Backtesting multiple markets at the same time has several benefits.

The short version is that you'll save time and you can test based on market correlations.

This process will be similar to backtesting multiple timeframes at the same time, but will require a couple of additional setups.

Backtesting multiple markets is easy with an automated strategy.

Just run the trading program against data from different markets.

But viewing multiple markets at the same time is not as easy with manual testing.

In this quick tutorial I'll give you the benefits and downsides of manual multiple market backtesting and exactly how to do it.

Benefits of Backtesting Multiple Markets Simultaneously

If you already know about the benefits of backtesting multiple markets, skip down to the section on setups.

But if you aren't sure why you should do it, here are the top 2 reasons.

Save Time

First, testing multiple markets can save you a ton of time.

Let's say that you want to manually backtest a trading strategy on the EURUSD and the S&P500 at the same time.

Furthermore, let's say that testing each market individually will take you 2 days.

If you run both charts at the same time and take trades on both charts, it might only take 2.5 days to do your test instead of 4 days.

This is a huge benefit.

See Market Correlations

The other reason to backtest multiple markets at the same time is to see market correlations.

For example, a frequently talked about correlation is between the CADJPY and Oil.

Since Canada is a major oil exporter and Japan imports all of its oil, the price of oil can effect each economy accordingly.

As always, don't take my word for it, backtest it yourself.

There are many other market dynamics at play with regard to currency prices, so the price of oil isn't always going to be the biggest influence.

But if you want to test this, it can be tough to see the correlation (or lack thereof) if you are only backtesting one market at a time.

Having both charts side by side makes this easy.

Downsides of Backtesting Multiple Markets Simultaneously

Multiple market backtesting is not all sunshine and unicorns though.

Here's what you should be aware of if you're going to do this.

Loss of Focus

One potential downside is that you could miss some signals, if you have too many markets open at the same time.

So if you want to test on multiple markets, you have to be super focused.

It's really easy to miss trades when you have several charts going at the same time.

I would suggest not testing more than 3 markets at the same time…max.

Two markets is ideal.

Computer Slow Down

If you have too many markets open at the same time, this can also slow down your computer.

Your trading program will have to update the data for each chart and also calculate your indicators (if you're using any).

Depending on how powerful your computer is, and which backtesting software you're using, this might slow things down.

So be sure that you have a decent computer and software that can handle this.

The most important spec on a computer is going to be the amount of RAM you have.

Processor speed does contribute to the overall speed, but as long as you have a processor made in the last 5 years, you'll see way more gains from RAM.

At least 16GB is recommended, but 32 GB or more is ideal.

How to Setup a Backtest in Multiple Markets

Alright, now that you have some background on multi-market manual backtesting let's get into actually how to do this.

I've personally done this with NakedMarkets and Forex Tester, but this will work in a similar way in other programs.

It's not possible to do this in something like MetaTrader.

If your software cannot do this, I would highly suggest switching to NakedMarkets.

This software is much more optimized for multiple market backtesting than Forex Tester.

I'll use NakedMarkets for the rest of this tutorial because that's what I use.

Step 1: Download Historical Data

You're going to need some data to test with, so the first step is to go to: Tools > Data Center and download historical data for the markets you want to test.

NakedMarkets provides updated historical data for free, no subscription needed.

Step 3: Setup the Backtest

Once the data is loaded, it's time to add your charts and set them up.

Go to: File > New Backtest

Name your backtest and the starting balance for the account.

Then click Next.

The choose the markets you want to backtest. Be sure to select more than one market on this screen.

Click on Next.

Use the default settings on the last screen and click on Finish.

Now a window for each market will open.

Resize the windows to your liking.

If you need to add more windows, click on: File > Add New Chart and select the chart you want to add.

You'll only be able to add markets that you selected when you created the backtest.

Keep in mind that you can also have multiple timeframes for each market.

Simply add another chart for each market, then change the timeframe of the second chart.

You can also change the timeframe of each chart by clicking on the chart you want to change, then clicking on the timeframe buttons in the upper left corner of the screen.

Once all of your charts are setup, it's time to start backtesting!

Step 4: Press Play and Start Taking Trades

The hard part is done, now it's time to start testing.

Press the play button in your software and it will advance all of your charts at the same speed.

Take trades according to your trading plan.

Step 5: Review Your Results

Once you've completed a full round of backtesting, it's time to see how well you did.

A common mistake is to judge a trading strategy purely on its total return.

Professionals examine at all aspects of a strategy to identify its potential because most strategies won't have good results on the first try. 

There are 3 main questions that you should ask yourself when reviewing your backtesting results:

• Can I possibly improve this strategy? This is usually possible when a strategy is near breakeven. Consider experimenting with your risk management or exits.
• Can I potentially trade this on different timeframes or in multiple markets at the same time? This can give you more trades, if lack of trades is your problem.
• Is the overall trend of account balance good? If your strategy wins consistently, but has a low overall return, then you might simply need to increase your risk.

Read more about how to optimize your strategies in this article.

Be willing to experiment with your strategy until you find something that works.

That's the beauty of backtesting.

You'll get a good idea of what works BEFORE you actually risk real money.

There is also a creative element, which makes it fun to try out new ideas that you come up with.

Conclusion

So that's why and how to manually backtest your trading strategies in multiple markets at the same time.

If you've been testing one market at a time, this can be a game changer.

It will allow you to find profitable trading strategies and eliminate losers faster.

Happy testing!

The post How to Manually Backtest Multiple Markets at the Same Time appeared first on Trading Heroes.

In this tutorial, I'll show you how I backtest multiple timeframes at the same time.

You'll learn how to setup multiple charts and have them all run at the same speed while you backtest.

This is easy to do.

There are many software solutions that can do it, but it may not be obvious how to do it, if you don't know what to look for.

Here's what it looks like on my laptop.

As you can see, I have the Daily, 4-hour, 1-hour and Weekly charts open.

Having multiple charts running at the same time has many advantages, which you'll learn about in this tutorial.

If you want to learn more about backtesting in general, be sure to read my backtesting guide on how to backtest in any market.

Alright, let's get into it…

Why Backtest Multiple Timeframes at the Same Time?

There are many reasons that you may want to have multiple timeframes open at the same time.

I feel that most traders will benefit from watching more than one timeframe when backtesting.

First, when you have multiple charts open at the same time, you don't have to flip back and forth between the different timeframes to check things like pivot points, trendlines or support/resistance levels on higher timeframes.

This alone can save you a ton of time.

Another reason to use multiple timeframes is that you can take trades on all of those timeframes.

Let's say that you want to backtest the same trading strategy on the Daily, 4-hour and 1-hour charts.

Having the ability to take trades on all of those charts at once will be much faster compared to testing each timeframe individually.

Now, I've personally found this a little hard to do in the past.

But if you have Rules setup on each of your charts, then you can have your backtest pause every time a trading setup condition happens.

Finally, you can not only test multiple timeframes at the same time, but you can also have charts of multiple markets running at the same time.

I'll get into multiple markets in another tutorial, but for now, let's take a look at how to setup the charts.

How to Setup a Backtest With Multiple Timeframe Charts

I'll demonstrate how to do this with NakedMarkets because that's what I use.

But the process will be similar, regardless of which software you use.

This method also works in Forex Tester and other software.

First, open NakedMarkets and start a new backtest.

Select the settings for your backtest, along with the market you want to test.

Once you've finished the setups, you'll see a blank chart.

Now go to: File > Add new chart > [your current market]

This will add another chart.

If you want to add more timeframes, keep adding charts until you have all of the charts you want.

Then resize each chart so they all fit nicely on your screen.

You can also layer the charts if you want the charts to be bigger.

Now select each chart and change the timeframe to the one you want to display on that chart by clicking on the timeframe selectors in the toolbar.

You can see the timeframe of each chart in the upper left corner of the window.

Once you have setup the timeframes for each chart, select the timeframe that want to advance all of the charts at.

You can do this by selecting the Step timeframe in the toolbar, next to the Play button.

For example, if you select the 5-minute timeframe, all charts will advance in increments of 5 minutes.

Now click the Play button and the charts will move forward in unison, based on the timeframe that's currently selected in the Step setting.

To take a trade, simply right-click on any chart and enter a trade.

Since all of the charts are moving forward at the same speed, it doesn't matter which chart you take the trade on.

Your trades will appear on all charts at the same time.

It's usually best to select a low timeframe in the Step setting because that will show you the greatest level of detail across all the charts.

Doing this will also help you see what candles look like on the the higher timeframe charts, before they close.

Many times, traders don't wait until a candle closes before taking a trade.

This can lead to impulsive trading.

Watching a candle unfold will help you understand the emotions that you can potentially go through as the candles develop.

Alright one last thing…

You can add Rules to each chart to take trades or simply pause the chart every time your setup happens.

To do this, simply drag the Rule you want to use from the folders on the left, onto the chart you want to use it on.

Conclusion

Now you know how to do a backtest on multiple timeframes at the same time.

Using this method will save you a lot of time and help you find profitable trading strategies faster.

This can be done on many different backtesting platforms, so find out if your software can do it.

If your software can't do it, then consider using NakedMarkets.

It's what I use.

All that's left is to finish your first backtest.

Go for it!

The post How to Manually Backtest Multiple Timeframes at the Same Time appeared first on Trading Heroes.

If you're not sure about paying for FX Replay or you're already a user and are looking for something different, then this short list will show you the best alternatives that may suit your needs better.

I've been using and reviewing trading software since 2007 and my goal is to give you the best FX Replay alternatives based on my experience, and help prevent you from wasting your money on inferior products. 

I'll provide both free and paid options.

Alright, let's get into it…

The Bottom Line

If you just want a summary of the details below, here are my picks for the best free and paid alternatives.

If you want more details, here's what you need to know about each alternative.

Paid FX Replay Alternatives

There are many paid backtesting solutions for Forex traders.

I've filtered the list down to these 3 finalists.

Before I get started, you might be wondering why TradingView isn't on this list.

Since FX Replay adds features on top of the TradingView chart interface, I won't include TradingView on this list. FX Replay provides a lot more manual backtesting benefits compared to TradingView, so there's no need to list TradingView.

NakedMarkets (Best Paid FX Replay Alternative)

NakedMarkets is my favorite manual and automated backtesting software.

It's a much better choice than FX Replay.

The primary benefits are a one-time fee, superior analytics and the ability to build automated backtests without any coding knowledge.

You can read my complete review of NakedMarkets here.

Benefits Comparison

• One-time cost, no subscription fee
• Updated historical data included, no subscription fee
• Fastest backtesting solution, with drag-and-drop, no-code Rules, for partial or fully automated backtesting and strategy development
• Best analytics tools of any software on this list
• New features in the pipeline, including the ability to export strategies to MetaTrader EA format
• Easy to use interface

Downsides Comparison

• Not browser based
• Windows based or Mac/Linux via VM

Learn more about NakedMarkets here.

Forex Tester

Forex Tester is not quite as good as NakedMarkets, but it's still a very solid choice.

I've used it for a long time and only switched to NakedMarkets recently.

In terms of how it compares to FX Replay, here's what you need to know.

Benefits Comparison

• One-time software cost
• Relatively inexpensive
• Ability to backtest MetaTrader EAs
• Easy to use interface

Downsides Comparison

• Historical data subscription is paid
• Not browser based
• Windows based or Mac/Linux via VM

Soft4FX

I'm not a fan of Soft4FX, but it does fill a legitimate niche on this list.

I have purchased and used it in the past.

This is a plugin for MT4 and MT5 that will turn these platforms into manual backtesting software platforms.

