This is a guest article by Forex Kagi
Once you have found one or more fx trading systems that fit your standards, the next step is back testing.
If a system does not produce good profits in back tests, it is maybe not worth pursuing further. Most systems do better in back tests than in the live market, even in demo mode. This is because researching past charts gives you the ideal situation to make the maximum of every trade. Demo testing is slower because you have got to wait for trading chances to appear. However, it gives you a miles better idea of how the system will perform for you, so do not skip this step. In reality you may regularly not open a trade at the moment that the signal is right. There can be slippage when you close the trade, so you may not get the price that you were expecting.
Testing can be a slow process but it is very important to be patient. Going live on a system you’re not sure of will lead on to losses.