Forex Tester has been around since 2006 and is one of the most widely used manual Forex backtesting software solutions available.

But if you're looking for alternatives, this article will give ALL of the other solutions that I have discovered since starting this site in 2007.

I'll show you where each software package is better that Forex Tester and where it's not as good.

Some solutions are paid and others are free.

But remember, you usually get what you pay for.

Alright, let's get into it…

Forex Tester

Before getting into all of the alternatives, I'll first show you where Forex Tester shines and where it has some shortcomings.

I've been using Forex Tester since about 2008 and it's a solid piece of software, but there is some room for improvement.

But first the good stuff…

Benefits of Forex Tester

• Wide range of markets available to backtest
• Paid product, ensuring product updates and support
• Easy to use
• Excellent support
• Can backtest MetaTrader EAs
• Free trial
• Advanced trade and order management
• Very stable
• Add custom indicators

Downsides of Forex Tester

• Very limited analytics
• No partial automation tools
• Updated historical data requires a monthly fee
• Requires Windows
• Their paid EA builder doesn't work
• Not all custom indicators can be converted to Forex Tester format
• Hard to program custom indicators yourself

Who This is Good For

If you don't need detailed analytics, then this is a good solution.

Traders who use custom indicators can also benefit from using this software.

Like I mentioned earlier, I have used Forex Tester for along time and it's a solid software package.

However, if you want a full-fledged backtesting solution, then I feel that Forex Tester has room for improvement.

If you like this software and want to get a big discount on the newest version of Forex Tester, then go here to learn more.

But if you still want to hear about the alternatives, let's take a look at all of them and see how they compare.

I'll start with the software that has replaced Forex Tester on my computer…

NakedMarkets (Best Forex Tester Alternative)

This is my pick for best Forex Tester alternative.

NakedMarkets was just launched a couple of years ago, and I feel that it has already surpassed the capabilities of Forex Tester, by a wide margin.

I currently only use this software for backtesting.

Here's why…

Benefits of NakedMarkets

• Professional level backtesting analytics
• Manual, semi-automated and fully automated backtesting
• Built-in no-code trading system builder that works well
• Easy to use
• Free updated historical data
• Paid product, ensuring product updates and support
• Get historical data downloads from multiple brokers
• Historical data for many futures, forex, indexes, crypto and stock markets
• Working on support for custom MetaTrader EAs and indicators
• Advanced trade and order management
• Free trial
• Create your own indicators with popular programming languages
• And more!

Downsides of NakedMarkets

• Only runs on Windows desktop
• They have a small team, so support can be a little slow

How It Compares to Forex Tester / Who It's Good For

This software is excellent for anyone who wants to speed up the backtesting process with partial or full automation, but does not want to code.

The Rules feature of NakedMarkets allows traders to build automated pieces of a trading strategy, and potentially make it a fully automated strategy in the future.

Another reason to use NakedMarkets is because of their professional level analytics.

Unfortunately, Forex Tester's analytics has not improved over the years and this feature alone is worth the slightly higher price of NakedMarkets.

I recommend it to anyone who is thinking of getting Forex Tester.

NakedMarkets is superior to Forex Tester. 

Learn more about NakedMarkets here

MetaTrader 4 and 5

MT4 and MT5 are very similar when it comes to backtesting, so I'm going to group them together.

Since so many brokers have MetaTrader available as a trading platform, using one of these platforms for backtesting is an excellent way to get accustomed to the platform so you know how to use when it comes time to trade live.

Benefits of MT 4 and 5

• Free to use and free historical data
• Get to know the trading software while backtesting
• Can be used offline if the data is already downloaded
• Can use the numerous custom indicators already created for MetaTrader

Downsides of MT 4 and 5

• Need to use a spreadsheet to track backtesting trades
• A very slow backtesting method
• Can be confusing to scroll back to old dates
• Only available on Windows (not reliable on Linux/Mac), mobile versions not good for backtesting

How It Compares to Forex Tester / Who It's Good For

This is fantastic for people on a budget, or if you just want to try out backtesting without investing any money.

The big disadvantage is that the process is going to be really slow.

But on the bright side, anyone can do this because it doesn't require any complicated setups.

Of all the free options on this page, I would suggest starting with this one.

It's a good free option to Forex Tester. 

Download MT4 or MT5 to get started right now.

TradingView

TradingView is my absolute favorite trading and charting software.

It's so easy to use and it runs on any device, which is a huge advantage.

But is TradingView a good Forex Tester alternative?

Let's find out…

Benefits of TradingView

• Runs on any operating system, including mobile
• Super smooth charts, easy to use
• Use the Replay feature to simulate live market conditions
• Paid product, ensuring product updates and support
• Can use the numerous custom indicators already created for TradingView
• Free trial

Downsides of TradingView

• Not enough historical data to backtest on lower timeframes
• Ongoing subscription fee
• Very limited analytics
• Cannot do complex entries and exits
• Have to be online to use it

How It Compares to Forex Tester / Who It's Good For

TradingView is good for traders who want to backtest fully automated trading strategies or manual strategies on higher timeframes (daily chart or higher).

If you want to do backtesting on lower timeframes, this is not the platform for you.

They do not have enough historical data or analytics to make it worth the monthly cost. Hopefully that changes in the future, but for now, this is not a great backtesting platform.

Learn more about TradingView here.

Soft4FX

This is a relatively unique solution in the market because it's a plugin for MetaTrader 4.

So instead of building an entirely new software, the creators just piggybacked off an already popular software.

Here's the good and bad of this software.