Here's how it compares.

Benefits Comparison

• Low, one-time cost
• You get free data from your MetaTrader feed

Downsides Comparison

• A little confusing to install and use
• No browser option, might not work with a VM
• FX Replay has slightly better reporting

Free FX Replay Alternatives

It's actually a close call in the free department.

These 2 platforms both have their benefits and downsides, but after some careful consideration, here's the one I would use if I was going to go the free route.

MetaTrader 4 or 5 (Best Free FX Replay Alternative)

These platforms are very similar, so I'll include them together.

MT4 has more custom indicators and EA available, but MT5 is a newer platform and can be used to trade more markets.

Pick the one that you like better.

For manual backtesting purposes, they are equal.

Benefits Comparison

• Free data software
• Free historical data
• Many custom indicators and EAs available online

Downsides Comparison

• Much slower backtesting than FX Replay because you need to use a spreadsheet
• No built-in stat tracking and analysis
• Not quite as easy to use
• Not browser based, Windows is best

Traders Gym in ThinkTrader

Traders Gym is a free backtesting software that I've featured a couple of times on my YouTube channel.

It's a decent free solution because it has more built-in backtesting features than MetaTrader.

But it does have some limitations that makes MetaTrader a better choice.

You can learn how to use it in this tutorial.

Here's how it compares to FX Replay.

Benefits Comparison

• Free software
• Free data

Downsides Comparison

• Pauses often when it loses internet connection
• Not as many markets available
• Interface is not as intuitive as FX Replay
• A little clunky to use
• Not browser based

FX Replay Review

If you haven't checked out FX Replay yet, here's my summary review of the software and what I think of it.

Full disclosure, I've only tried the free version, but I have also researched it extensively.

I've been doing this long enough that I know what to look for.

Based on my analysis and previous experience with backtesting software, I didn't see any reason to switch from what I currently use.

Benefits

• Available on any computer via a browser. No clunky software to install.
• They use TradingView charts, which are the best browser-based trading charts on the planet.
• The platform provides additional backtesting upgrades on top of the benefits of TradingView charts.
• Custom indicators are available, some of which are not available on other platforms.
• Wide range of markets available.

Downsides

• It is a subscription service, so if you ever decide to switch platforms, you'll lose your backtesting data.
• Limited analysis metrics.
• No automation tools.
• The interface is a little too simple, not enough features.

Final Thoughts

So those are the best options if you're looking for backtesting software that's an alternative to FX Replay.

Based on my extensive research of the product, it doesn't have the same benefits of the paid alternatives on this list.

However, I'm sure that they will be adding new features into the future, so I look forward to seeing what they come up with.

Keep in mind that technology can change quickly, so my analysis is based on the information available at the time this was written.

The post 5 Best FX Replay Alternatives (Free and Paid) appeared first on Trading Heroes.

Welcome to another tutorial where I’ll be guiding you through the process of creating, testing and using Entry Rules in NakedMarkets to dramatically speed up your backtesting.

This is easy to do once you've gone through it from beginning to end, so let's get right into it.

The Benefits of NakedMarkets Entry Rules

NakedMarkets Entry Rules allow users to setup pre-defined trade entry parameters that can be reused every time a trade is entered.

These parameters can include the type of order, the stop loss, take profit, trade management and amount of risk per trade.

Once an Entry Rule is created, simply drag and drop it on the chart whenever you want to enter a trade or pending order.

This will save you a lot of time because you won't have to setup each individual component of every trade.

Entry Rules can also be used later if you want to create a semi-automated or fully automated trading strategy.

Now that you understand the benefits, let's get into how to set them up.

Create a New Entry Rule

To create an entry rule in NakedMarkets, follow these steps:

1. Navigate to: Rules > Rule Manager
2. Click the New Rule button located in the lower left corner of the window.
3. Choose Entry from the rule types.

Naming Entry Rules

When naming Rules, using the following convention streamlines the process:

• Strategy: Start by indicating the strategy name.
• Rule Type: Specify the type of rule, in this case, an Entry Rule.
• Trade Direction: Designate it as Long or Short.

In this example, I'm going to create a rule called “Swing Entry Long“.

Since every Rule in NakedMarkets must have a unique name, this naming convention makes sure that there are no duplicates and makes it easy to access and reference Rules later.

Now just to give you another example, if I created an entry rule for a long position based on a Bollinger Bands trading strategy, I might name the rule “BB Entry Long”.

Using the Rule Manager Window for Entry Rules

You'll now have a blank Rule.

Let's take a minute to take a look at the Rule Manager window so you know how to get the tools you need.

Here's how to use each of the areas that I've pointed out with arrows:

• Tabs: Allows you work on different Rule types at the same time.
• Existing Rules: A list of existing Rules that you can drag and drop into the current Rule (if applicable).
• Indicators / Operators: This is a list of all of the criteria that you can use in your Rules, including indicators, account information, operators, actions and more.
• Save Button: Be sure to hit the save button every time you make major changes, so you don't lose your work.

Configuring an Entry Rule for Long Trades

Now let's dive into the core of the Rule setup.

To change the settings in a dark colored box, double click it.

The grayed out boxes require you to drag and drop another Rule or criteria into it. 

This is how to setup this example Rule:

• Order Type: For an instant order entry, double-click the order type at the top and select Instant Order: Buy. This will reduce the number of inputs available because there won't be any pending order criteria.
• Lot Size: The default value is 1% risk per trade, so leave this default value.
• Exit Rule: Leave this blank because it's not needed in this case.

Configuring Stop Loss and Take Profit

The rest of the boxes require you to drag and drop an existing Rule or criteria into it.

For this example, I'll be using the last swing low and high as the stop loss and take profit, respectively.

Defining Stop Loss with Swing Low

For the stop loss, I'll use the last swing low as a reference, which the backtesting software provides with built-in criteria.

Here's a step-by-step guide:

• Go to Price Value under Default Rules in the upper right side of the window.
• Expand the folder by clicking on the “+” symbol next to the folder.
• Drag Last Swing Low into the Stop Loss box.
• Use the default settings and click OK.

Setting Take Profit with Swing High

Similarly to the stop loss, for the take profit, I set it at the last swing high using these steps:

• Go to the Price Value under Default Rules in the upper right side of the window.
• Drag the Last Swing High to the Take Profit box.
• Use the default settings and click OK.

Summary

Here's a summary of the settings:

Once you've configured the rule, save it and move on to the short Rule.

Configuring an Entry Rule for Short Trades

NakedMarkets makes it easy to create a new Rule by cloning an existing Rule and just tweaking a few settings.

So in this example, I'm just going to clone the long Rule and change a few settings.

Here's how to clone the long Rule:

• Find the long Rule on the right side in the User Rules section. You may have to expand the Entry Rules folder.
• Right-click the Rule and select Clone Rule.
• Rename the cloned rule by right-clicking the new Rule (which says Copy at the end) and select Rename Rule. Change the descriptor at the end to Short and click OK to save the new name.

Now you need to change the criteria to define a short entry.

Change the Order Type

First change the order type to sell by double-clicking the order type at the top and set it to Instant Order: Sell.

Defining Stop Loss with Swing High

For the stop loss, I'll use the last swing high.

Do this:

• Go to the Price Value under Default Rules in the upper right side of the window.
• Drag the Last Swing High into the stop loss box.
• Use the default settings and click OK.

Setting Take Profit with Swing Low

Similarly to stop loss, for take profit, I set it at the last swing low as follows:

• Go to the Price Value under Default Rules in the upper right side of the window.
• Drag the Last Swing Low to the stop loss box.
• Use the default settings and click OK.

Save the short Rule and now you're ready to move on to testing.

Summary

Here's a summary of the short settings:

Once you've configured the rule, save it and move on to the short Rule.

Testing the Entry Rules on the Chart

Now it's time to find out if your Rules work as expected.

Do the following to test your Rules:

• Close the Rule Manager and go back to the main NakedMarkets window.
• Start a new backtest by going to: File > New Backtest.
• You can use all of the default settings, but you'll have to select a market that you want to test your Rules in. Any market is fine.
• Once you have a blank chart, click the Play button in the upper right corner of the window to move the chart forward.
• Click on the Pause button at any point.

Here's where you can drag and drop your newly created Rule on the chart.

Expand the Entry Rules folder on the left side of the screen by clicking on the “+” symbol next to it.

Drag one of your Entry Rules onto the chart.

The software will automatically open a new trade because you set this Rule to Instant Order.

You'll also see a new trade pop up on the bottom of your screen under the Open Positions tab.

Check to see that the stop loss and take profit are set correctly.

If they look good, then click the Play button again to move the chart forward.

Price will either hit the stop loss or take profit on each trade.

Test both the long and the short to see if they are working.

It's actually really fun to do this, so feel free to drag and drop several times, just for the heck of it. 

Now if your Rules aren't working properly, go back into Rule Manager and find out what the issue is.

You can do this by simply double-clicking the Rule on the left side of the backtesting screen.

That will open the Rule Manager automatically.

Keep adjusting and testing until it works properly.

If you like what NakedMarkets can do and don't have it yet, you can get a discount here.

Rule Optimization

Obviously, this was just an example.

However, I think you can see how this can really speed up the manual backtesting process.

From here, start experimenting with different parameters:

• Change the stop loss placement
• Change the take profit point
• Experiment with the risk per trade

I'll explain how to create a more complex trading strategy in other tutorials.

But for now, just master Entry Rules.

Conclusion

That's all there is to it!

But this is just the beginning.

Entry Rules are great on their own, but they are even more powerful when used in conjunction with Exit Rules, Core Rules and Setup Rules.

Learning how to use all of the Rule types together will allow you to create partially or fully automated trading strategies.

Keyboard shortcuts will further speed up your order entry.

If you have any questions about NakedMarkets, be sure to contact their team via their forum.

That is the best place to get support.

The post How to Create and Use NakedMarkets Entry Rules appeared first on Trading Heroes.

Let's face it, backtesting is a vital part of becoming a successful trader. 

It allows you to test your trading strategies on historical data to see how they would have performed in the past.

However, backtesting with a simple chart and a spreadsheet to record your trades can be time-consuming and prone to errors.

That's where backtesting software is extremely valuable.

The best backtesting software can save you time and provide more accurate results than spreadsheet backtesting.

With so many options available, it can be overwhelming to choose the right one.

In this article, we'll explore some of the best backtesting software on the market and help you make an informed decision.

There will be options for both automated and manual backtesting, across all major trading markets.

We'll also discuss the importance of backtesting and key features to look for in backtesting software.

Understanding Backtesting

Backtesting is a technique used to evaluate the effectiveness of a trading strategy by applying it to historical data.

This data is important because markets tend to have their own personality and price action that happened in the past is likely to continue to happen in the future.

It's an essential tool for traders looking to verify and optimize their strategies and improve their performance.

If you're new to backtesting, here's a summary of how it works.

The Importance of Historical Data

Historical data is a crucial component of backtesting. It's used to simulate how a trading strategy would have performed in the past.

The more accurate the historical data, the more reliable the backtesting results will be.

So be sure to use the cleanest backtesting data you can afford.

Also find out if a backtesting platform factors in things like the spread, commissions, volume and liquidity.

Key Performance Indicators

Backtesting produces a wide range of performance metrics that can be used to evaluate the effectiveness of a trading strategy.

Some of the most common key performance indicators (KPIs) include:

• Profit and loss (P&L)
• Win rate
• Maximum drawdown
• Sharpe ratio
• Maximum number of losers in a row
• Average monthly return

These metrics can help you identify strengths and weaknesses in your strategy and make adjustments accordingly.

