After back testing, presuming the system looks lucrative, you may then test it in a demo account on the live market. This gives another range of valuable FOREX trading information associated with your system.
Demo testing is still risk free because you will not be using real money, but you are reacting to the state of the market in real time. Obviously this is a slower process because you have got to wait for a trading signal instead of scrolling through past charts. It gives extraordinarily valuable feedback about how you would actually operate the system.
It is possible to check a couple of systems at the same time in a currency exchange demo account, which saves time. It’s very important to record them separately. It is necessary also to take into account the fact that operating a couple of systems in real time could mean that you miss some triggers. On the other hand if you plan to operate more than one system concurrently when you switch to real money, it’s a excellent idea to do that in demo first so you can see the effect on your trading.
Testing your system effectively can take a while, but it’s time very well spent. While you are testing you will be learning a huge amount about the behaviour of the market and your own trading behavior, as well as the system itself. Traders frequently forget to consider their own behavior or trading style, but it’s critical to the success of the system and is often the reason why people who follow systems that have worked well for other traders, have difficulty making them profitable. They look for more FOREX trading information but do not see that their own personality has an effect on their trading too.