Benefits of Soft4FX

• Paid product, ensuring product updates and support
• Low cost
• Leverages existing popular MetaTrader 4 platform
• 3 Historical broker data options
• Advanced trade and order management
• Free trial
• Use with 2 MetaTrader 4 accounts

Downsides of Soft4FX

• Very limited analytics
• A little clunky, not the easiest to use software
• Requires Windows and the desktop version of MT4

How It Compares to Forex Tester / Who It's Good For

This is a solid solution for someone who is just getting started in trading and wants a decent, low cost, backtesting software solution.

However, if you are serious about learning how to trade, I would highly recommend spending a little more money and purchase the best Forex Tester alternative listed above.

After I used Soft4FX for a few days, I found that I wanted something with more capabilities.

You might find the same.

Learn more about Soft4FX here.

Traders Gym (ThinkTrader)

Traders Gym is a free backtesting solution inside the ThinkTrader platform from ThinkMarkets.

It has some basic backtesting features that will get you up and running with a backtest quickly.

One thing to keep in mind is that ThinkMarkets is a broker, so they will try to get you to sign up for a live trading account, unlike Forex Tester.

But here's the good and bad when it comes to this software.

Benefits of Traders Gym

• Free software and historical data
• Good looking interface

Downsides of Traders Gym

• You have to be connected to the internet to use it
• They don't offer much historical data
• Regular pausing because of internet connection during backtesting
• Missing some key backtesting features
• It's not easy to use
• Cannot add custom indicators
• Manual backtesting only

How It Compares to Forex Tester / Who It's Good For

The most annoying part of this software is that you have to be online to use it.

On top of that, it pauses occasionally because it loses the internet connection for some reason, even if I have a solid connection.

I don't understand why they made it run this way, since this is a standalone software that's capable of storing historical data.

Now this could be a good free alternative to Forex Tester if you're a day trader that uses pure price action to trade.

But that's about all it's good for.

Learn more about Traders Gym here.

NinjaTrader

NinjaTrader was started in 2003, making it one of the oldest platforms on this list.

There's no doubt that it's a solid trading platform. But how is it for backtesting?

Here's what I discovered after trying it out.

Benefits of NinjaTrader

• Free software and historical data
• Good support
• Well established platform

Downsides of NinjaTrader

• Really clunky software, feels like it was built in the 1990s.
• Hard to get it to work
• Primarily for Futures trading

How It Compares to Forex Tester / Who It's Good For

I know a couple of professional traders who have been very successful using NinjaTrader as their backtesting software.

But I don't like it.

First of all, it's primarily for Futures traders. So if you trade any other market, it's not going to work as well.

Second, it takes forever to learn how to use it and it's very frustrating.

On the upside, it's free, so that's one benefit that it has over Forex Tester.

But all in all, I would steer clear from this software if you trade Forex. 

Learn more about NinjaTrader here.

FXBlue Trading Simulator

This is another free trading simulator that's downloadable from FXBlue.

Like Soft4FX, it's also a plugin for MetaTrader 4 and leverages the functions of an established platform.

Here's the good and bad about this software.

Benefits of FXBlue

• Free historical data
• Plugs into MetaTrader 4
• Better than using a spreadsheet

Downsides of FXBlue

• Clunky to use
• Not many features
• Very limited support
• Windows only

How It Compares to Forex Tester / Who It's Good For

FXBlue is a free way to see if you would be OK with a solution like Soft4FX, or if you would be better off with a solution like NakedMarkets.

It's good enough to get a feel for how to backtest, but I don't see it as much more than that.

This is not a good replacement for Forex Tester.

Learn more about FXBlue here.

Conclusion

So if you're looking for an alternative to Forex Tester, then those are your best options.

If you're on a tight budget, then the free or cheap options like MetaTrader or Soft4FX are a great place to start.

But if you have some money to invest in your trading business, I would highly recommend using the best option you can afford.

To learn how to backtest properly once you have one of these solutions, take my backtesting course.

The post 7 Best Forex Tester Alternatives appeared first on Trading Heroes.

A great feature in Forex Tester 5 is the ability to install custom indicators.

This allows you to use the trade journaling and analysis tools in Forex Tester, while using the same indicators that you would use in live trading with MetaTrader.

It really speeds up the backtesting process.

If you use MetaTrader as manual backtesting software on its own, it's works, but it's cumbersome and slow.

But there are some limitations to importing indicators into Forex Tester.

So in this tutorial, I'll show you how to add custom MT4 indicators to Forex Tester 5, and show you why it might not be as useful as you think.

If you prefer the text version of this tutorial, it's provided below the video.

How to Add a New Indicator in Forex Tester 5

To add an indicator to Forex Tester 5, make sure that you're on the Home tab in the upper left corner of the screen, then click on List of Indicators, then Install New Indicator.

From there, a small window will pop up that will allow you to install the indicator.

Click on the button with the 3 dots to select the file you want to install.

There are 2 types of indicator files that you can add to FT5.

• .dll
• .mq4

A .dll file is the default file type for Forex Tester indicators.

The issue with this file type is that there aren't many indicators available on the internet and it isn't easy to find a programmer that knows how to create Forex Tester .dll indicators.

We do have a couple of indicators available, but we haven't had a lot of requests for new ones.

The more practical file type is the .mq4 file.

This is the file that MetaTrader 4 uses.

But before you get all excited about being able to import MetaTrader 4 indicators into Forex Tester, there are a couple of catches:

1. You can only import .mq4 files, not .ex4 files
2. The import will only work if the Forex Tester server can do the conversion

Most custom indicators sold on the internet will be delivered in .ex4 format. This is because the vendor isn't going to give away the source code or the “recipe” of how the indicator works.

Unfortunately, you cannot import .ex4 indicators into Forex Tester 5.

However, if you do have the .mq4 file, then you can move forward.

Once you select the file you want to import, click the Install button.

After you select the MT4 indicator file that you want to install, the software will ask you to verify that you're OK with sending the file to the Forex Tester servers.