Make sure that your backtesting platform provides these metrics before you buy. 

By understanding the role of historical data and key performance indicators, you can use backtesting to gain valuable insights into your trading strategy and make data-driven decisions.

Top Backtesting Software Platforms

If you're looking for the best backtesting software, you have many options to choose from.

Here are the top backtesting software platforms to consider:

NakedMarkets

NakedMarkets is a fantastic combination of manual and automated backtesting features.

If you want to backtest manually, it performs just like any other manual backtesting platform.

However, if you want to start creating automated or semi-automated trading strategies, you can build them easily with their built-in, no-code module called Rule Manager.

The interface is entirely drag and drop and provides many options.

On top of that, they provide free updated historical data and a Fast Backtest feature that will speed up your backtesting.

To learn more, read my full NakedMarkets review.

• Type of backtesting: Manual, semi-automated, automated
• Markets: Forex, stocks, futures, indexes, metals, crypto

TradingView

TradingView is a cloud-based backtesting software platform that offers a variety of benefits for traders.

The best part is that it's used in a browser, so there's no temperamental software to install.

It allows you to backtest your trading strategies using historical data with their proprietary programming language called PineScript and provides you with detailed reports to help you analyze your performance.

There are also community built trading strategies that you can test with just a few clicks. 

Until recently, my only complaint about TradingView was that they didn't provide enough historical data.

But they recently launched their Deep Backtesting feature that's available on higher priced plans. It gives you full access to all historical data in their database and solves that problem.

You can read my full TradingView Review here.

• Type of backtesting: Automated
• Markets: Most markets are available

Forex Tester

Forex Tester is the very first backtesting software I ever used.

It can do manual backtesting and can also backtest automated MetaTrader Expert Advisors (EAs).

The biggest downside is that it lacks proper analysis features.

Otherwise, it's a solid piece of software.

If you want to learn more, read my complete review here.

• Type of backtesting: Manual, automated
• Markets: FX, stocks, crypto, metals, indexes, futures

Amibroker

AmiBroker is a powerful technical analysis, backtesting and trading software used by traders to analyze financial markets.

Traders can develop and test trading strategies using AmiBroker's proprietary AFL (AmiBroker Formula Language) programming language.

It provides access to historical data from various sources and supports automated trading integration with brokerage platforms.

One cool feature is that you can download historical stock market data from Yahoo Finance for free.

• Type of backtesting: Automated
• Markets: Best for stocks although other markets can be used

NinjaTrader

I've never liked NinjaTrader because it's so clunky.

But it IS a popular trading platform that offers advanced charting, backtesting, and automated trading functionalities.

It allows traders to develop and test trading strategies using historical data and provides a wide range of tools for strategy optimization.

One thing that stands out in NinjaTrader is the ability to do both automated and manual backtesting.

Professional traders do use this software. If you can get used to the interface from 1995, then it's probably a solid platform.

• Type of backtesting: Automated, manual
• Markets: Futures

MetaTrader 4 and 5

Both MT4 and MT5 offer built-in backtesting functionalities that allow traders to test their trading strategies using historical data.

While not as advanced as dedicated backtesting software, MT4 and MT5 are widely used for backtesting.

You can spreadsheet backtest in MT4 and MT5, as shown here, but it is clunky.

These platforms are more built for automated trading strategies called Expert Advisors (EAs) using the MQL4 and MQL5 programming languages.

It's a decent automated backtesting platform…if you know how to code.

• Type of backtesting: Automated, limited manual capabilities
• Markets: Forex, stocks, metals, futures, indexes

ProRealTime

ProRealTime is a comprehensive trading platform offering advanced charting, technical analysis tools, and backtesting capabilities.

It allows traders to develop, test, and optimize trading strategies using historical data.

ProRealTime provides access to a wide range of markets, including stocks, forex, and commodities. Traders can customize indicators, implement automated trading systems, and analyze performance metrics.

The user-friendly interface and robust features make it popular among traders seeking sophisticated analysis and strategy development tools.

• Type of backtesting: Automated
• Markets: Most markets available

cTrader

cTrader is a user-friendly trading platform that features a community of “cBot” builders.

The platform is well designed and easy to use.

It offers advanced charting tools, customizable layouts, and a wide range of order types to cater to diverse trading needs.

Automated trading programs are coded in C# and they have a library of tutorial videos available to get you started with algo trading.

It's popular among traders for its reliability and robust functionality.

• Type of backtesting: Automated
• Markets: Forex and CFDs

StrategyQuant

StrategyQuant is a software platform that allows traders to develop, backtest, and optimize automated trading strategies using a visual strategy builder and genetic algorithm optimizer.

So no coding is necessary to build automated trading strategies.

You can even export your strategies to other platforms like MetaTrader, TradeStation and MultiCharts.

It provides access to historical data and offers advanced backtesting capabilities for testing and refining trading strategies.

• Type of backtesting: Automated
• Markets: Stocks, Forex, Crypto, Commodities, Futures, Indexes

TrendSpider

TrendSpider is part of the next generation of trading and backtesting platforms.

It provides deep analysis of trading markets to come up with new trading ideas.

You can get detailed analysis of your backtesting and run backtests in multiple markets at the same time.

The backtesting platform does not require coding and trade entry and exit commands can be entered in plain English, thanks to the GPT rule builder.

• Type of backtesting: Automated
• Markets: Most markets available

MultiCharts

MultiCharts is a professional trading platform offering advanced charting, backtesting, and automated trading capabilities.

It allows traders to analyze markets, develop trading strategies, and execute trades across multiple asset classes.

MultiCharts supports a wide range of technical indicators, drawing tools, and trading strategies.

The platform provides easier automated trading program development by using PowerLanguage, which is based on TradeStation's EasyLanguage.

I considered getting MultiCharts before I bought Amibroker, but the extra cost didn't seem like it was worth it.

But it might work for you, so check it out.

• Type of backtesting: Automated
• Markets: Most markets available

TradeStation

TradeStation is one of the oldest backtesting platforms on this list. Even though they have been around for awhile, they continue to innovate and keep up with the times.

This platform allows you to backtest your trading strategies and provides you with detailed reports to help you analyze your performance.

You can use their pseudo-coding language called EasyLanguage to create strategies for backtesting and live trading.

They also provide a pre-built library of strategies that you can use as starting points.

The platform is known for its user-friendly interface and extensive educational resources, making it a great choice for both beginner and advanced traders.

• Type of backtesting: Automated
• Markets: Most markets available

QuantConnect

QuantConnect is a cloud-based backtesting software platform that offers a variety of features for traders.

It allows you to backtest your trading strategies and provides you with detailed reports to help you analyze your performance.

With QuantConnect, you can also automate your trades and execute them in real-time.

The platform is known for its advanced algorithmic trading tools and extensive community support, making it a great choice for traders who want to collaborate with others.

• Type of backtesting: Automated
• Markets: US SIP, CME, FX, Crypto

FX Replay

FX Replay is an online manual backtesting solution, which is fantastic because you can do your backtesting in a browser and you don't have to install temperamental native software.

They also use TradingView charts, so they are super smooth and easy to use.

The only issue that I have with this solution is that their tools are super simple.

So if you're just getting started, this might be a good option for you.

It's better than the manual backtesting capabilities of TradingView.

But, if you need something with better analytics and advanced features, this might all a little short.

There are several FX Replay alternatives, if this solution is not for you.

Incorporating Technical Analysis

When it comes to backtesting, understanding technical analysis is essential to ensure that your trading strategies are based on sound principles.

Technical analysis involves using past market data to identify trends and patterns that can help predict future price movements.

Here are some key tools and techniques you can use to incorporate technical analysis into your backtesting process.

Charting Tools

Charting tools are an essential part of technical analysis.

They allow you to visualize market data in a way that makes it easier to identify trends and patterns.

Candlestick charts are a popular charting tool that displays the open, high, low, and close prices of an asset over a specific time period.

Line charts can also be useful for identifying trends over time.

Technical Indicators

Technical indicators are mathematical calculations that use market data to identify trends and patterns.

They can be used to confirm or contradict other signals you see in the market.

Some popular technical indicators include Moving Averages, Relative Strength Index (RSI), and the Stochastic Oscillator.

Trend Analysis

Trend analysis involves identifying the direction of the market and using that information to make trading decisions.

Trendlines and moving averages are a common tools used to identify trends.

By using charting tools, technical indicators, and trend analysis, you can develop a trading strategy that is based on sound principles and has a higher probability of success.

Software Features for Different Trader Levels

When it comes to backtesting software, different traders have different needs and preferences.

Some traders might be beginners who are just starting out, while others might be experienced traders looking for advanced features.

Institutions, on the other hand, might need software that can handle large amounts of data and complex strategies.

Here are some software features that cater to different trader levels:

For Beginners

If you're new to backtesting, you'll want software that is user-friendly and easy to navigate.

Look for software that has a simple interface and allows you to import data easily.

You might also want software that has pre-built strategies that you can test out without having to create your own.

Some backtesting software for beginners includes NakedMarkets, TradingView and Forex Tester.

For Experienced Traders

If you're an experienced trader, you'll want software that has more advanced features and can handle algorithmic trading.

Look for software that allows you to code your own strategies and backtest them.

You might also want software that has AI and machine learning capabilities.

Some backtesting software for experienced traders includes Amibroker, which allows you to code your own strategies in a variety of programming languages, NakedMarkets and TradeStation.

For Institutions

If you're an institution, you'll want software that can handle large amounts of data and complex strategies.

Look for software that can handle multiple users and has robust security features. You also want software that has a dedicated support team.

Some backtesting software for institutions includes MATLAB, which can handle large datasets and has advanced analytics capabilities, and TradeStation, which has a dedicated support team and can handle multiple users.

Overall, when choosing backtesting software, it's important to consider your level of experience and the features you need.

Whether you're a beginner or an institution, there is software available that can cater to your needs.

Optimization and Real-Time Testing

The best backtesting software goes beyond just historical analysis.

It offers optimization and real-time testing capabilities that help you improve your trading strategies.

Strategy Optimization

Optimization is a powerful tool that helps you fine-tune your trading strategy by testing different parameters and variables.

With backtesting software, you can easily run optimization tests to find the best combination of parameters that maximize your profit and minimize your risk.

Most backtesting software offers a variety of optimization methods, including brute force, genetic algorithms, and AI based logic.

These methods allow you to test a large number of variables and find the optimal parameters for your trading strategy quickly.

Live Market Testing

Real-time testing is another critical feature of backtesting software.

It allows you to test your trading strategy in live market conditions before risking real money.

With real-time testing (also known as forward testing), you can see how your strategy performs under current market conditions and potentially adjust it accordingly.

Backtesting software with real-time testing capabilities offers a range of features, including live data feeds, order execution, and broker integration.

These features allow you to simulate live trading conditions and test your strategy in a risk-free environment.

Conclusion

Picking the best backtesting software for your situation and the markets you trade is the first step to becoming a successful trader.

The right software will help you verify and optimize your trading strategies efficiently.

You don't have to buy the most expensive software either. Start with the best you can afford right now and go from there.

That might be all you ever need.

The post Best Backtesting Software: Top Tools for Analyzing Trading Strategies appeared first on Trading Heroes.

Using keyboard shortcuts is one of the many ways that NakedMarkets can help you speed up the backtesting process and find profitable trading strategies faster.

In this guide, I'll show you the most useful keyboard shortcuts I use and how to customize NakedMarkets backtesting software to your needs.

