Best Forex Backtesting Software Listed & Reviewed
- Thanks to backtesting, you can test your trading strategies
- Backtesting tests the strategies according to the previous movements in the market
- There are dozens of backtesting programs available in Forex trading
What is Forex Backtesting?
Forex backtesting is a process of testing a Forex trading strategy using the historical data of the market. There are different types of software created for Forex backtesting, which can help traders recreate the trades and see how their strategy would work in a certain situation
The data provided by the Forex backtesting software can be used by traders to measure the possible effects of a given strategy before actually using it. There is a general assumption made while using the backtesting software, which is based on the fact that the trades that have performed successfully in the past will perform the same way in the future as well.
The main idea behind Forex backtesting is that if a certain system would work in the past, it is capable of working just as well in the future. The best thing to do if you want to see if a certain strategy would be profitable is to test it on as much historical data as you can.
Testing over a very long period of time can be very helpful for traders as it can allow them to test the strategy in different types of market conditions.
To test a strategy and the way it would work according to the historical data, you will need to use backtesting software for Forex trading. When it comes to developing a trading style or system, backtesting plays a very important role. An amazing thing about it is that if implemented properly, it can be very helpful for traders and can help you optimize and improve your trading strategies.
In addition, these strategies can also be used to find any flaws that might be in your strategy, and see how helpful the strategy would be in different types of market conditions according to the historical data of the market.
Top 5 Best Forex Backtesting Software
In the modern Forex trading market, backtesting has become very easy thanks to the special programs created for it. In fact, there are numerous trading platforms that offer traders the ability to test different types of strategies on the historical data and tell if it would be useful in the future as well.
Some of the best-known Forex trading platforms in the market, such as MetaTrader 4 and MetaTrader 5 offer traders this capability. But, this is not all. In addition to MT4 and MT5, here are some of the best backtesting Forex trading software:
- Profit Finder
- Forex Tester
We are going to discuss the above-mentioned five Forex trading backtesting programs and see how they differ from one another.
Forex backtesting software MT4 is very popular among Forex traders around the world. The trading platform contains a Forex Simulator that gives traders the ability to rewind the time on the chart and replay the market on any historical date. Thanks to the Forex Simulator, you will be able to open orders, modify them, and close just like you would do in live trading conditions.
There are several things that make trading on historical data unique. First of all, unlike demo trading, it saves a lot of time. You can even set the time frames that you are comfortable with and focus on the important things only. In addition, there are numerous additional tools and indicators available on MetaTrader 4 which can be additional help.
Using Strategy Tester on MetaTrader 4 is very simple. All you have to do is to go to the ‘View’, look for the Strategy Tester option and open it. You can easily set the settings according to your needs and see the results in just a few clicks.
MetaTrader 4 is one of the best-known Forex trading platforms around the world which offers traders numerous capabilities. It was created back in 2005 by a Russian software company called MetaQuotes. Since then, it has become one of the most popular trading platforms around the world.
MetaTrader 4 has revolutionized the Forex trading market and made it more accessible for every trader globally. There are numerous trading indicators as well as tools that this trading platform offers to traders. Thanks to the available trading platforms at MetaTrader 4, Forex trading is becoming much easier for experienced as well as beginner traders.
While looking for the best backtesting software Forex trading, MetaTrader 4 should be considered without a doubt. The Trading Simulator of the platform is very well-developed and offers traders the ability to better understand how Forex trading strategies work and how they can be successfully used in Forex trading.
Another very popular Forex trading platform without a doubt is MetaTrader 5. Created by the same software company that developed MT4, MetaTrader 5 is among the most used Forex trading platforms around the world.
Offering traders several additional services, MetaTrader 5 is a modern Forex trading platform with a user-friendly interface. Much like MetaTrader 4, MetaTrader 5 also offers traders automated backtesting tools. The tools offered by the trading platform have proved to be successful and secure.
The built-in strategy tester of the MetaTrader 5 is very easy to use and facilitates the testing of the automated robot performance in the market. This tool is very frequently used in the market by millions of traders.
The whole operation of the MT5’s strategy tester is fully based on the historical price movements in numerous markets, such as Forex, Stocks, and many others.
There are several testing modes offered by the platform and you can set them according to your preferences. The platform also offers traders visual testing, which makes it possible for traders to track the operations on the historical data.
The testing mode of the MetaTrader 5 is very helpful for traders who want to do backtesting. In fact, it is considered to be among the top Forex backtesting software. There are several reasons for it. One of the major reasons for it is that it is very easy to use and does not require a lot of time.