In order to convert the .mq4 file to .dll format, the program on the server will have to do the conversion, then send the .dll file back to you.

Once the conversion is done, you'll get a message that the indicator is installed.

That's it!

If you want to buy Forex Tester 5 so you can backtest with MetaTrader 4 indicators, then be sure to get the big discount.

Benefits of Importing MT4 Indicators

The biggest benefit of being able to import MT4 indicators is the ability to backtest your trading strategies with the same indicators that you'll use in live trading.

Converting an indicator is free and very easy to do with the Forex Tester automated conversion service. You don't have to pay a programmer extra to convert the indicator for you.

In addition, you can get tons of free indicators that you can import into Forex Tester in the MT4 Code Base.

Downsides of Importing MT4 Indicators

I haven't used this function a lot because I'm not into custom indicators, but I have noticed that the Forex Tester conversion tool isn't able to convert all of the indicators that I've uploaded.

In fact, the success rate seemed to be pretty low. It generally works for simple indicators, but it has difficulty converting more complex ones.

Now in all fairness, converting code between 2 different programming languages isn't easy, especially for an automated program.

But just be aware that the conversion process may not work for all indicators.

What About Decompiling .ex4 Files?

Some people are under the impression that you can “decompile” a .ex4 file to get the .mq4 file.

In all my years of trading, I've never seen anyone do it.

At one point I looked into it for a couple of days. A lot of people thought it could be done, but I never saw any evidence.

So I wouldn't waste my time trying to figure out how to decompile a .ex4 file.

If you can't find the .mq4 file, just move on.

Final Thoughts

So that's it!

The process is very simple and powerful, but the method does have its limitations.

Hopefully they will expand the functionality of the indicator import so it will be more reliable and possibly include MT5 custom indicators too.

Alright, now get to backtesting!

Forex Tester is a great piece of software, but I recently found this backtesting software that I like better.

The post How to Install Custom MT4 Indicators in Forex Tester 5 appeared first on Trading Heroes.

There are some trading programs that only run on Windows. However, Windows has so many issues that refuse to use it as my daily operating system.

Therefore, I've experimented with many different ways to run Windows on a Mac and I'm going to share the best method with you here.

The best way to run Windows on a Mac is to purchase a dedicated mini Windows PC or tablet, then use Remote Desktop on a Mac to access the Windows PC. This method completely eliminates compatibility issues and doubles your processing power. 

But there are a lot of questions that come up when it comes to setting this up.

So in this tutorial, I'll give you the simple 2-step process to setting up your own dedicated Windows trading computer.

Step 1: Purchase and Set Up a Dedicated Windows PC

The first step is to purchase a small Windows PC. Just purchase something that you can afford and has the most recent version of Windows.

You don't need to have the most powerful computer in the world.

Any computer built in the last 3 years will work great.

The only time that you would need a top of the line computer is if you're going to run complex automated trading algorithms.

If you want more details on the specs to look for in a new trading computer, read this tutorial.

But if you simply want to run MetaTrader or Forex Tester, then any decent desktop computer will do. You can get a good used one for around $100 to $200.

If cost isn't an issue for you, then buy the best you can find.

The minimalist in me prefers to have a computer that takes up as little space as possible, so I can tuck it away in a corner somewhere or hide it behind my monitor.

These small computers also use less electricity than full-sized computers.

I would suggest getting either a small form factor (SFF) computer or a tablet that runs desktop Windows.

SFF Computers

A SFF computer usually measures about 9 inches squared and 2 inches high.

The best part about these computers is that they have a lot of processing power, especially if you buy a computer that was made within the last 3 years.

So you'll never have to worry about the speed of the computer because most trading programs are pretty lightweight and don't require a powerful processor. Just make sure that you have at least 8GB of memory.

You can also purchase older computers that can work just as well for your needs.

I would currently suggest looking at 2 lines of computers:

• HP Elitedesk / Prodesk
•  Lenovo ThinkCentre

The best SFF Windows computers will change over time, so do your own research and find something that fits your budget and needs.

You can find good deals on eBay, so keep an eye on the listings there.

If this isn't going to be your primary computer, a used computer will do a fantastic job, without having to pay full price.

Tablet Computers

Another great option is to use a tablet that runs a desktop version of Windows.

Tablets use very little electricity, they have battery backup in case the power goes out and don't take up a lot of space.

On the downside, they can be a little underpowered and generally don't have the same storage capacity as SFF computers.

You may have to upgrade the memory and disk space.

Overall, I would recommend getting a Dell tablet. I have a Dell Venue 11 Pro and it's good enough to run any Windows-based trading programs that I want to use.

However, I did have to upgrade the disk to a 512GB SSD because the original drive was tiny.

But again, do your own research and find something that works for you. Remember to get a tablet that runs the desktop version of Windows.

Install Your Trading Software and Set Up Remote Desktop

After you've purchased your Windows-based trading computer, install the trading software that you want to use.

Then you need to setup Remote Desktop, so you can control the PC from your Mac.

Go to: Start > Settings > System > Remote Desktop 

Turn Enable Remote Desktop to On.

Once Remote Desktop is turned on, there's one more step. You'll need to find out the IP address of the PC, so you can connect to it from your Mac.

First, make sure that you're on the same network as your Mac. This could be your wireless router at home, or your router at work.

Just be sure that both your PC and your Mac are connected to the same internet connection.

Then go to: Start > Settings > Network & Internet > Properties 

Scroll down to the bottom of the page and get the IPv4 address. Write it down because you'll need it in the next step.

It should look something like: 192.168.0.101.

Step 2: Install and Configure Remote Desktop on Your Mac

Remote Desktop can be downloaded for free from the Mac App Store. Once it's installed, click on the “+” symbol, then “Add PC.”