Benefits of Using NakedMarkets Keyboard Shortcuts (Hot Keys)

Keyboard shortcuts are also known as Hot Keys in NakedMarkets.

They allow you to setup keyboard shortcuts that are close together, so you can use access frequently used functions quickly, while you're backtesting.

Gamers use keyboard shortcuts a lot when they play video games, to gain an advantage over other players.

Windows and macOS have a ton of keyboard shortcuts to speed up what you do on your computer. I use them all the time and they are super useful. This is not a Windows tutorial, but this next video simply shows you the power of keyboard shortcuts.

You might even learn a few shortcuts that can be helpful while trading.

So in a similar way, using Hot Keys in NakedMarkets will help you speed up your backtesting because you can easily hit one key and execute a complex function.

As you'll see in this tutorial, you can actually do some really powerful things when you combine Hot Keys with Rules in NakedMarkets.

You can close trades, execute default trades and more.

Now that you know why you should use Hot Keys, let's get into how to set them up.

How to Change Your Keyboard Shortcuts

First, go to the menu at the top of the screen and select: Options > Settings…

From there, you will the the User Settings screen. Make sure that the Hot Keys tab is selected.

The Action that the Hot Key executes is on the left and the Hot Key on the keyboard is on the right.

To change the Hot Key for an Action, double click on the existing Hot Key shortcut. The text will disappear and “[Enter the key]” will appear.

From here, simply hit the key or key combination on your keyboard that you want to use as the shortcut for that Action.

You can use combinations like “Control + _____” as a Hot Key. I personally find this clunky, so I prefer to use single key shortcuts whenever possible.

Once you hit the keys on your keyboard, the new Hot Key will show up on the screen.

Now that you know how to set shortcuts, let's take a look at what you can do with these shortcuts.

Simple Shortcuts

Here's the complete list of Actions that you can create shortcuts for:

• Testing
  • Pause/Resume testing
  • Step back testing
  • Step forward testing
• Chart options
  • Zoom in
  • Zoom out
  • End of chart
  • Lines mode
  • Bars mode
  • Candles mode
  • Upper timeframe
  • Lower timeframe
• Graph objects 
  • Horizontal line graph object
  • Vertical line graph object
  • Trend line graph object
  • Segment line graph object
  • Rectangle graph object
  • Ellipse graph object
  • Triangle graph object
  • Fibonacci graph object
  • Text label graph object
  • Risk/Reward tool
  • Thumbs up graph object
  • Thumbs down graph object
  • Arrow up graph object
  • Arrow down graph object
  • Stop sign graph object
  • Check sign graph object
  • Delete selected graph object
  • Delete all graph objects
  • Show/Hide closed orders on chart
• Trading
  • New buy limit order
  • New sell limit order
  • New buy stop order
  • New sell stop order
  • New instant buy order
  • New instant sell order
  • Modify latest opened instant order
  • Duplicate latest opened instant order
  • Close latest opened instant order
  • Modify latest created pending order
  • Duplicate latest created pending order
  • Close latest created pending order
  • Close all instant orders
  • Close all pending orders
  • Close all pending stop orders
  • Close all pending limit orders
  • Close all orders
• Rules Management 
  • Use default buy entry rule
  • Use default sell entry rule
  • Detach all rules
• Windows
  • New backtest
  • Open backtest
  • Save backtest
  • Save backtest as…
  • Restart backtest
  • Reload backtest
  • Close backtest
  • Open statistic center
  • Open rule manager
  • Take screenshot

So as you can see, there is a wide range of things that you can do with Hot Keys.

Advanced Shortcuts

All of the above is pretty standard stuff.

But where NakedMarkets really shines is the ability to use a Rule as your default entry.

So whenever you use a Hot Key to enter one of the following entries…

• Use default buy entry rule
• Use default sell entry rule

…you can enter a fairly complex set of entry instructions.

These instructions would normally take a few seconds and a few mouse clicks to setup, but with Default Rules, this happens instantly.

So on the Rules tab above, you can choose the default rule that you want to use. You can use a separate rules for buys and sells.

For example, let's say that you want to create a rule that sets a sell stop entry below the current candle and a stop loss above it. On top of that, you want to set the take profit of the trade to 2R or 2X risk.

This is what it would look like on a chart. The green line is the sell entry stop and the red line is the stop loss.

The green area in the box shows the take profit.

If you had to setup this rule every time you entered a backtesting trade, it would take forever.

But with NakedMarkets, you can setup an Entry Rule like this.

So this rule will setup the trade as explained above, and it will take 1% risk per trade, and the pending sell stop order will expire after 3 candles.

Pretty cool, right?

Every time you hit the Hot Key for the default sell rule, this trade will automatically be placed.

Obviously, this will save a ton of time and you can finish your backtesting faster.

Learn more about how NakedMarkets Rules work in this video.

My Favorite Keyboard Shortcuts

Alright, let's get into what I use when I backtest.

I use my mouse with my right hand, so I program all of my shortcut keys for my left hand.

The “base” keys for me are A, S and D.

• S = Play/pause
• D =Move 1 candle forward
• A = Move 1 candle back

All of the other keys are selected around these keys, for easy access.

The other key I use most is “X” and I program that to “close all orders.” This closes all open and pending orders.

Beyond that, I'll program more shortcut keys, depending on the trading strategy I'm testing.

But all of the additional keys I use will be easily accessible from my base keys.

Now It's Your Turn

Once you know how to create keyboard shortcuts, now it's time for you to create shortcuts that make sense to you!

Remember, there are no right or wrong answers here.

Figure out what you like to use. 

You'll probably have to go through a few versions of your keyboard shortcuts, but that's OK. Keep refining your process until you have the perfect setup.

Conclusion

Keyboard shortcuts are just one of the many ways that NakedMarkets backtesting software is awesome.

It has features that I haven't found in any other backtesting software package on the market.

The best part is that you can test fully manually, partially automated and fully automated strategies…and you don't need to know how to program. Everything is “no-code” and the software features a drag and drop interface.

Never trust what others say about a trading strategy.

Always test it for yourself.

Learn more about NakedMarkets in these tutorials.

The post How to Setup NakedMarkets Keyboard Shortcuts (Best Settings) appeared first on Trading Heroes.

Forex Tester has been the best manual backtesting software solution for a long time. I started using it around 2008.

I've kept my eyes out for alternatives, but nothing came close.

Then NakedMarkets was launched in 2022, and I instantly knew that it was a competitor. But how good is it, and more importantly, is it better than Forex Tester?

Both software programs help you speed up the manual backtesting process and make it easy to test almost any trading strategy in stocks, Forex, futures, cryptocurrencies, and more.

After spending several months backtesting with NakedMarkets, I'm finally ready to give you a complete comparison of the two.

I'll show you which ONE is better and why. 

Ease of Use

Is the software designed in a way that makes it intuitive and so I don't have to learn new syntax or processes?

Both software are patterned after MetaTrader, so I would say that they are very similar when it comes to ease of use.

There are a couple of small differences however.

In version 5 of Forex Tester, they decided to move to a “ribbon” type menu at the top of the screen. If you've used Microsoft Office, you know what I mean.

This is what the menu looks like.

I'm not a fan of this.

It makes the menu bar bigger, and since each button is bigger, I have to flip through more menus to get to the functions I want to use.

In addition, the menus in Forex Tester 5 could be more useful. For example, the right-click menu on the charts don't have any options for trading.

Since there are already trading options on the primary ribbon toolbar, some might think that additional options on the right-click menu are redundant.

I disagree.

I feel that there should be some trading options on the right-click menu and the options for volume, grid, etc. should go on the Chart Settings menu.

On the other hand, the NakedMarkets menus are very well thought out and streamlined.

The buttons are small, so they don't take up a lot of space, and there are only the buttons that I use most often.

Creating a minimalist menu is actually more difficult than you may think. It's much easier to stuff it full of functions and let the users sort it out.

The right-click menu is much more practical than the one in Forex Tester.

What I like about this menu is that there are actual buy and sell order options.

There are many other ways that NakedMarkets is easier to use than Forex Tester 5…too many to go into here.

But there is one more function that makes NakedMarkets better than Forex Tester in this category.

This is the Rules Manager function in NakedMarkets. It's actually brilliant, I would have never thought of this.

It allows you to build pieces of your trading strategy so you can automate them and speed up the backtesting process. More on this feature later in this article.

NakedMarkets also recently launched a TradingView-like interface for their charts. I don't use it, but some traders love it.

It's just a personal preference. I'm happy that there is an option though.

TradingView has a great interface. Too bad it's not good for backtesting.

So even though Forex Tester 5 is easy to use, I have to give it a slightly lower score because of the ribbon menu and because the Rules in NakedMarkets really speed up the backtesting process.

Here are the scores for this category:

• Forex Tester: 4
• NakedMarkets: 5

Total Cost of Ownership

Cost of ownership may seem like a straight forward calculation, but it's not.

Here's why…

There are 3 parts to backtesting software ownership:

• Initial cost
• Historical data updates
• Additional feature add-ons

Everyone understands the initial cost.

This is the amount that you pay to unlock the full version of the software.

As this is being written, the regular price for Forex Tester is $299. However, they have a lot of sales and you can get it for $149.

On the other hand, NakedMarkets costs $269 up front, but you can get a $20 discount here, for a total of $249.

Before you jump on Forex Tester though, you also have to take into account the data plan and add-ons. 

The Forex Tester data plan costs $49.99 per month to get the latest updated data.

Now you could use the free plan, but there is a very limited amount of data available. So if you want to do any serious backtesting, you'll have to get the paid plan.

One thing you can do is order one month, download the data, then cancel your subscription. Then wait a few months, subscribe again for a month, then cancel.

Obviously, this solution is not ideal because you won't have the most updated data available. But it might be enough if you only backtest higher timeframes trading strategies.

The best solution is to purchase Forex Tester's lifetime data package so you never have to pay for data again. This package currently costs $539, on sale.

With NakedMarkets, you get updated historical data at no additional cost. So you only pay $249 (with the discount coupon), with no additional costs.

So when you compare apples to apples, you save $290 by purchasing NakedMarkets.  

Remember, pricing can change, so be sure to double check the prices before buying. 

Both are reasonably priced, but you do save a decent amount of money with NakedMarkets, so I'm giving NakedMarkets a slightly higher score.

Here are the scores for this category:

• Forex Tester: 4
• NakedMarkets: 5

Speeds up Backtesting

The next thing that I wanted to find out is how much each of the software packages can speed up the overall backtesting process.

Speed is relative. So what's the slowest method of manual backtesting?

Well, that would be manual backtesting with MetaTrader (and a spreadsheet), or using a notebook to do “paper trading.”

Both of these methods are very slow.

So one of the biggest benefits of using Forex Tester or NakedMarkets is that they speed up the process considerably.

But which one makes the process faster?

When it comes to basic backtesting, both software solutions are about the same.

However, when you start using the NakedMarkets Rule Manager, that's when you really start cooking with gas.

Rules in NakedMarkets allow you to automatically identify trade setups, entries and exits. It can also enter and exit trades and use set your risk management.

You can learn more about Rules in this video.

So while Forex Tester 5 is a solid solution, NakedMarkets provides another “gear” with their Rule Manager, which allows you to backtest much faster.

Here are the scores for this category:

• Forex Tester: 3
• NakedMarkets: 5

Data (Cost, Quality and Availability)

Up to date date is very important for backtesting because you want to see if your strategy is still working in current market conditions.

The biggest difference between the two products is that updated data in NakedMarkets is included, while you have to pay extra for it in Forex Tester. 

Otherwise, the data solutions are very similar.

