Do you feel like your broker and its demo account are just not cutting it for you? You want to test every strategy and every little step in your trading plan to a T, but the demo account is just not capable of that; Forex Tester is what you are looking for.
Forex Tester is a popular backtesting tool among traders that can help evaluate the efficiency of their trading strategies in various realistic market conditions and without any actual costs. It’s like a huge demo account that’s much better and more well-developed, according to many traders, at least.
But is Forex Tester worth the hype? Should you actually go out of your way to ditch the free demo accounts your forex broker offers and pay for the latest version of the tool, Forex Tester 6? Stick around to find out!
Brief History of Forex Tester
While this blog post mainly reviews Forex Tester 5 and its strengths and weaknesses, it’s necessary to learn a bit more about the history of the tool, how it started, and how it’s going to go in the future.
The first days of Forex Tester weren’t the brightest. Particularly, Forex Tester 1 and 2 were super basic tools that only allowed for the simplest of strategy backtests. The user interface wasn’t the best, and the graphics weren’t impressive either.
Forex Tester 3 was slightly better, with improved graphics and a slightly better interface. Still, it wasn’t good enough to scale, especially because more advanced traders couldn’t find any use for it.
As Forex Tester 4 was introduced, things started to look up. It featured a much better UI and really began to cater to the needs of more advanced traders. Custom indicators were introduced, and the data library was expanded. Still, it lacked automation.
Then came Forex Tester 5, which made it possible for traders to evaluate their automated trading strategies. The tool’s popularity skyrocketed with the introduction of AI into the Forex Tester system.
The latest version of Forex Tester, Forex Tester 6, was released in 2020. While it didn’t change anything that dramatically, it did try to improve everything, from user interface to indicators.
Despite the recent upgrades, our research shows that most traders still prefer to use Forex Tester 4. However, for traders who like to run automated trades, Forex Tester 5 and 6 seem like ideal options.
Key Features of Forex Tester
Forex Tester offers promising features to traders who just want to get started or those who have been in the market for a long time. Below, we will overview the top features of the most up-to-date version of this tool.
1- Historical Data Access
Forex Tester provides years’ worth of historical price data. Traders can test their strategies in various markets, such as forex pairs, commodities, and indices. One of the tool’s key features allows traders to simulate positions across multiple market conditions, such as trending, consolidation, and even financial crises.
Additionally, traders can use customizable timeframes, ranging from one-minute to monthly charts. This makes Forex Tester an excellent option for a variety of strategies, from scalping to swing trading.
2- Realistic Market Simulation
One of Forex Tester’s best features that can help you get authentic trading experiences is its ability to replicate real market conditions, such as price movements, candlestick patterns, spreads, and slippage.
Aside from preparing traders for real-world trading challenges, it also gives them the opportunity to backtest both manual and automated trading strategies.
3- Strategy Testing
As mentioned before, Forex Tester allows traders to backtest both manual and automated strategies. This means that you can participate in placing buy and sell orders, adjusting stop losses and take profits, and managing your risk.
At the same time, there’s room to integrate Expert Advisors (EAs) or other custom algorithms and AI trading tools to test automated systems.
Additionally, Forex Tester offers its users detailed reports post-stimulation. These reports include key metrics such as win rates, profit factors, maximum drawdown, and more. These analytics can help you really get a grip on your strategy’s performance.
4- Custom Indicators and Tools
Additionally, the software comes with popular technical indicators such as moving averages, RSI, MACD, Fibonacci retracements, and more. Also if you want more pizzazz, you can create and integrate custom indicators using the software’s development tools.
5- Multi-Currency Testing
If your trading strategy involves several currency pairs and trading them at the same time, or if you’re simply trying to learn the correlation between currency pairs better, then Forex Tester is a great option to try. With all sorts of currency pairs, from major USD pairs to more volatile exotic ones, Forex Tester users can simultaneously trade these assets and navigate through their strategies.