From there, you'll see this screen.

Enter the following information:

• PC name: Enter the IP address from step 1
• User account: Add user account (the login to the Windows computer)
• Friendly name: Give it a name that will help you identify the PC
• Group: Usually “WORKGROUP” for most Windows setups

After you've added the PC information, double click the new icon in your Remote Desktop window and a window will open with your Windows PC in it.

Now you're using your Windows PC on your Mac. 

Final Tips

The best thing about this method is that you can have 2 processors running at the same time. So you won't slow down your Mac, while you're using your Windows programs.

You can also use Windows only when you need it. Windows 10 still has many of the same problems that it had back in Windows XP, so I use it as little as possible.

However, using a Windows PC ensures that you have maximum compatibility with Windows-based programs.

Another benefit is you only have to open your Mac, while you keep your Windows PC tucked away in a corner of your house somewhere.

Sure, there are Windows emulators for Mac like VMWare Fusion, but I've found that they don't work as well as using a separate Windows PC.

Here's what I used to recommend, but I don't anymore.

So if you want to use Windows programs on your Mac, go get yourself a PC, set it up…and leave it on a shelf somewhere.

Then you can access it only when you need it.

The post The Best Way to Run Windows on a Mac for Trading appeared first on Trading Heroes.

Want to create automated trading programs…without hiring a programmer?

Well, this is one of the products out there that can help you do that.

With the launch of Forex Tester 4, the folks at Forex Tester also launched a drag-and-drop builder that can help you create automated trading strategies and indicators…no coding needed.

In this post, I'll review the product, show you how to use it and give you its benefits and shortcomings. I'll also show you why you may want to use this EA builder, even if you are a discretionary trader.

Watch the video above to see my review of VSB and a weird trading strategy that I stumbled upon with VSB that had 10% winners, but made 900+%.

The text version of the VSB review and updates are provided below.

UPDATE: VSB is now called Easy Forex Builder.

Automated Backtesting Can Be For Discretionary Traders Too

Before I get into the review, it's important to understand that automated backtesting isn't only for 100% automated traders.

Automated backtesting can help discretionary traders to quickly test basic ideas or optimize part of their trading strategy.

I call it Incremental Automation.

You only automate the parts of your trading process that make sense, and you can manually control the rest.

My Results Using VSB to Build an EA Without Coding

To test VSB, I created a super simple EA for MT4 and I backtested it in Forex Tester 4.

I find it much easier to use Forex Tester 4 for automated backtesting.

That's one of the reasons I stopped using MetaTrader as my primary trading/charting platform.

But Metatrader is still the best platform for running automated trading strategies and alert indicators, so it's my secondary trading platform.

Anyway, I started in VSB with a very basic idea.

I wanted to know what would happen if I bought every time price closed above the 50 EMA on the daily chart, and I set my stop loss to 25 pips and my take profit to 250 pips.

That's sounds like a crap system…but you never know for sure, until you try it out.

So here's what it looks like in VSB.

Creating the strategy took me all of 5 minutes.

Then I downloaded the strategy for Forex Tester, installed it and started backtesting.

I tested it on four currency pairs and it blew out the account on three pairs.

But when I tested with the GBPJPY, it did surprisingly well.

The EA made 900+% over about 13 years.

I certainly wouldn't recommend trading this system, but it can be a good starting point for creating a reliable trading strategy.

Now let's get into what I discovered about VSB, after doing this test.

Upsides of VSB

Here's what I liked about it:

• Very easy to create basic EAs for MT4 and FT4
• You can download the source code for your EA and edit it manually in MetaTrader Editor
• Create templates, EAs and indicators
• The EA builder workflow is easy to understand and use
• This tool can be used to build commercial EAs and indicators

Downsides of VSB

There are things about this software that I'm not impressed with.

Here are the downsides of VSB:

• I would love to see support for candlestick patterns in the EA and indicator builders
• The EA I created executed two trades per signal, when it should have only executed one, so there's a bug there
• Indicators are hard to build, I couldn't create an indicator that I found remotely useful
• The download process doesn't work reliably. Sometimes I have to download the EA twice.
• It's difficult to create complex trading strategies
• The free plan is extremely limited, you really do have to sign up for the paid plan

Conclusion

Visual Strategy Builder is a very basic tool and it does have some potential uses. 

In my opinion, these are the best ways to utilize Visual Strategy Builder:

1. Test parts of new trading ideas to get hard data on how they work. Then you can combine different ideas to create a complete trading strategy.
2. Test elements of an existing trading strategy to optimize its performance.
3. Create basic trading strategies, then download the code and build around it. You can learn how to get started with MT4 coding here.

You can setup a free VSB account here.

They do have paid plans, but you can do some very basic testing with their free plan.

Forex Tester will also convert your MT4 indicators (in .mq4 format) into Forex Tester indicators, so you can backtest your strategies with the same indicators.

But it doesn't always work properly. I found that it works about 50% of the time.

UPDATE: Since writing this review, I've found a better solution.

NakedMarkets has a much more powerful no-code strategy builder and there is only a one-time fee, instead of paying the monthly fee for VSB/EFB.

I can create more complex trading strategies and test them quickly.

The only downside at the moment is that NakedMarkets cannot export the strategies to MetaTrader EAs, but they are working on that.

The post Visual Strategy Builder Review: Build EAs Without Coding appeared first on Trading Heroes.

I get this question a lot:

“How do you calculate the correct lot size in Forex Tester, based on percentage risk?”

Forex Tester is a great piece of software that has helped many traders become consistently profitable. But it kills me that you cannot enter a trade based on percentage risk.

TradingView has this feature for live trading, which I use all the time.