In both cases, there could be more data available and some markets have spotty data. That probably isn't the fault of the software companies, it's most likely a function of the data feeds they are using.

But overall, both products provide solid data feeds. 

I'm giving NakedMarkets a slightly higher score because the data is included with the purchase of the software. 

Here are the scores for this category:

• Forex Tester: 3
• NakedMarkets: 4

Overall Stability

Let's face it, backtesting software is complex.

When I first started using Forex Tester around 2008, the program crashed often and it was buggy. Activating my license was a clunky process and I had to contact support if I wanted to change computers.

But that's how almost all software is at the beginning, and at the end of the day, it worked well enough to get in a solid backtest and develop trading strategies.

Over the years, it has evolved into a very stable product and now I hardly have any issues with it.

NakedMarkets launched in 2022 and the benefit of the software was obvious, after using it for a week. But since it's complex and very new, there are still a few bugs that they have to work out.

However, NakedMarkets has been really good at fixing bugs as they are reported. They also do frequent updates and are constantly improving the software.

Although NakedMarkets is improving quickly, I have to give Forex Tester a big edge on stability at this time.

Here are the scores for this category:

• Forex Tester 5: 5
• NakedMarkets: 3

Reporting

This is where there is a HUGE difference between the two products.

Huge is an understatement…they aren't even in the same galaxy.

The whole point of backtesting is to get stats on your trading strategy, so you know what to expect when you start trading it live. 

Therefore, analytics are extremely important. 

I've told Forex Tester in the past that they really need better reporting.

But unfortunately, they still have the same trading report that they've had since version 2.

As you can see, this report only shows balance, equity, margin and drawdown. There isn't a lot of data on this chart, but just look at the legend to see what the report is showing.

…and that's it!

Serious. 

To get a more detailed report, I always had to export the data to Excel and spend a lot of time “massaging” it to get the stats that I wanted.

Enter NakedMarkets…

Now that's more like it!

I get way more valuable information out of NakedMarkets.

…and that's just one tab on the report.

The other tabs are:

• Overall stats
• Symbols analysis
• Timing analysis
• Risk analysis
• Trades list
• Monte Carlo

To see a more detailed analysis of the reporting feature, read this article.

An added benefit is that you can also import reports from Forex Tester, Oanda and MetaTrader into NakedMarkets, and get detailed analytics, without going through the headache of exporting to Excel. 

It's a night and day different between the two software packages.

Here are the scores for this category:

• Forex Tester: 1
• NakedMarkets: 5

Automation

Next, I'll cover the amount of automation in each program.

Automation can dramatically speed up the backtesting process and any worthwhile software should have some sort of automation option.

Forex Tester 5 does allow you to backtest MetaTrader EAs, but that's all of the automation they have available.

Realistically, you can backtest MetaTrader EAs in MetaTrader, without paying additional money for Forex Tester. So that function in Forex Tester is useless. 

To be fair, Forex Tester does have their own proprietary “AI” function that supposedly optimizes your EA settings automatically. I haven't tried it and that could be useful. The downside is that it costs extra.

But again, you could simply setup a similar test in MetaTrader and it will run through all of the settings iterations that you give it. So again, including this in Forex Tester is not very helpful.

As I mentioned in previous sections, NakedMarkets has come up with an ingenious way to automate parts of the backtesting process.

On top of that, if all parts of your trading strategy can be automated, you can do a fully automated backtest.

But wait, it gets even better…

You can also backtest your fully automated trading strategy on multiple markets and multiple timeframes at the same time, with the Fast Backtest function in NakedMarkets.

So I think the winner here is obvious. NakedMarkets stands head and shoulders above Forex Tester 5 in the automation department.

Here are the scores for this category:

• Forex Tester: 1
• NakedMarkets: 5

Add Custom Indicators

I'm not a huge fan of custom indicators, but you might be.

So I'm going to go over how easy it is to import or create custom indicators for each of the software solutions.

Forex Tester 5 has an import function that will allow you to import MetaTrader indicators, if you have the source code. I've tried this function and it only works about half the time. 

Therefore, you might be able to get your custom indicator into Forex Tester, but you cannot add all custom indicators.

Now what about creating indicators from scratch?

I've tried to code my own indicators for Forex Tester in the past, but it's actually really difficult. Mostly because they don't have any documentation on it.

In order to get custom indicators, I had to hire a programmer who could do it. Luckily, I got a good programmer, but he was hard to find.

See the indicators he created here.

On the other hand, NakedMarkets doesn't have an import feature in the software, but they are working on it. 

In the meantime, you can actually ask them to do the conversion and they will help you as best they can.

They also have documentation on how to code your own custom indicators. There aren't many tutorials there yet, but all of their default indicators are open source, so you can see how they are coded and customize them to fit your needs.

C# and Visual Basic are used for coding NakedMarkets custom indicators, which is great because these programming languages are easy to learn. You can download a free software development package online (there are several options) and start coding in these languages.

If you don't want to code it yourself, you can easily find a programmer to do it for you because these are common programming languages.

So overall, I have to give NakedMarkets the edge here. Once they get their import feature online, their score will probably increase to a 5. 

Here are the scores for this category:

• Forex Tester: 3
• NakedMarkets: 4

Build Custom EAs

This is a big one for many traders. Their dream is to build an automated trading robot, or Expert Advisor (EA), so they can make money while they sleep.

So how easily do these solutions help you to do that?

Let's start with Forex Tester 5. They have created an external website that helps you build EAs with a no-coding, and a drag and drop interface.

Once you've built a EA on the website, you can export it to MT4, MT5, or Forex Tester formats.

Sounds good in theory.

The reality is that you can't build a usable EA on their website. The interface is too rudimentary and it's hard to build even the simplest trading system.

On top of that, you have to pay money to use their website.

It's a pretty big fail.

NakedMarkets, on the other hand, has the functionality to build an automated trading strategy built in to their software.

Use the Rule Manager and you can build partially automated or fully automated strategies. The Rule Manager is also a no-code solution, so you don't need advanced programming skills.

No external websites or additional fees necessary.

The only downside to NakedMarkets is that you cannot export the strategy to MetaTrader format. But they are working on that and will hopefully have a solution soon.

On the upside however, once you've created an automated strategy in NakedMarkets, it's easy to hire a programmer to convert it into a MetaTrader EA.

Here are the scores for this category:

• Forex Tester: 1
• NakedMarkets: 4

Support

Support is very important, especially with complex backtesting software. 

There are basically 2 types of support:

1. Day-to-day support: How quickly do they answer emails and are they helpful?
2. Long-term software support: Do they listen to feedback and improve the software with each new version?

I've found that both companies do a great job with day-to-day support.

No complaints there.

However, NakedMarkets has a huge edge when it comes to long-term product support. 

There are some features that I've been wanting to see in Forex Tester (like professional-level reporting) for a long time.

But they haven't really upgraded the product since version 2. It's still basically the same program. It's more stable and has a few more bells and whistles, but it's still very basic.

On the other hand, NakedMarkets has been fantastic about fixing bugs and adding requested features.

I leave a post on their forum and they usually get back to me within a few days, with a solution.

They are very good about adding suggested upgrades to the software and fixing bugs quickly. 

The most recent addition they have made is the implementation of a TradingView-like interface. So now traders can choose between a MetaTrader-like experience or TradingView controls.

They have also added a few features for me, which I greatly appreciate.

So in terms of overall support, NakedMarkets is much better.

Here are the scores for this category:

• Forex Tester: 3
• NakedMarkets: 5

Review Video

Watch the complete video review below.

I show you some of the differences in action and why I gave the scores I did.

Final Score

Now let's add up all of the scores and find out which software package is the winner…

As you've probably already guessed, NakedMarkets comes out way ahead of Forex Tester by a margin of 17 points.

• Forex Tester 5: 28 points
• NakedMarkets: 45 points

Forex Tester had the first mover advantage, but they have rested on their laurels and are now going to have to play catch up to NakedMarkets.

Like I mentioned before, Forex Tester hasn't really changed much since version 2, it just became more stable.

Many of the upgrades that they have added over the years have had questionable utility and I've always had the distinct impression that the product was being designed by programmers…not traders.

On the other hand, I personally know the creator of NakedMarkets and I know that he's a legit trader too. That's why he has added features to the software that are actually useful to traders.

There are many benefits to NakedMarkets, but what I like best is its ability to backtest fully manual, partially automated and fully automated trading strategies. It will only get better with time.

Get NakedMarkets here.

If you want to see a trading strategy that I developed with NakedMarkets, go here.

The post Forex Tester 5 vs NakedMarkets: Here’s the Winner appeared first on Trading Heroes.

Before computers were a thing, traders used to draw their charts by hand. Munehisa Homma is famous for using Japanese Candlesticks to backtest and successfully trade what many consider the first futures market in the world, the Dojima Rice Exchange of Osaka.

Fast forward to today, and manual backtesting is still one of the best ways to learn how to trade, and computers have allowed us to speed up the process.

In this post, I'll show you why manual backtesting is so useful, what to look for in the best manual Forex backtesting software, and my top 3 picks for the best software available right now.

Why Manual Backtesting Software is an Essential Trading Tool

Many new traders think that backtesting software is only for automated trading strategies.

Nothing could be further from the truth.

Manual backtesting software is a vital tool for the manual/discretionary trader. I also firmly believe that manual backtesting is the best place for most people to start, when building automated strategies. 

There are some trading rules that cannot be easily programmed into a computer.

So if you start with manual backtesting, you can develop any type of trading strategy.

With a fully automated trading strategy, you're limited by the capabilities of the programming language or platform.

When you find a strategy that's profitable in manual testing, then you can figure out ways to automate parts of the strategy. Sometimes it's even possible to automate the whole thing.

…or maybe you just want to stick to manual trading.

That's great too.

The key is that you have a choice, when you start developing with manual backtesting software.

Manual backtesting also allows you to get to know a trading strategy very well. 

Like going on a date with the same person many times, you really get to know the quirks, strengths and annoying things about a trading system.

When you do automated backtesting, it can be very easy to miss these things because you don't see the result of every trade. You start the test, let it run, then you check the results.

Finally, manual backtesting can be used as a simulator to help you practice an existing trading strategy.

This is similar to how pilots practice flying in a flight simulator.

Just because you have a trading strategy that already works, does not mean that you can just sit back and relax.

Professional basketball players practice free throws all the time. It's a seemingly routine skill, but if they don't practice, they will get worse.

If you don't practice, you'll start to lose your edge too.

Now that you understand the benefits of manual backtesting software, let's look at the components of a great software package.

What to Look for in Manual Forex Backtesting Software

These are the criteria that I used to pick the backtesting software I recommend.

• Ease of use
• Cost
• Historical data
• Analytics

Figure out which features matter the most to you and choose accordingly.

Ease of Use

The first feature I look for is how easy is it to use.

Most software packages work in a similar way. They look like trading platforms and act like trading platforms.

Once in awhile, some software developers try to get too creative and things get weird. But for the most part, most software will look similar and is usually easy to use.

But keep an eye out for for features that streamline the backtesting process.

Manually entering trades is tedious. Any functions that speeds up this process is worth its weight in gold.

The Cost of Manual Forex Backtesting Software

This is a consideration for many traders, so I've chosen software that's affordable, but still has the features that you would need to do a professional backtest.

The price of manual Forex backtesting software starts at about $100 and can cost as much as $500. This is just for the software itself. 

High quality historical data can cost anywhere from a few hundred dollars per market, to a few thousand dollars. Data subscription plans generally start at about $30 per month.

So it's very important to figure out what kind of data a software package includes, before buying it. 

