A forex trading simulator is a software that allows the trader to test his strategy offline with the help of historic data from the markets. This software has helped many of them to eliminate any kind of losing strategy. Even if you are working offline, you can open or close your orders the same way you did in an online session. The major advantages of using a forex simulator are:
- It acts as a live trading environment
- One can implement new ideas and see if they work or not.
- One can forward test or backtest your trading strategy.
- It allows for riskfree trading.
Read More: HOW FOREX BROKERS MAKE MONEY IN TRADING?
Before you start in with the evaluation of your trading strategy, make sure of the setup which you are to use. Mentioned below are some of the key characteristics of best forex trading simulator:
- Live Pricing Feed
It’s important to ensure that your simulator streams live pricing data with a real market environment. If the software doesn’t feature the live pricing data then there is no use of it, as one won’t be able to his trading strategy effectively. A live pricing feed would mimic the spread meaning that when the trader is going to run his strategy, it will make use of the actual spreads in the market. With the benefit of real-time price, data will ensure that the backtested results are much accurate. This has helped many to make a choice of whether one can rely on the historical data in the software.
- Forex Trading Simulator Historical Data
In the second checkpoint to success, you need software with accurate historical data. If the software that you have doesn’t have enough price data, then the performance of your trading strategy won’t be judged or give assured backtested results. The best forex simulators will give you with all the historic prices. It is responsible to give you the ability to browse historical data for the preferable currency pair. The historical data is needed to be in a clear format where you open and close the prices for the selected currency pair and timeframe.
- Flexible Virtual Money Amount
Many traders in the market forget the importance of using a virtual account balance. It is the most recommended advice given by the experts to the traders to start with the virtual cash, you wish to use in your live trades. This has the capability to set unrealistic expectations that would lead to losses once you will start trading. The usage of money at the time of backtesting can help the trader to implement a realistic risk management strategy.
The main reason why the people choose a simulated forex trading is that it can filter out the poor trading strategies and optimize the trades being made to get bigger profits out of our system. Every beginner in the business must go for it before trying their luck on the real one.
Read More: INSTRUMENTS OF THE FOREX TRADING