Without a way to accurately calculate the correct lot size, you may make mistakes, which will lead to inaccurate testing results or lost time, when you have to go back and retest the trade. 

So if you are having the same frustration, here are two ways that you can easy calculate your lot size in Forex Tester, by using percentage risk. One method is free and takes some time, while the other is paid and instant.

Either way there is something for everyone. 

If you prefer the text version, it is provided below the video.

…and yes, this works for both Forex Tester 2 and Forex Tester 3

How to Calculate Forex Tester Lot Size Based on Percentage Risk Video Tutorial

Roll Your Own Spreadsheet

Traders ask me how to setup a spreadsheet for testing and it's actually quite easy.

Here's how you do it…

First, open your favorite spreadsheet program. If you don't have one, you can sign up for Google Drive for free and you can create your spreadsheet there. It doesn't matter which program you use because the calculations are pretty simple.

Next, create these row titles:

• Account Balance (entered)
• % Risk (entered)
• $ Risk (calculated)
• $ Per Pip (entered)
• Pips Risk (entered)
• Lots (calculated)

Here's the formula for the $ Risk row:

This is more of a double check to see that the calculation is working correctly and to double check your losses against this risk number.

Here is the lot size calculation:

Spreadsheet Benefits

• Easy to implement
• Free

Spreadsheet Downsides

• Takes time to change settings at the beginning of each test
• You have to flip back and forth between your Forex Tester screen and the spreadsheet

So if you don't want to spend any money, then the spreadsheet is the way to go. However, if you do a lot of testing and you want the most efficient way of calculating your lot size, then you need to have a Forex Tester script.

Use the Snapdragon Forex Tester Lot Size Calculator Script

Using a spreadsheet to calculate lot size is obviously not instant. So it will slow you down.

But this method gives you an instant calculation.

Once you setup this script, you can simply use hotkeys to enter your trades, which speeds things up considerably. 

I have setup Control + 1 and Control + 2 as my keyboard shortcuts for short and long trades, respectively.

Here is the settings window for one of the scripts:

The settings can be changed individually, so you can have different settings for both, if you so choose.

Most of the settings are pretty straightforward, but here are the ones that really make this script worth using:

• Entry Method: You can select Bracket bar (brackets current bar with stop loss and pending entry order) or Use pending order levels (enter a pending order and the script will automatically calculate lot size).
• Risk Definition: You can either risk fixed percent of equity balance or fixed dollar amount per trade.
• Take Profit Type: Set the R multiple of your profit target. For example, if you want to test a 5R profit target, the script will target 5 times your risk as the take profit.

Script Benefits

• Instant lot size calculation and trade execution
• Different settings available, based on your trading method
• Less mental calculations means less decision fatigue and you can usually test longer and more accurately

Script Downsides

• It may not work for all trading strategies, so be sure to learn the details of how it works
• You do have to pay a few bucks to get it

If you value your time and want the fastest possible lot size calculator available, then this script is for you.

Click here to download it.

Conclusion

So there you have it, the two fastest methods that I know of to calculate the correct lot size on your backtesting trades, based on percent risk. Either way, these solutions will speed up your backtesting and allow you to see results faster than having to manually calculate risk on each trade and possibly making a mistake.

If you don't have Forex Tester yet, I would highly recommend it. I have negotiated a discount for Trading Heroes readers, so you can go to this page to get that discount.

Do you know of any other methods to calculate the exact lot size in Forex Tester, based on percentage risk?

Disclaimer: Some links on this page are affiliate links. We do make a commission if you purchase through these links, but it does not cost you anything extra and we only promote products and services that we wholeheartedly believe in. TradingHeroes.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

The post Fastest Ways to Calculate Forex Tester Lot Size with Percent Risk appeared first on Trading Heroes.

UPDATE (Nov. 13, 2022): This is an old post and since this was first written, I've found much better solutions. First, you'll find my current trading journal recommendations here. Second, I've discovered a backtesting software that has fantastic reporting built in. Learn more about it here.

As you probably know, Forex Tester is awesome.

But just like any other software, it has its shortcomings.

One area that it does not do so well is when it comes to backtesting reporting.

In this post, I'll show you what Forex Tester 2 currently has in the way of reporting, a few of the key things that you need to be able to get out of your backtesting data, then I'll show you an easier way to get this information.

But first, let's take a look at what Forex Tester 2 currently offers, in the way of reporting…

Built-In Forex Tester 2 Reporting

Here is what Forex Tester 2 currently has in the way of reporting. As you can see, it's pretty basic. If you would like to see the text version, skip past the video.

Basically, Forex Tester 2 gives you the profit chart:

On top of that, there are these other basic metrics that they provide. I've provided some stats from a recent round of backtesting that I did.

• Days processed=5335
• Months processed=177.83
• Total trades=90
• Profit trades=64
• Loss trades=26
• Profit trades cons.=14
• Loss trades cons.=6
• Trades/day=0.02
• Trades/month=1
• Profit trades/month=0
• Loss trades/month=0
• Max profit trade=884.35
• Max loss trade=258.64
• Net profit=7384.91
• Gross profit=9953.48
• Gross loss=2568.57
• Profit/month=41.53
• Average profit=155.52
• Average loss=98.79
• Max drawdown=0.00
• Profit factor=3.88
• Return, %=73.85
• Max lot used=74.00
• Restoration factor=0.00
• Reliability factor=0.00
• Profit probability, %=71
• Loss probability, %=29

As you can see, there is quite a bit of information here. But there are also a few glaring issues.

For example, the max drawdown is zero? The restoration factor and reliability are zero? Something is fishy there.

But again, no software is perfect. 

Although most of the basic metrics are there, you should look at some other things…

What Advanced Backtesting Metrics Do I Need? 

