I know this has been touched on a lot. Live vs simulation. But if i were to spend the 199USD would it be better to put it into my live account and continue to practice with small amounts OR buy the simulator software?? The only advantage I see with this is i can simulate multiple TFs and fast forward? Opinions?
I’d say put it into your live account and continue to practice with small amounts. Don’t think you should need to spend $200 on some simulator software. You should be able to run your backtests just fine in MT4.
Here is a great simulator without spending a penny. - http://forums.babypips.com/newbie-island/40496-historical-data-download.html#post278041
thank you for the recommendation but unfortunately it does not have capabilities to do limit orders. Due to the speed i need to work effectively and when i need to pause and do an order. i always miss the best entries, or don’t take trades i should have failed at because i can see the price action of the next candle. I just cant use MT4 simulators that do not have limit order capabilities. I really appreciate the time you took to link that to me.
Have you tried it? It does have Limit orders in the scripts, but I haven’t tested it, and I won’t bother because I don’t need them so I can’t tell you about them, but just in case you were overlooking it by assumption.
Yes I tried it myself. People get confused because of the terminology of sell stop limit and buy stop limit. These are stop loss orders not actual limit orders.
Spend it on a live account. I suspect that it will be worth 2000 pips in microaccount as a loss. Thats 20 weeks of constant 100 pip a week losses, and no wins. Considering you are expecting to get good within that time, I think the microaccount is much better. Even if you were not trading that well, losing 50 a week you could expect that being worth 30-40 weeks of live trading.
And I am suspecting that you are going to try and manage your trades rather than just set and forget, and that is where psychology will come into play. Currently psychology is responsible for halving my pip haul, and that won’t be practiced in a simulator near to live or even demo.
The only use I think for it would be improving money management - which could be tested and optimised using Mt4 back data. Again, I suspect that this is responsible for losses as well.
I just came across this thread after buying that exact same simulator, so, whatever I say is likely prefaced pretty heavily by my action. It didn’t even occur to me to put 200 in a live account instead. At my present skill level I’d probably just lose it without learning much more than “I’m a loser” ~ but that’s just me. I’m likely to pick up Ninjatrader at some point too, but right now I just need to get out of the ‘noob level’ with regard to the technical side of my trading, and that’s all I expect from a simulator.
I’d tried the free EA mentioned some weeks ago, and while it worked and was actually rather brilliant, it wasn’t as smooth for me as a ‘paid’ simulator I guess. Yes, I’d pay for something really easy to work with if I’m going to spend weeks with it. To me, it’s about the same as if I just bought a Starcraft II Collector’s Edition video game. I’m going to wear the pixels out on this thing before I’m done with it. In fact the video game skilling approach may be a rather apt analogy. My forex ‘character’ will probably ‘die a lot’ before I can take on the hardcore, “real money, real time” setting.
Mind, this isn’t a glowing endorsement of any product and can’t be, since I haven’t really got into it yet. Just had some demo time, was all. Ultimately I’m leary of posting any kind of review good or bad, to tell the truth. It would be useless; rarely does anyone share my opinion on such things. For instance I’m not all that happy with Apple product interfaces, even though much of the world absolutely adores it.
Ultimately I think it’s personal preference. If you have the technical trading down pat, and learn from each mistake the first time maybe you don’t need a simulator at all. I do make mistakes more than once, I am a quick but sometimes ‘sloppy’ learner and also tend to evaluate my skill level a little higher than I should ~ which made me do great on job interviews, years ago! Someone like me could sure stand some ‘years’ on a simulator. Demo trading’s going ok, but my trading style only does maybe 2 or 3 trades a week. Not a fast way to build any kind of confidence, or show that confidence is unfounded.
If you want to wait a few weeks I can post about how much a simulator did or didn’t help me… but realise that I’ve never traded a live account yet and probably won’t start until 2012. Even a picture of Adam Smith smiling down at me from over the computer monitors would probably be a solid help for someone at my present low skill level.
Consider this…
If you put that $200 into a live account, what strategy will you be trading? What days of the week are best to trade that strategy? How much can you expect to make from that strategy? What is the greatest number of losers in a row of your system? And the most important one…does it even work?