You could be in for a surprise, if there's little to no data available in a software package and you have to pay a lot more to get the data you need to test.

Data Available

That brings us to historical data.

Companies take different approaches to providing data. Some are generous, while others will charge you for every option.

Each approach has its benefits and downsides.

Services that cost more will generally have more data points and provide cleaner data. Their data is also usually more up to date. 

If you need the best data then this is the way to go.

This is especially true if you're backtesting strategies on lower timeframes. The quality of the data matters much more because there is less margin for error.

Cheaper data will usually have fewer timeframes available and the data might not be as recent. But this is a great option if you're only backtesting higher timeframes like the daily chart or the 4 -hour. 

Again, figure out what you need.

The most expensive option is not always the best.

Analytics

This is the biggest weakness in most of the backtesting products I've used.

There was a web app back in the day called Tradingrex which got me really excited because they provided legit reporting, basically for free. Unfortunately, they weren't able to make any money and folded.

But it's really hard to find detailed analytics in manual backtesting software. Pretty much all software will give you win/loss percentage, win/loss ratio, max drawdown and number of winning/losing trade in a row.

The bare bones stuff.

However, there are some metrics that can lead to big breakthroughs in the development of a strategy.

Things like MFE/MAE, Monte Carlo Simulations and monthly/yearly performance breakdowns are simply not available in most manual backtesting packages.

So if you can find a software package with excellent analytics, that is usually going to be the differentiating factor.

My Picks for the Best Forex Backtesting Software

Here are my picks for the top 3 best software packages on the market.

I'll give you the pros and cons of each, so you can make an informed decision.

Hint: My #1 pick is at the bottom.

3. Soft4FX

I'll just come out and say it…

If you're on a very tight budget, then Soft4FX is a good place to start.

Otherwise, you're better off with the other options on this list.

However, I think it's fantastic that a product like this exists, because it gives traders options. It also creates competition, which usually makes all products in the space better.

There are also a couple of really good reasons to use Soft4FX as a secondary backtesting option.

Pros

• Add-on to MetaTrader 4 and 5
• The ability to upload your own historical data
• Very affordable price
• Can be used with 2 MetaTrader accounts and can be transferred
• Pay once, no ongoing fees
• Free data from 1 source

Cons

• Clunky interface
• Only 1 data source available in the software, you have to upload other sources
• Minimal reporting and analytics available
• Only available for Windows
• Have to export data into Excel to get advanced analytics

Final Thoughts on Soft4FX

Realistically, if you're short on cash, it's probably better to wait for Forex Tester to have a sale. The sale price of Forex Tester is only a few dollars more than the regular price of Soft4FX.

However, if you really like using MetaTrader and you think that the features in Soft4FX are good enough, then it's a good option.

It can also be great as a secondary backtesting tool. Maybe you have a second laptop or Windows tablet that you travel with and you simply want to be able to play around with some ideas while you're on the road.

Soft4FX is a great option and you won't have to pay more for a license from one of the more expensive providers. You could even install it on 2 secondary computers, since it comes with 2 licenses.

2. Forex Tester

This has been the industry standard for many years, so you cannot go wrong with using Forex Tester.

However, there are several lingering shortcomings that they have not addressed over the years.

With new competitors coming out, these gaps have become even more glaring, dropping Forex Tester to my #2 pick.

Pros

• Easy to use, similar to most broker trading platforms
• Excellent support, they always return emails quickly
• Common indicators are built in
• Multiple data sources available on paid plan, updated frequently
• Can upload your own historical data
• Backtest on multiple charts at the same time
• Support for automated backtesting, similar to MetaTrader
• Free trial version
• Easy to transfer license between computers
• Neural automated backtesting optimizers, I haven't used them, so I cannot comment on how well they work

Cons

• Difficult to get custom EAs and indicators created
• It's always seemed like the developers are not traders, they aren't good at creating trader-friendly features.
• Reporting and analytics are very limited
• The historical data subscription can increase the cost significantly
• Very limited historical data available with the free data plan
• Only available for Windows, does not work well on Virtual Machines (VMs)
• Can get slow when adding just a couple of indicators to the chart
• Have to export data into Excel to get advanced analytics
• The trading education modules aren't useful
• Automated backtesting functions are similar to MetaTrader, nothing new or improved

Final Thoughts on Forex Tester

I have a love/hate relationship with Forex Tester. I've heard this sentiment echoed by many professional traders over the years.

On one hand, the core set of features is really good. They have been the best manual Forex backtesting option for a long time.

When it goes on sale, it's also very affordable.

But as you can see in the list above, there are also a lot of downsides.

To me, the most disappointing thing is that the developer's approach to the evolution of Forex Tester has been iterative. I've always seen a ton of potential with Forex Tester, but they haven't been able to cash in on what's possible.

The software gets slightly better with every new version, but it never has any quantum leaps.

It's like what Microsoft does.

Microsoft is content to make a slightly better version of their products every year. If we're all being honest, Windows 11 is only slightly better than Windows XP.

All things considered, Forex Tester is still a great option. 

But there's something that I like better…

1. NakedMarkets

This is a new entry to the manual Forex backtesting software market and I really like it.

I like it so much that it's my pick for the best Forex backtesting software available right now.

The primary reason that I like it so much is because it has features that are useful to real traders. The workflow of the software is intuitive and streamlines the trading strategy development process. 

Many times, software solutions are built by developers, not traders. So there are features that may seem useful from an outsider's perspective.

But a real trader wouldn't use them.

What impressed me is that NakedMarkets has manual backtesting solutions that are better than anything I could have ever thought of. Keep in mind, I've been trading since 2007…so I had a really good picture of what I wanted to use.

For example, the idea of Trading Rules in NakedMarkets is fantastic. They are basically building blocks that you can use to speed up manual backtesting, or build up to fully automated strategies.

Just drag and drop them on the chart and they can set your stop loss, take profit, trailing stop and more. This feature alone can save you hours of backtesting time.

But that's just the beginning. You can use multiple Trading Rules to build a manual system, or combine them to create a partially or fully automated trading strategy.

The visual Rule Manager also has more features than similar “no-code” building tools out there.

Pros

• Easy to use, similar to most broker trading platforms
• Excellent support, they answer quickly
• Common indicators are built in
• FREE high quality data from multiple brokers 
• Advanced reports and analytics for NakedMarkets, MetaTrader, Forex Tester and Oanda (via Oanda API)
• Community where you can request features and share trading strategies to test
• Drag and drop trading rules for entries, exits and trade management
• Create trading rules without coding
• Designed and developed by a full-time Forex trader
• Free trial version

Cons

• This is still the first version of the software, so there are still small kinks to be worked out
• Only available for Windows, I haven't tested it on a Virtual Machine (VM)
• Since the rules tool is visual, there might be some limitations on the complexity of the rules you can create

Final Thoughts on NakedMarkets

Although NakedMarkets is new, I love the direction that they are taking.

It's a fresh take on manual backtesting and in my opinion, a quantum leap in streamlining the process.

Backtesting can be boring…you have to enter the same orders over and over.

But if you can automate some parts of the process with Rules, then it can make the process more bearable.

It might even make it fun.

You can learn more about NakedMarkets and get a discount here.

Conclusion

So that's my current pick for the best software for manual Forex backtesting.

Sure, you could use MetaTrader or TradingView for manual backtesting. But they are not built for that and you would have to use a spreadsheet to record your trades.

That's really clunky and takes a long time. The software mentioned above makes the process much easier.

I'll have more tutorials and updates using NakedMarkets in the future. Be sure to sign up for the email list to get future updates.

What's your favorite software? Got questions? Let us know on Twitter.

To see all of our recommended products, go here.

The post Best Forex Backtesting Software Reviewed appeared first on Trading Heroes.

In This Episode:

• Why this trader created his own backtesting software
• Where he learned to trade and the timeframes he trades on
• The website where he shares some of his trading strategies and track record
• How to create drag-n-drop entries and exits WITHOUT coding
• Manual backtesting demo and how his software speeds up the process
• Demonstration of creating and testing automated strategies
• Free historical data from multiple brokers
• How this software could easily replace your trading journal
• And more!

There's a big difference between software that's created by someone who trades and someone who doesn't. This is one example.

I met Denis at The Truth About FX conference in 2017. At the time, he was trading full-time and providing trading signals.

I talked to him a bit on the train ride back from central London.

In talking to him, I found out that he is Beta Trader. It's always cool to meet people behind trading sites. I didn't keep in touch with him after that.

Then a few months ago, I got a message from him via Walter's forum, asking me if I wanted to test his new software called NakedMarkets.

I'm always open to testing software from people I know, so I volunteered to be a tester. We are both students of Walter.

As soon as I read through the documentation, I knew that he had something special.

There are features that I haven't seen in backtesting software under $500, and some features that I haven't seen anywhere.

What I like most about his software is that it is very modular.

So you can create small components, like entry and exit rules. Then you can simply drag and drop those rules on your chart to speed up manual backtesting.

Or you can use those components to build fully automated or semi-automated trading strategies.

One thing that I've been looking for is an easy way to automatically download trades from Oanda and analyze the performance of the account. I thought that a trading journal was the solution.

But I asked Denis if it was possible to do it in NakedMarkets and he implemented it in just a few days.

Amazing!

So NakedMarkets can also be used to analyze live trading performance.

Anyway, there's nothing like seeing the software in action. So watch the video find out more about Denis and how the software works.

You can get a special Trading Heroes discount on NakedMarkets on this page.

Click Play to Watch the Episode

Resources Mentioned

• NakedMarkets backtesting software
• Walter Peters
• NakedMarkets Forum
• The Truth About FX Conference

Other Ways To Get The Trading Lifestyle Podcast

• Click here to subscribe via iTunes (if you like it, a five-star review is greatly appreciated)
• Click here to subscribe via RSS (non-iTunes feed)
• Click here to hear all of the other podcast episodes

Thanks for Listening!

I really appreciate you joining me for this episode of the podcast!

If you know of a trader who would benefit from any of the information in this post, feel free to share it with them.

Be sure to subscribe to the show on iTunes or YouTube and if you love it, a 5-star review is greatly appreciated!

The post Taking Backtesting Software to the Next Level: NakedMarkets // EP30 appeared first on Trading Heroes.

I'm been using Forex Tester for a long time. But there were a couple of versions that I didn't recommend because they had some serious bugs. So will Forex Tester 5 be a zero or a hero?

My testing has shown that Forex Tester 5 works well and does have some useful upgrades. The upgrades are incremental, but given that the cost is the same, I feel that version 5 is worth the money.

Keep scrolling to get the details.

Watch the video or get the text version below the video.

Where Can I Backtest Forex Trading Strategies?

This is the question that led me to Forex Tester (FT) many years ago. Since then, many different backtesting solutions have come to market.

I tested them in this video to see how Forex Tester compared. FT was the winner of that shootout, but I found that one of the other software packages did have some legitimate benefits.

However, at the end of the day, if you want the very best backtesting software publicly available right now, FT is the way to go. 

Now let's get into why I believe that.

Simplified Menu

The biggest cosmetic change in Forex Tester 5 is the menu at the top of the screen. It looks very similar to the “ribbon” menu in Microsoft Office.

I like how the icons are arranged and the layout makes it easy to find things because they are categorized in a very logical way.

This type of menu is much easier to use and is a welcome addition. Forex Tester 4 had a very small and compact that made it really hard to use on a tablet.

So the menu is a great improvement in version 5 and I really like using it.

Strategy Optimizer

Another new addition is the strategy optimizer. It allows you to upload FT automated strategies, or MetaTrader EAs.