6- User-Friendly Interface
Forex Tester seems to have a super intuitive interface that mirrors big trading platforms, such as MetaTrader 5 and 4. The sense of familiarity that the software creates can minimize the learning curve and let the traders really submerge themselves in developing a proper trading plan instead.
7- Save and Resume Functionality
One of the best features of Forex Tester is the ability to save simulations and resume them at another desired time. Especially if you’re looking to overview super complex trading scenarios in depth or running a long-term testing session, this option can help you a lot.
Benefits of Forex Tester
Although most of the features we just went over kind of overviewed the beneficial aspects of using Forex Tester, we’d still like to draw your attention to a few things that make this backtesting tool even better.
- Risk-Free Learning Environment: Because Forex Tester is like a huge demo account with superb added functions, there’s no risk of losing your real money when trading there.
- Strategy Refinement: It’s worth stressing that Forex Tester allows its users to test their strategies in a wide variety of trading conditions, from ranging markets to trends and even news-driven volatility.
- Time Efficiency: This feature is probably the Editor’s pick, and for good reason. With Forex Tester, you won’t need to wait for hours, if not days and months, for the market to unfold and show you how your plan is working. Instead, you can just fast-forward through the time.
- Confidence Building: As more and more of your trades yield successful results, you can build your confidence in your trading strategy, which, in turn, helps you trade with discipline.
- Improved Decision Making: By replicating real-world scenarios, Forex Tester can help traders sharpen their decision-making skills, especially when it comes to errors in their strategies or their emotional decision-making patterns.
Drawbacks of Forex Tester
Of course, Forex Tester is not perfect either. Despite all the good features it offers, there might also be some disadvantages to it that you need to know about.
- Cost and Pricing: Despite its great features, Forex Tester’s free version is only a limited trial. For real accounts, traders will have to spend anywhere from $149 to $299. This number might seem like too big of an investment, especially if you’re a novice trader.
- Learning Curve: While Forex Tester is and has been trying to constantly improve its user interface and reduce learning curves, it still might not be enough. Especially for inexperienced traders who are not well-familiarized with backtesting software, the learning curve might be a bit dramatic.
- Limited Fundamental Analysis: Although some news-based information and data are available on the software, Forex Tester is heavily focused on technical analysis. So, if your trading strategy relies heavily on fundamental analysis, this tool might not be the ideal option.
- Lack of Real-Time Testing: Although years of previous price data are available on Forex Tester, real-time testing still remains an issue. Traders who need to test their strategies according to the current and upcoming market conditions should invest in additional resources.
How to Use Forex Tester?
So, after all that talk, if you’re thinking of getting started on Forex Tester, here’s a straightforward tutorial.
First, you need to download Forex Tester, choose a subscription plan, and install it on your computer. Then, upload the historical data of the market you’re interested in trading.
The next step would be to pick a trading model and start testing its effectiveness. Based on the performance of your strategy, Forex Tester will give you reports, which you need to evaluate carefully.
The last thing you wanna do is get deep and refine your strategy until it works how you want it to.
While the whole process seems simple, it takes time and dedication to get what you really want from your trading plan. Still, you can always look up trading tips and secrets or forex investment courses for self-improvement.
Wrap Up
Forex Tester is a popular backtesting tool that traders use to evaluate the performance of their trading strategies. It offers years of historical data to provide traders with a realistic trading experience.
Despite its many great features, Forex Tester can be a bit pricey. Additionally, it’s not well-suited for fundamental analysis or real-time trading. Queue the “super subtle” ad.
So, if you decide against getting your trading simulation from Forex Tester, we’d like to suggest demo accounts on ITBFX. They give you the real trading experience minus the risks and costs.
Forex Tester is a trading simulator that helps traders backtest strategies and techniques in real-world market conditions.
Traders who use Forex Tester can take advantage of its realistic simulations, time-efficient fast-forward option, and risk-free platform to refine their strategies, build confidence, and improve their decision-making skills.
The Forex Tester 5's price depends on the subscription plan the trader uses. For a basic subscription, it costs $149. However, if you get the pro plan, it'll be $19.99 a month or $299 a year.
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