Also consider this…
If you put $200 into a live account and have a system to trade, how much practice will you get with a live account? 1 trade a night? Let’s say that you need about 1,000 trades with a system to really understand it and get good at it. That means you will need about 1,000 trading days to master it.
My opinion is…
For these two reasons alone, you should get Forex Tester 2 immediately after you finish BabyPips Forex School. You need to test whatever you are trading and practice it as much as possible before putting in real money. Backtesting won’t guarantee success, but it will put the odds in your favor.
I have used FT2 since the beginning and it is the best product on the market. Nothing else comes close for discretionary testing.
Let me know if you have any questions.
That really convinced me to get the tester. Although it is quite expensive. Accelerating my learning from 1000 days to possibly a few months, assuming I use the fast forward. Really hit me. Yes I would love to know the absolute stats on my system. Also should I refine it to have max draw down, max losers, max winners, equity % etc… all while learning more about Forex and trading in general. Wow really put it in perceptive. Considering if i ever want to practice on weekends or refine my strategy or add something new it will come in handy. I really think i will pick this software up now. Everyone likes to accelerate their learning process, especially me 
Meihua -check this forex tool out - it enables you to place limit orders and its free.
Problem is that for me it seems bugged in that you can place buy orders - that works REALLy well, but not short orders which makes the system really rubbish. If someone sorted it out it would be perfect
A quick update ~ I’ve been trading historical data extensively this past few days, and I have to say… there’s nothing quite like it. Trading on a one hour timeframe I can trade about a week’s worth of real time every few minutes. I’ve gone back over the same data with various strategies, and there are definite strengths and weaknesses. Of course, there’s a lot missing ~ I don’t know what the news events were, or other fundamentals, but even so it’s a powerful experience and highlights just how good (or bad) things can go.
One of the things that jumped out at me was the incredible power of ‘calling a long term trend right’ ~ imagine staying in a trade going in the right direction for weeks. Another tidbit ~ trends seem to ‘flatten’ during the asian session… but of course, they often would, because it’s often so flat then. I was considering this flatness as ‘trend weakness’ prior to backtesting; now it’s just a common daily cycle that doesn’t mean so much. And finally… some methods can just plain ‘go dead’ for as long as months, then start to become useful again. For good annual returns it makes a lot of sense to just plain ‘stay out’ even for weeks or months, if your strategy isn’t likely to do well in say, a non trending market. Quite a bit of patience required!
My sense on buying a simulator is this: it’s money I won’t be losing, and probably well into the positive because at least in my case, I could have lost a lot before getting a grand, sweeping tour of years of forex trading. It’s also really blunted the ‘emotional’ side of trading; once a few thousand trades have gone by, it’s a lot easier to see each individual one with proper perspective. A few losses in a row doesn’t phase me much, now, so long as I know that same strategy will steadily bring 3:1 or 4:1 wins (for instance).
On the finer details, I’ve found that even relatively subtle changes in say, trailing stop management can make HUGE differences over time. In other words, it can be the difference between success and disaster, even if all else is ‘right.’ And this is with ‘by hand’ testing, not automation. The ROI calculation looms large, over the long term.
My guess is that some day, maybe in 5 or 10 years, brokers or sites like this one will offer a java app for historical trading practise. It’s an incredibly powerful learning tool. Imagine if it were like an ‘online game’ and I’d say the 90% of ‘bad traders’ out there would be able to quickly come to terms with their skill level, and do something about it before paying dearly to find out the hard way.
Hmm… maybe brokers would not be interested in this? Armed with such knowledge, would 80% of their customers walk away? An open question…
Awesome, keep up the great work!
You make an excellent and very timely point, absolutely no sign of any trading on the 15m EURUSD for me, leave well alone I say, but admittedly I haven’t been quite patient enough, which is one of the reasons why I only do quite well from my trading rather than staggeringly well, it’s the transition that gets me, you can get weeks of really nice trading, then your pair just hangs around providing horrible spikey charts, then loose a weeks profit, and that’s the inherent problem with trading, taking a simple MM strategy, losing 1 trade makes in need of 2 trades to be back in profit.
So often you see the question from newbies, How many pips per week? and Should I use targets? Things you should absolutely forget about, even year on year, you monthly pip average will change.