You can then do an automated backtest in the software and look for optimizations.

This is similar to the strategy optimizer in MetaTrader 4 and 5.

Forex Tester 5 also goes one step further and they provide automated AI programs that are supposed to help you speed up the process of optimizing your automated trading strategies.

I'm not into automated trading, so I haven't tested this feature. But this can be useful for people who are into trading bots.

Notes Section

Forex Tester also added a notes section, which is really handy. The notes are stored in each backtest and allows you to jot down ideas in each test.

Here are some ways to utilize the Notes section:

• Record ideas on how to change the system for the next test
• Note trade dates that you want to go back and review later
• Write down questions that you have during the test
• Note a chart pattern that you see that you might want to test later
• Journal trades as you take them
• Record your impressions before and after the test

If you store your notes in another place, then it's easy to lose them. Having your notes in the backtesting file is the best solution.

Visual Risk/Reward Tool

Awhile back, I made a video about how to turn the Fibonacci tool in MetaTrader 4 into a visual risk/reward tool. Since then, TradingView has made this a standard tool on their platform.

Now Forex Tester has this tool available in version 5.

To access the tool, go to Charts > Graphic Elements > Risk/Reward Tool.

Then add the tool to the appropriate area of your chart. Here's what that looks like.

This is a great addition to the program. However, if you look closely, there's something wrong here.

The Risk/Reward ratio is not calculating correctly. 

As you can see in the example above, this a buy trade. Since the profit target in green, is bigger than the stop loss in red, the ratio should be greater than one.  But it's not.

I'm sure that they will fix this at some point, but the solution is simple. Just use the opposite tool and you'll be good.

So if you want to calculate a buy trade, use the sell tool, and vice versa.

Multiple Windows at the Same Time

This is one of the biggest advantages of Forex Tester. It's been available in previous versions, but I want to point it out here because it really helps.

In Forex Tester, you can have multiple windows open at the same time. This allows you to watch multiple timeframes and currency pairs at the same time. 

Watch the video at the top to see it in action. It's a really handy to be able to track support/resistance levels on multiple timeframes, track correlation between markets and take trades on multiple pairs at the same time.

I use this feature to watch the next higher timeframe, from the one I'm testing. 

Easy Forex Builder

Let's be realistic.

It's actually really hard to create an indicator/EA builder and give it the ability to everything.

There are many circumstances where you really do need to know how to code, or hire a programmer to do it for you.

Therefore, any “no-code” tool will have limitations. But the Forex Tester team has been building their platform for creating indicators and EAs. It was originally called Visual Strategy Builder, but they have since changed the name to Easy Forex Builder.

They do have a free version that allows you to download 2 strategies/indicators per month. But if you want more, you'll have to pay the monthly fee.

I wasn't particularly impressed with the original beta VSB tool, but you can give it a try and decide for yourself. They may have improved it. In all fairness, I haven't seen a no-code tool that can create complex programs, so EFB is not alone in this regard.

However, I do feel that these types of tools very good for testing basic ideas.

Maybe test a simple strategy with 1 or 2 indicators. Then you can do manual backtesting to refine the idea.

If the idea works, you can code it up or have a programmer do it for you.

Education Buttons

At the time I did the video at the top of this page, the education modules didn't seem to work yet. But now they have the Basic Courses working.

Each lesson is really short and to the point. I went through a few of the lessons in the Basic Courses and they look good.

As you can see, the graphics could be better, but the information is useful.

Downsides of Forex Tester 5

There are a couple of downsides in this software. Obviously there's the Risk/Reward tool bug that I mentioned above.

Another thing that isn't optimal in FT 5 is that the playback can get really slow if you have certain type of indicators on the chart.

I would guess that a lot of that has to do with how complex the calculation of the indicator is, and how many you have on the chart at once. Indicators like the Parabolic SAR can take more time to calculate.

So the solution there might be to get a faster computer. Since I don't use many indicators, if at all, this isn't a problem for me. If you are concerned about this, be sure to download the demo below and test the speed for yourself.

Finally, as I've mentioned about previous versions of Forex Tester, a huge benefit would be a legit reporting system in the software.

They have the basics…win/loss percentage, max losses, trades per month, etc.

But real traders need much more. There was a website that came close in the past, but they weren't able to make money and went under.

In my opinion, upgrading the reporting system would be a huge upgrade to Forex Tester.

Maybe in Forex Tester 6? 

Forex Tester 5 Download

If this appeals to you, get a free demo of Forex Tester and you can give it a try on 1 month of backtesting data.

Use the link in the next section to download the demo.

How Much Does Forex Tester 5 Cost?

The regular price for Forex Tester 5 is currently $299. However, if you wait for one of their sales, you can get it for much less.

On top of that, I have a coupon that will give you an additional discount on top of the sale price. The final price you pay will depend on the sale that they are currently running.

So be sure to check this page to get the coupon and the best deal possible.

Final Thoughts on Forex Tester 5

Backtesting is one of the best ways to develop and practice a Forex trading strategy.

I skipped a few of the features in FT 5 that I already talked about in FT 4. Most of the same features in FT4 are in 5, so if you want to learn about more of the features in Forex Tester, then see this review.

Otherwise, I still recommend using FT 5 for manual backtesting. 

Happy Backtesting!

The post Forex Tester 5 Review appeared first on Trading Heroes.

Learn how to get started with the backtesting feature inside ThinkTrader called Traders Gym. This step-by-step guide will show you exactly what you need to get started with the desktop version of this free manual Forex backtesting software right now.

I wasn't able to find a good manual on how to setup Traders Gym, even on the ThinkMarkets website, so I decided to create one.

Stick around until the end to find out how well Traders Gym compares to the top backtesting software out there.

Step 1: Download the Desktop Version of ThinkTrader

Get started by going to the ThinkTrader website. Then download the appropriate version for your device.

The link is at the top of the page.

I would highly recommend using the desktop version for backtesting. It's much easier to use than the mobile versions.

ThinkTrader used to be called Trade Interceptor, so don't get confused if you see both names online.

There are still some Trade Interceptor webpages out there. They simply redirect to ThinkTrader when it comes time to download the app.

Step 2: Setup an Account and Login

Once the software is installed, sign up for an account. It's free to sign up and allows you to use the backtesting feature.

Now that you have a login, open ThinkTrader and enter your username and password.

Make sure that the Traders Gym button is selected, then click the Login button.

Step 3: Create a New Chart

One weird glitch with Traders Gym is that there's no easy way to go back to the beginning of a chart.

In addition, if you open a new chart and there's already a chart open on that currency pair, your new chart will start where your existing chart stopped.

Therefore, in order start a fresh chart at the beginning of the data set, you need to open a chart for a currency pair that is not already open.

For example, let's say that you have a EURUSD chart currently open and you've stopped at 11/2/2019. When you go to open another EURUSD chart, it will also open at 11/2/2019, not at the starting date that you select.

Now that you understand that, open a new chart by clicking the plus symbol at the top of your screen.

A popup window will allow you to set the parameters for your test.

You can select the following:

• Feed: There are only 2 data sources available. The default TT feed is a good place to start.
• Symbol: Select the symbol you want to test. Stocks are also available.
• Price type: Select bid, ask or average.
• Timescale: This is the timeframe chart you want to use for you test.
• Initial interval selection: Drag the slider all the way to the left to start testing from the first date in your selected range.

It initially looks like you can only backtest 1 year of data, but you can actually get more history. If you click the lower left date on the slider, it allows you to select an older date.

Once those settings look good, click OK to get started with your test.

When your chart first opens, the candles will be huge! 

Adjusting the zoom on the chart is not intuitive. The only way that I found to zoom in and out is to use the scroll wheel on your mouse, or scroll up and down on your trackpad. 

Step 4: Add Your Indicators

Once your chart opens, you can add indicators by clicking on the Indicators button in the toolbar in the middle of the screen. 

They provide most of the popular indicators, so there's a good chance that your favorite indicator is there.

Traders Gym doesn't allow you to upload custom indicators, so if you trade with a custom indicator, you're out of luck.

Step 5: Set Your Speed

The last thing that you have to do before you start testing is to set the speed at which your charts will move forward.

There are 2 settings:

• Tick size: Set how much each tick will move. For example, you could be testing on the Daily chart, but you want to see each tick move on the 4-Hour timeframe.
• Overall chart speed: Set how fast the chart will scroll forward.

Step 6: Start Placing Trades

Now you're ready to start testing!

To start testing, hit the play button below the chart. You can use the back and forward arrows to move one candle at a time.

When you want to take a trade, simply right-click on the chart and select Order window from the menu.

That will bring you to the order window. Input the details of your trade and click Place Order.

Your trade will appear in the Active tab in the account section of the screen. Use the Pending tab to see pending orders and the History tab to see all of your past trades.

To close the trade right-click on the trade and select Close selected orders. You would also use the same process to do any of the following functions below.

You can use the settings button to deposit or withdraw funds, or delete the account.

To create a new account, click the plus symbol next to the account tabs.

ThinkTrader Traders Gym Review

Here are a few of my thoughts after using Traders Gym. The biggest upsides are:

• It's free
• You can use it on desktop and mobile platforms
• They provide a good amount of free historical data

However, there are some downsides. 

I have several issues with this software, but these are the top 3.

Frequent Disconnection

An annoying thing with ThinkTrader (Mac) is that it keeps dropping the internet connection and reconnecting. This makes the icon bounce on the bottom of my screen and is really distracting.

I don't know of any trading program that has to reconnect so often.

It really makes me wonder how reliable this would be if it was used for live trading.

This literally happens every 5 to 10 minutes or so…

Have to be Connected to the Internet to Backtest

One of the biggest benefits of software like Forex Tester is that you can download the price data to your computer and backtest offline.

I can see where this might not be possible on the mobile versions of ThinkTrader because mobile devices tend to have very limited storage.

Downloading data is certainly possible on most desktop devices however, but is not available on the desktop version of ThinkTrader.  

In addition, you need to be connected to the internet and login to even get to the backtesting screen. 

I understand why they do this, but it doesn't make sense when it comes to backtesting.

Only 1 Data Source, No Option to Upload

Finally, there's no option to upload custom data or indicators. It would be nice to be able to import my own data sets like you can do with MetaTrader.

If you need custom indicators for your trading strategy, then you're totally out of luck with ThinkTrader.

Conclusion

So that's how you start manual backtesting with Traders Gym.

You are probably wondering if ThinkTrader is worth using for Forex backtesting.

The answer to that is relative. It really depends on what your needs are.

It might be good enough for some, but totally unusable for others.

To see my complete review of Traders Gym, and how it compares all of the major backtesting platforms on the market, head over to this post.

That video will show you examples of each software, a complete backtest for each and you can see the software in action.

The post ThinkTrader Traders Gym: Beginner’s Guide appeared first on Trading Heroes.

As you probably know, I've been a big fan of Forex Tester, almost since the beginning of this site.

But curiosity started to creep in…

Is there something better out there?

I've been using Forex Tester because it works well, so I didn't have the need to look for other software solutions. But I believe that it's always a good idea to periodically review what you are doing in life and in trading, and make upgrades…when it makes sense.

So I decided to revisit the Forex backtesting software landscape this year and take a good hard look at all of the viable options out there.

Maybe there's something that's better, and at a cheaper price. If there is, then I would love to recommend it to my readers as a better solution…or at least a viable alternative.

To that end, I researched all of the manual Forex backtesting software solutions on the market and tested them with the same trading strategy.