Also, since MetaTrader 5 offers traders access to numerous assets, you can do backtesting on not only currency pairs, but on stocks, indices, and many other assets as well. MetaTrader 5 is already used by many traders, and the fact that it also offers backtesting capabilities makes it an even better trading platform.
As we have already noted, there are many programs that help traders with backtesting. One of them is the Profit Finder, which is the NinjaTrader backtesting software. It is available in numerous devices, you can also use this Forex backtesting software Mac version on Mac OS devices.
This Forex trading software is very popular among traders and is used to identify the profit and loss attributed to the strategy that you are using. There are different types of information that you will have to enter in the software, which includes account size, ideal entries and exits, trailing stops, take-profit levels, back-testing hours, profit targets, slippage, and many others.
The greatest thing about the Profit Finder is that it is capable of providing detailed information and insight about different types of assets. There also are many additional indicators available at NinjaTrader that you can use for a better outcome.
There are some key features that Profit Finder has. For example, it performs very complex calculations in just a few seconds, which makes it very useful for traders. The tool is also able to calculate the profit and loss levels of every position.
If you want to reduce the losses and get maximum turnover while trading Forex, it is very important to make use of backtesting and optimize your trading cBots. cBots are among the best Forex backtesting software and are used by traders around the world.
cBots are featured in a famous Forex trading platform, called cTrader. This trading platform is very well-known around the world because of the numerous and well-developed tools and indicators that it offers to traders.
To install cBots to your cTrader, there are several steps that you might have to take. First of all, you should go to the official website of the trading platform and download the cBot. After this, you simply double-click the downloaded file.
By following a few simple steps, all of the important and necessary files will be added automatically. Then, you can simply open your cTrader platform and add the cBots to your trading platform.
Thanks to the cTrader Automate advanced backtesting, you will be able to check the performance of cBots. You can set specific conditions that you see fit and set settings according to your needs. You can also do visual backtesting using cTrader, which is even more useful. This way, you will be able to see everything on the chart, which might help you to better understand the results.
We can’t talk about Forex trading backtesting software without mentioning Forex Tester. Among the many Forex products that can really impact your trading and success in the market is this piece of software.
It is among some of the most valuable and important products that can really make a difference. This is a very intuitive and easy-to-use software, which gives traders the ability to both automatically and manually simulating Forex trading.
Using the Forex Tester Forex manual backtesting software might be a little confusing but can help you better understand how the tester works. The information provided by the tester is very valuable and can be used by traders to better understand how the prices could move in the Forex trading market.
It works in a very simple way. It gives traders the ability to load historical data and see how a certain trading strategy would work in a certain situation. It can be a great help when it comes to practicing trading skills and can be a very important tool when it comes to testing new trading strategies. There are thousands of people using this Forex tester in over 184 countries around the world.
What Did We Learn From This Forex Backtesting Software Guide?
Backtesting software Forex is a type of program that allows traders to test potential trading strategies.
To test how the strategies can work in Forex, the backtesting software uses the historical data of the market.
There are numerous Forex trading backtesting programs available in the market. Most of the trading platforms offer their own version of backtesting software.
Using backtesting software can help traders better understand the Forex trading market and see how their strategy would work in different market conditions.
Among some of the most popular Forex backtesting programs are MT4, MT5, cBots, Profit Finder, Forex Tester, and so on.
Detailed Insight On Backtesting Software For Forex
How Do You Backtest A Forex Trading Strategy?
There are two ways you can backtest the market. The first one is automated backtesting, the second one is manual backtesting. By automated backtesting, everything is done automatically by special software. As for the manual backtesting, you will have to manually scroll the chart on your trading platform to a previous period and do everything on your own. Manual backtesting can be very time-consuming.
How Can I Get A Free Backtest?
There are many different types of free Forex backtesting software available in the market. These tools work in a very simple manner and all you have to do is to simply set the setting and you are good to go.
While there are several paid versions of the backtesting software, there also are numerous free versions.
How Do I Manually Backtest Forex?
When you are manually backtesting a trading strategy there are four steps you might have to take. When you are doing backtesting yourself, you will first have to open a chart and scroll the chart to a previous period.
While doing so, you should make sure that all the indicators that you are using for the strategy are applied to the chart. The second step is to move the chart bar by bar and spot possible setups in the trade.
After this, the third step is to write down the results of the imaginary trade that you have done. The fourth and final step is to repeat everything again until you find another possible setup, which you will write down again. This process can be very time-consuming yet rewarding.
What Is The Best Backtesting Software?
There are many backtesting programs available in the market and each of them is different from one another. The five best backtesting software are MT4, MT5, cBots, Profit Finder, Forex Tester.