There is some other key information that you will need to look at that might help you improve your trading method. For example:

• Day of the week analysis – Are certain days that are more profitable than others? Is there a day of the week that I should avoid?
• Monthly analysis – Are there any seasonal tendencies?
• Long / Short analysis – Are either longs or shorts much more profitable?
• Expected monthly return – Can I make a living on this when I combine my results from all currency pairs?
• And more!

But that's just for starters. Obviously, there are other metrics that you may want to look at. 

So how can you get this information when FT2 doesn't provide it?

Here's one way…

How to Use a Spreadsheet to Get Additional Backtesting Information

The first thing that you will have to do is export your trading record from FT2. Do this by right-clicking in the trades window. Click on export stats, then save the results as a text file on your desktop.

Then import your history file into your favorite spreadsheet program. Here's how to do it in the big ones:

• Import text file into Excel 
• Import text file into Google Sheets
• Import text file into Open Office
• Import text file into Numbers

Now the fun begins. The first thing that we should look at is the day of the week analysis.

So we need to find the formula that converts a date into the actual day of the week.

In Excel, the formula is: =WEEKDAY(date)

Excel will return a number for the day of the week, as follows:

• Sunday = 1
• Monday = 2
• …
• Saturday = 7

But therein lies the problem…the Date field in the Forex Tester 2 includes date and time. Some spreadsheet programs will convert this format into the day of the week, but others may not.

If not, then you will have to separate out the date from…

Oh, who the hell are we kidding?! This frickin' blows!

Let's just skip to the easy method…

How to Get Advanced Forex Tester 2 Reports for Free

This video will show you how to get started right now and they type of information that you can get from these reports. If you prefer the text version, it is provided after the video.

To get started with Tradingrex, simply create a new account. Yes, the account really is free.

They make their money by selling their reporting services to trading firms. It's free for individual traders.

Once you are logged in, click on the Add New Account button. Then give your account a name. This is not actually an account, but the name of your round of backtesting.

I recommend giving it a name like:

[system tested] [currency pair] [timeframe] [version number] [test number]

This will allow you to easily sort your tests by name. Next choose Forex Tester 2 text export as your Datasource.

Then click on the Create button to create your account.

From there, you can select the Forex Tester 2 file to upload by clicking on the Select Files button. The upload is really fast, but it may take a little longer if you have a lot of trades. Just upload one file per account for easier analysis.

Now you can check your dashboard to get stats and charts like…day of the week analysis. Wasn't that much easier than the spreadsheet method?

Another really cool feature is you can create a custom link to share your backtesting results. This is totally optional and you can revoke it at any time.

Great for team backtesting, or sharing your results with your mentor.

Final Thoughts on Tradingrex Detailed Forex Tester 2 Reports

So that's all there is to it. One thing that you should do is double check between the two reports.

Having two reporting systems can give you a good way to see if there might be computational errors in metrics that are the same between the two reports. That may involve some spreadsheet computations in the beginning, but it is better to be sure than to be making decisions off incorrect data.

Of course, since the reporting in Forex Tester 2 is very limited, you can only compare the basics. But I encourage you to test out a few different reporting methods, to see which one works best for you.

Disclaimer: Some links on this page are affiliate links. We do make a commission if you purchase through these links, but it does not cost you anything extra and we only promote products and services that we wholeheartedly believe in. TradingHeroes.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

The post How to Get Free Detailed Forex Tester 2 Reports for Your Backtesting appeared first on Trading Heroes.

I have been using Forex Tester for a long time.  But to be perfectly honest, I have never used History Mode. Testing Mode has always been the best way to manually backtest trading systems, so I really never had a need for the other mode.

But I recently got curious and decided to give it a try. Come to find out, it does have some great uses.  This post will show you how to get the most out of it and when to use it and when not to use it. If you prefer the text version, it is provided after the video.

How To Use History Mode

How To Get Started

The first thing that you want to do is make sure that your data in Forex Tester 2 is up to date. Go to Tools > Data Center.

Then select the pair you want to update the data for and click on the Update from server button. When Forex Tester is done updating, click on the Exit button.

Mark Your Setup On The Chart

Now go through the chart and mark whatever setup you are looking for on the chart. For example, let's say that you are looking for engulfing candle patterns on the weekly chart.

You would simply scroll through the chart and mark every engulfing pattern that you see. Be sure to go back and double check that you found all of your setups. I thought that I had all the setups, but it turns out that I missed quite a few.

After you are done, you can now take a step back and scroll through your charts. Observe what happens before and after every setup.

When you are using Testing Mode, there can be a tendency to get too focused on looking for the next setup. By using History Mode, you can see the bigger picture.

I also found this exercise very useful in getting a feel for how often the setup happens. One of my trading rules is to only take a maximum of two losses on any one trade idea or setup.

When I looked at the engulfing candles that I marked on the chart in History Mode, I didn't see any time where it would have been beneficial to violate that rule.

There are some trading methods that have a very small winning percentage, but win big, when they do win. It turned out that engulfing candles didn't seem to be one of these strategies.

Conclusion

So while Testing Mode is where Forex Tester 2 really shines, testing mode can be helpful too. I have found it particularly useful on the longer time frames because there is far less data. Marking off whatever setup you are looking for first, then scrolling through the charts can be a great way to look at the currency pair from another angle.

You could also do this on Metatrader. However, there may be less data available on Metatrader, depending on your broker. If your broker does provide a lot of data, then you don't have to use History Mode in Forex Tester.

Either way, give it a try and let me know what you think. Feel free to leave a comment below.

Disclosure: I do get a commission if you buy through some of the links on this page. But it does NOT cost you anything extra, it helps pay for my hosting costs and a portion of the proceeds go to my charity partner.