Learn what I discovered, in this video:

Update: I recently discovered a new software that I feel is better than all of these options.

Learn about it here.

Rules for this Challenge

I wanted to test trading products that would be affordable for most traders, so here's the criteria I used:

1. The software can be purchased for less than $200 total (for one-time downloads), or less than $200 per year (for subscription products)
2. The software must be able to be used for manual backtesting
3. The software must be able to backtest the Forex market

From there, I'll backtest a trading strategy that I know nothing about, then reveal the results.

Actually doing the backtesting will reveal a lot about the software.

The Challengers

Based on the criteria above, I rounded up the following challengers:

• Forex Tester 4 (paid, one-time)
• Think Trader, formerly Trade Interceptor (free)
• Soft4X (paid, one-time)
• MetaTrader 5 (free)
• TradingView (free and paid, subscription)
• NinjaTrader (free)
• Excel (paid, one-time)

UPDATE: Forex Tester 5 is now available. Watch the review video here.

You might have a few questions about these products, so I'll clarify my choices.

Yes, the regular price of Forex Tester 4 is $299. However, they frequently have sales where you can get it for less than $140, which qualifies it for this test.

You might think that Excel doesn't belong on this list. I'll explain why I've included it in a bit.

I'm using the Pro version of TradingView, which is currently less than the $200 per year minimum. If you upgrade to the higher plans, then you would be over $200 per year. The price might go up in the future, but it currently qualifies, as of the original writing of this post.

The Categories

Here are the categories that I'll be judging these software solutions on:

1. Overall ease of use
2. Value for money
3. Data availability
4. Usability for manual backtesting
5. Best overall manual backtesting software

Alright, now that we have that out of the way, let's take a look at the strategy that I'll be testing.

The Trading Strategy

I've never tested moving average crossovers because they didn't make sense to me. My belief was that as soon as two moving averages cross over, you've already missed the easy part of the move.

…or so I thought.

…but what if they really do work?

I'm willing to keep an open mind, until I get conclusive proof.

That's why we test. 

So I approached this like a new trader and I Googled:

“moving average crossover strategy forex”

The first legit-looking search result that came up was from the DailyFX website.

When I clicked on the link, I was taken to the site with the trading strategy “rules.” This strategy was a perfect test because it's traded on the daily chart, so I could test it quickly.

The entries and exits are fairly straightforward, so you can test it too and verify my results.

…and it also highlights a few key weaknesses in most of the free trading education on the internet.

You can see the original strategy here.

According to the blog post, the following are the “rules” for the strategy. I use quotations because what I found wasn't a complete set of rules.

For future reference, the title of the post is: “Learn Forex: Trend Trading Rules with Moving Average Crosses.”

This is something important to pay very close attention to. Most of the blog posts, YouTube videos and free eBooks on the internet aren't giving you the rules for a trading strategy.

They are giving you trading ideas, guidelines or concepts. 

Ideas are a good start, but too many new traders think that this is a complete strategy, don't test it, and fill in the blanks with their own rules.

…and they wonder why they lose money.

Guidelines From the Post

Anyway, back to the DailyFX guidelines. Here's what I gathered from the post:

• Use the 50 and 200 moving averages, I'm assuming the simple moving average
• When the 50 crosses over the 200, then enter in the direction of the crossover
• Set the stop on the other side of the 200 SMA
• Trade this on the daily chart

Notice that there are key elements missing from this trading plan.

What I Added

Here's what I had to add, to make this a complete trading strategy. I added as little as possible, to make this a tradable plan. There are other tweaks that I would ordinarily make, but let's start simple.

• Risk 1% per trade
• Take profit when price closes on the other side of the 50 SMA
• Set and forget, no adjusting of the stops or take profits once the trade is entered

Now we have a complete strategy.

Remember that most trading “strategies” out there aren't really strategies because they are missing a lot of key definitions. You can use this worksheet to define a complete strategy.

Finally, I'm going to be testing this strategy only on the EURUSD. Since I'm going to be testing this strategy many times with different data sources, this will also give us a very good indication of if this strategy works or not. 

Example Charts

It helps me to have a visual of how this strategy works. So here are a couple of examples on a chart.

Here's a long example:

A short example:

Testing Results

Once I had a trading strategy to test, I started testing it on each software product. I also tracked the time that it took to test the strategy, so you can make software decisions based not only on cost, but on time savings.

You can see complete recordings of the tests in the video at the top of this page.

Here's a breakdown of the results from each test.

ThinkTrader

• Win rate: 39%
• Return: 16.7%
• Number of trades: 23

Learn more about TT here.

NinjaTrader 8

• Win rate: 50%
• Return: 38.4%
• Number of trades: 32

Learn more about NT8 here.

MetaTrader 5

• Win rate: 46.1%
• Return: 33.6%
• Number of trades: 26

Learn more about MT5 here.

TradingView (paid, Oanda data)

• Win rate: 47.1%
• Return: 34.4%
• Number of trades: 21

Learn more about TV here.

Soft4X

• Win rate: 28%
• Return: 61.8%
• Number of trades: 25

Learn more about Soft4X here.

Forex Tester 4

• Win rate: 33%
• Return:15.2%
• Number of trades: 21

Learn more about FT4 here.

Get the best Forex Tester alternatives here.

TradingView (free, FXCM data)

• Win rate: 38.6%
• Return: 24.9%
• Number of trades: 102

Testing Analysis

So all of the tests were profitable, but they had different results. Still, I would say that this strategy has an edge.

But you may be wondering why the results were so different between the different software products.

Let's take a look at why this could be and how this affects your confidence in backtesting results.

There are several reasons why the results could have been different:

• The data is always different from broker to broker and maybe that's just how it worked out.
• Since I only tested once per software program, I might have made some execution errors. This is why it's important to test more than once.
• There may have been some settings that were different between the platforms.
• The number of trades was relatively low, so maybe the averages haven't had time to work out yet.

This difference in results also brings up an important point. You should test with data from different brokers and currency pairs, to see how robust a strategy is.

Backtesting software that only allows you to use 1 or 2 data sets won't give you the full picture of how well a strategy works. 

But overall, this strategy was profitable across the board. So if this strategy interests you, it might be worth checking out. 

Be sure to test it a few times with different data feeds before moving it into forward testing.

Forex Backtesting Software Rankings

Testing Efficiency

Before I get into the rankings, I'll share with you my efficiency rankings.

I measured the efficiency of each software in days of historical data tested, per minute of backtesting time. 

According to this measure, Soft 4X came out on top.

But remember, faster isn't always better. You can miss trades when you go too fast. 

I actually like the fact that Forex Tester 4 has a reasonable top speed, so you don't overshoot trade entries. In the end however, it's up to you to set a speed that works for you. 

Since this was a simple and straightforward strategy, I could go really fast.

On this other hand, if this were a more complex strategy, I would predict that I would have to go slower and the efficiency rating would be very similar across the board.

Data is data however, and those were my results for this strategy.  

Now that I had a chance to try all of the backtesting platforms, here are my final rankings. I'll also give you some analysis on why I chose the top two in each category.

If you want to hear the complete analysis of all the lists, watch the video at the top of this page.

Overall Ease of Use

1. TradingView (paid)
2. Forex Tester 4
3. MetaTrader 5
4. ThinkTrader
5. Soft4X
6. TradingView (free)
7. NinjaTrader 8

TradingView is such a pleasure to use. You can use it on almost any device with a browser and you don't have to install any software. That's why it's my favorite charting and trading platform.

Forex Tester 4 is second because it's very well integrated, but it still only works on Windows, which is frustrating. You can also download a lot of different data feeds from within the program, making it much more useful than the other software on the list.

Value for Money

1. Soft4X
2. Forex Tester 4
3. ThinkTrader
4. MetaTrader 5
5. TradingView (paid)
6. NinjaTrader 8
7. TradingView (free)

Soft4X is currently under $100 and the best value for money. It provides 2 data download sources built-in, which is good enough for most people to get started. You can also upload your own data into MT4, if you want to test with data from other brokers.

The only downsides to Soft4X are that it's little clunky and it doesn't automatically save your work. If you don't hit the save button before you close, you will lose all of your data.

But Soft4X does automatically track your backtesting trades, which is a huge bonus. It also provides a MT4 report for your trades, which is really nice.

Forex Tester 4 is slightly more expensive than Soft4X, when it's on sale. However, it is a much more integrated solution and easier to use, so I feel that it's worth the extra cost.

If I'm only considering value for money however, Soft4X is the better choice.

Data Availability

1. Forex Tester 4
2. TradingView (paid)
3. TradingView (free)
4. Soft4X
5. MetaTrader 5
6. NinjaTrader 8
7. ThinkTrader

Forex Tester's data service allows you to download data from multiple brokers, right in the software. That alone is a huge time saver because you don't have to search for third party data, then store it on your computer.

However, if there is third party data that you would like to use, then you can upload that into Forex Tester to. It really is the best solution.

TradingView gives you instant access to data from multiple Forex brokers, which is awesome. But you cannot upload your own data, so that's why it's at number 2.

Usability for Manual Backtesting

1. Forex Tester 4
2. Soft4X
3. ThinkTrader
4. TradingView (paid)
5. MetaTrader 5
6. NinjaTrader 8
7. TradingView (free)

Forex Tester still wins in this category. It's a much more integrated solution, it tracks your backtesting trades automatically and it has most of the frequently used indicators.

You can also have custom indicators programmed for you (find a programmer here), and you can even test automated strategies.

Since Soft4X is a plugin to MT4, there are limitations to the software. But since it also saves you from using a spreadsheet to record trades, it's a great option.

Learn about the best Forex Tester alternatives here.

Best Overall Software

1. Forex Tester 4
2. Soft4X
3. TradingView (paid)
4. MetaTrader 5
5. ThinkTrader
6. Tie: NinjaTrader 8 and TradingView (paid)

Forex Tester 4 is still the best Forex backtesting software for manual testing. I can't say that I'm surprised.

However, I'm extremely surprised (in a good way) with Soft4X. 

It has matured into a very viable backtesting option. If you're strapped for cash, or if you aren't sure if Forex trading is for you or not, then it's totally worth checking out Soft4X.

The only caveat to that statement is that I haven't stress tested Soft4X, like I have Forex Tester. I've literally tested tens of thousands of trades with Forex Tester, but only a handful with Soft4X.

In addition, since MetaTrader is phasing out MT4, who knows how long we will be able to use Soft4X, because they don't have a MT5 version yet.

So, if you want the absolute best product on the market, Forex Tester 4 is it. 

Excel

I mentioned in the beginning that I would explain why I've included Excel on this list.

There are certain individuals out there that believe that Excel is the best solution for manual backtesting.

So if you come across anyone that insists that Excel is a good manual backtesting solution, then point them to this post.

Excel can be used for testing some automated strategies.

But it's totally worthless for manual testing. There are no charts and you aren't practicing the mechanics of entering trades. 

Backtesting software can also be used for trading practice, much in the same way that a boxer goes to the gym to train.

Excel cannot be used for that either.

Final Thoughts on the Best Manual Backtesting Software for Forex

Whew, so that's it!

This took a lot of time and research, but it was worth it.

In the end, Forex Tester is still the best software out there for manual backtesting. 

But I'm glad that I also found Soft4X. It's a good software solution that has some drawbacks, but can be a good solution for some people.

I'm just a little nervous that it only works on MT4, when that version is being phased out.

I also found another trading strategy that could have an edge. More testing would have to be done on this strategy, but it looks promising.

Trade well!

The post Best Forex Backtesting Software for Manual Testing (Comparison) appeared first on Trading Heroes.