When you make the mistake in live trading there is no way to go back in time and to fix it. However, there is such an opportunity in backtesting. When you back test a trading strategy using a solid piece of software, you can easily stop the testing process at any point. You can return to any point as well and to “play your cards” in a different way.
3 cases when to use the “Correct mistakes” feature:
1. When you are not sure about your strategy and looking for the right set of parameters.
Traders often have hard time to discover which parameters of their trading strategies to use. Should you open the long trade when the Simple Moving Average with the 15, 20 or 30 period crosses the SMA (70)? Which period should you choose for your MACD and Stochastic oscillators? If you use an automated strategy, you are welcome to put to use the Strategy optimizer. But if you backtest manual trading strategies then you can either start several projects and then use the different parameters of the same instruments in them or do the following:
- test the required period;
- note down the results of the testing looking at the values of the automated statistics;
- return back to the very beginning of the testing;
- start all over again with different parameters;
- find which parameters fit your strategy the best.
2. When you made a technical mistake and wanted to get rid of it.
We are all human beings and can make technical mistakes during back testing a trading strategy. What if you had to open a sell order according to the rules of the strategy but somehow opened a buy one? Most of the Forex programs do not provide you with such a feature. Forex Tester in its turn allows you to go back at any amount of steps just clicking on the “Backspace” button.
3. When you are trying to develop your intuition on Forex.
No matter what all of those technical and fundamental analysts say, the gut feeling is one of the most important aspects of the trading. However, we need to distinguish the intuitive abilities of a novice trader and of an experienced one. Intuition has nothing to deal with magic – it is a simple outcome of the long-term investment into some knowledge or skill. When the person invest hundreds of hours into some particular activity (s)he naturally develops the feeling of what is going to happen or which step it is better to take in the nearest future.
Plenty of traders who has been using Forex Tester for several months make a statement that their ability to forecast the market has developed automatically. Somehow, they have learnt to understand what kind of pattern will appear in future even not using the analysis for this purpose. Certainly, they check their assumption with their technical tools but the initial estimation was made without any kind of thinking.
You can download the free trial version of the software using this link