The post How to Get the Big Picture with History Mode in Forex Tester 2 appeared first on Trading Heroes.

This is a question that I get from time-to-time, so I thought that it would be useful to create a tutorial.

If you are using the Linux operating system on your computer, this post will show you how to run MetaTrader 4/5 and Forex Tester on your computer.

If you have never heard of Linux before, I will also get into why it might be something that you would want to use on one of your computers, instead of installing the dreaded Windows as your primary operating system.

However, if you have some money to spend and really want a trouble free computer I recommend a Mac.

But Linux does have its benefits.

Why Use Linux?

If you haven't heard of Linux before, it is a free operating system that was first released in 1991 and was supposed to rival Windows and the Mac OS.

But it never gained a lot of mainstream popularity due to all of the technical know-how that was needed to even install the simplest things.

It is open source software (free) and just like the Android mobile operating system, the functionality that you can get with a particular version will depend on the company that customizes it.

One version has emerged as the clear leader for the general public is Ubuntu.

They even have versions for phones and tablets.

This is the flavor of Linux that I will be talking about in the rest of this post.

My friend Adam Jowett uses it for social media and web browsing when he is trading.

However, don't let the “ugly stepsister” status on the desktop fool you, it is still a very powerful and secure operating system that several major stock exchanges, including the New York Stock Exchange currently use it to run their servers.

I have personally installed it on a couple of PCs and it is actually pretty nice.

If you are looking for something to just do email and some web surfing, it is perfect…and free.

But if you want to run other programs on it, that is when compatibility becomes an issue.

It is also optimized to run using much less computing power, compared to other operating systems.

So if you want to revive an old computer, Ubuntu would probably run quite well on computers that would otherwise freeze up with Windows.

But can Ubuntu Linux be used as a legit trading platform?

Yes it can…with a little tweaking. 

Using Wine To Install Metatrader Linux  (Free)

The first way to get MetaTrader Linux working is to use Wine.

The good news is that it is free and it can be used to run Windows programs on Linux, BSD, Solaris and Mac OS X.

It is basically a lightweight Windows emulator that allows Windows programs to run within these operating systems.

The bad news is that it cannot run NakedMarkets.

That is when you will have to use the the solution in the next section.

If you are having issues with Wine, you can also try CrossOver.  It is a paid product, but they do have a free trial.

The CrossOver programmers have contributed a lot to Wine however, so you probably want to try Wine first.

Using VMWare Player (Free) + Windows (Paid)

Another way that you can go about this is to download VMWare Player.  Unlike VMWare Fusion for the Mac (which I love), Player is free.

The best part about Player is that you can create snapshots of the operating system and you can just save it for later, in case something gets messed up.

However, there is a catch…you have to install Windows on it.

This is where you would have to buy Windows…or you could obtain it through other means, which I know nothing about.

Regardless of how you get it, I recommend Windows 11 at this point.

Yup, there is no way around it, sometimes you really do need Windows.

However, the upside is that you will have maximum compatibility with NakedMarkets, Forex Tester, MetaTrader, and any other Windows program that you need to use.

The question then becomes, why not just install Windows as the main operating system?

You could do that, but let's face the facts…Windows sucks blue whale balls.  You will spend more time fixing it than actually using it.

By using another operating system like Linux or OS X as your primary operating system and only using Windows when absolutely necessary, you keep your hair and remain a generally pleasant person to be around.

Other Options

But these aren't your only options.

Although MetaTrader, NakedMarkets and Forex Tester are the industry standards when it comes to charting and backtesting, if you are willing to experiment with other platforms, you may find that they work well enough for your needs.

One thing that you can try is the desktop version of Trade Interceptor.

As you probably know, I'm a big fan of their mobile app, but their desktop software leaves a little be desired.

Still, it runs on Java, so it will run on almost any PC and it has backtesting functionality.

So it is something you may want to try.

I'm really rooting for TI, I think they can really do some amazing things in Forex.

Another thing you can try for charting is using the Java version of your trading platform, like the platform that Oanda has.

Charting is generally not great with these platforms, but it may be good enough for you and save you the headache of trying to figure out a Metatrader solution.

However, you would still need to figure out a way to install Forex Tester for backtesting.

Conclusion

So that is how you can turn your Linux computer into a Forex trading computer.

It can take a little time to setup, but it will work.

There is a certain satisfaction that comes with using a free operating system like Linux…even if it does require some additional steps to get working.

The post How to Run MetaTrader and Forex Tester on Linux appeared first on Trading Heroes.

Getting started with Forex Tester 2 can be a little confusing. Loading data and setting up your first test isn't too intuitive.

Once you figure it out however, it is really easy to do tests. Many of the Pro Traders that I have interviewed on the podcast say that backtesting is one of the biggest keys to their success and that Forex Tester is one of the best programs out there.

So take a minute to learn this process. It is one of the most highly leveraged skills that you can develop.

This video assumes that you have already purchased and installed Forex Tester 2 on your computer.  If you would like to get a discount on the purchase of Forex Tester 2, use this link and you can get my special discount code.

The text version of this tutorial is provided after the video.

In this video, you will learn how to:

• Set the initial deposit in your backtesting.
• Load free historical data into Forex Tester 2, in 2 minutes flat!
• Add indicators to your charts.
• Change the spread, margin, lot size and swap rate of each pair.
• Test different currency pairs at the same time.
• See multiple timeframes at the same time.
• And more!

Download The Most Current Data

The first thing that you have to do is make sure that your initial deposit is similar to what you will actually be trading with. For example, if you plan to open an account with $5,000, then use that as your initial deposit. Testing with a $1,000,000 account can be fun, but it won't help you simulate real-life conditions.

Start by making sure that you are in History mode.

