex trading industry is extremely hard – something many newbie investors find out the hard way. Before you dive into a life of ...
Must Know Essentials about How to Do Forex Trading The Costa Rica News
Similar to any other business, forex trading has become a fast adaptable industry for both investors and entrepreneurs. Fortunately, not much is needed to.
How Does Forex Trading Work? FinSMEs
Forex trading is one of the most profitable money-making options — a successful trader can double their investment in 6 months.
Is Forex Trading a Scam? DailyForex.com
Where there is money involved, there are scammers. the potential rewards in trading are higher, but, some of the best traders in the world make 20% a year.
Tehran to tackle currency woes with new forex Al-Monitor
Iran plans to launch a new integrated foreign exchange market to tame hard-currency volatility, though that goal is far from assured.
Brokers brave China's FX market crackdown in hunt for household high rollers Reuters
SHANGHAI/SINGAPORE (Reuters) - Lured by hopes that China's retail investors could become major players in global currency markets, foreign brokers are ...
Forex traders fret as sleepy markets slow to calmest in years Reuters
LONDON (Reuters) - The $5.1-trillion-a-day foreign exchange market is suffering more than most from central bank decisions to move in tandem and keep ...
Forex trading platform for retail participants ready for roll-out on Aug 5: RBI BusinessLine
The Reserve Bank of India, on Thursday, said the electronic trading platform for buying/selling foreign exchange by retail customers of banks is ready for rollout ...