Go to Tools > Options in the main menu to setup the initial deposit.  Then change the initial deposit to your target starting account balance.

Next, you have to download the latest market data. Make sure that you are still in History Mode, then select Data Center from the Tools menu.

Then make sure that the currency pair that you want to test is highlighted. We will use the EURUSD in this example. Be sure to check the date on the right side of the green bar (Imported 1 minute history). This tells you the most recent date that you currently have data for.

If the data is not recent, click on the Update from server button to update.  Download the updated data for all the pairs you want to use in your testing.  The pair that is highlighted will be the one that gets updated.

I have also changed the properties of the EURUSD for testing purposes, so I can emulate trading nano lots. If you want to do the same, use my settings in the Symbol properties section above. If you anticipate your spread being more than 3 pips, you need to change that too.

When you click on the Change properties button, you will see the following screen.  Change the settings according to what you will be using in your actual trading.

Keep the default settings for everything else.  Click on OK when you are done.

After you have updated the data, then click on the Generate button to prepare the data for testing.  If you want to test two or more currency pairs at the same time, check those pairs here.

It will take a minute or two to generate the ticks, then you will be ready to start your test.

Once you have generated the ticks, click on the Exit button to close the Data Center window. Now switch to Testing Mode in the upper left corner.  Then add a chart by clicking on the Open new chart button.

To add indicators, click on the List of indicators button.

Conclusion

That is how to setup your first backtest in Forex Tester 2.  It is the software that myself and other traders recommend.  There are other options out there however, so find the one that works best for you.

Be sure to also check out my totally free course that will take you step-by-step through the entire process of testing your first trading strategy.  Backtesting can help you understand how a trading method would have performed in the past and can give you more confidence in your trading method.

Testing allows you to get learn without risking any money in the markets. If this interests you, I encourage you to get started right now.

Disclosure: Some of the links above are affiliate links in which I get a commission if you purchase through those links.  However they don't cost you any additional money.  In fact, the Forex Tester 2 links actually give you a nice discount off the regular price.  Part of my commission goes towards supporting my charity partner. 

The post How to Setup and Load Data Into Forex Tester 2 appeared first on Trading Heroes.

One of my biggest hesitations when I was considering switching over to a Mac was the fact that certain trading programs were not available.

In particular, I had to have Forex Tester and Metatrader on Mac.

When I found out that you can use VMWare Fusion to run Windows on a Mac and I could finally have the trading software I needed, I was all about it.

Unfortunately, I initially went about it the wrong way.  Instead of saving up to buy a real Mac, I turned a cheap Dell Mini into a Mac.

Although I loved it at the beginning, the screen turned out to be a little too small, the processor too slow and all the fiddling that I had to do to get OS X onto the Dell made the computer unstable when there were new updates to the operating system.

Then recently, it dawned on me that if I sold my Windows PCs plus a couple of other things that I had lying around on Ebay, I could raise the money for a real Mac, right now.  So that is what I did.

How is it?

I have been an IT consultant for about 11 years now and I have used all types of computers.  The other day I counted and I have personally owned 9 computers in my lifetime and have used countless others.

But guess what?

This MacBook Pro 13 is the best damn computer I have ever used.  Period.

Almost everything about this computer just makes sense.  I got tired of Windows updates running twice a day and having to ghetto rig a program just to get it to work like it is supposed to.

Yes, it is more expensive than your average Windows computer.  But guess what?  It actually comes out cheaper in the end because you are not fixing stupid problems or having to buy third party software for stuff that should be included in the operating system.

Anyway, if you are in the market for a new computer, even a trading one, I would highly recommend a Mac.  Still skeptical?  Check out this video and see what it looks like to run Metarader on Mac.

Note:  Keep in mind that you also have to have a copy of Windows handy so you can install it in VMWare Fusion.

UPDATE (10/10/2012): A reader emailed me and wondered if she had to get virus protection for her Windows installation.  She was very worried about infecting her Mac.  If you are just running Metatrader and/or Forex Tester, then you are probably OK without it.   But it is Windows after all (the least secure of the major consumer operating systems), so you should get something.

Fortunately, Microsoft does do something right.  Enter Microsoft Security Essentials.  It is their version of anti-virus software and it is free.  It also works better than some of the paid products that I have used and it doesn't slow the computer down.

Be sure to get a copy of Windows XP (if you can) because that runs the fastest.  You can still find a copy on eBay.

Disclaimer: Some links on this page are affiliate links. We do make a commission if you purchase through these links, but it does not cost you anything extra and we only promote products and services that we wholeheartedly believe in. TradingHeroes.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

The post How to Run MetaTrader and Forex Tester on a Mac appeared first on Trading Heroes.

The leverage does not need to be exact to the penny, but it must give an accurate representation of actual trading conditions. If you are backtesting at a much higher leverage, your strategy could margin call when you trade in a real account with lower leverage.

But you already knew that…

Anyway, here is a quick tutorial on how to change the leverage in Forex Tester 2:

The post Forex Tester 2 Tip: How to Change the Leverage You Use During Backtesting appeared first on Trading Heroes.

This is how you open the Equity or Profit Graph from the Forex Tester 2 menu.  Keep in mind that you need to already have some testing results to graph to begin with.  So do some backtesting before you open the Profit Chart.

If you have testing results, it will look like this:

As you can see, this graph goes from January 2001 to May 2010.  It started with $1,000 and ended with less than $850, not a good system!  In addition, we can see that the system is fairly volatile, which is not really a good thing either.

In this case, we can obviously see from the total loss that it is not a good system.  However, if you had two profitable systems with similar ending winning percentages, but different Profit Graphs, then we may want to use the settings that create a smoother graph.

The post Forex Tester 2 Tip: How to View the Equity Graph appeared first on Trading Heroes.