Forex Tester


I have just spent my first amount of real money on Forex with this software. I have been trading on a demo account for 4 months now and while mostly breaking even I have recently started to see gains consistently. I just wait for a loosing streak now to burst my bubble. Anyway I use the price action method of trading I learned in the million page thread on this forum entitled of all things “price action”. Tends to be popular with the Aussies and even though I am an American I can really see some results with this naked chart stuff. I have a theory and wanted to see what opinions were on this.

When I use the same technique with Forex Tester I always tend to start out OK but then I fail miserably every time. At first glance it would seem that price action is break even at best. However I think something else is going on. Trading on a demo account is live trading so over the coarse of weeks and months you become in tuned with the market. Your lines of support and resistance get moved periodically but you end up with you finger on the pulse of the pair. I think you also tend to avoid certain pairs over certain periods of time because they aren’t putting out, or are to volatile or crazy. With back testing you tend to jump in to a random pair at a random time and feel like you need to make it work. I think that these are just a couple of the many reasons why I do worse at back testing than forward testing. The biggest one is probably the psychology when you start loosing and doubting your system. The doubt and frustration digs in as you give all your money back and I can feel myself boiling over. This also happens in the live market but instead of mere minutes going by you see days go by and have much more time to cool off and regroup before your next trade. I primarily trade on the daily.

So the psychology for manual back testing seems to not lend itself to the best environment for my trading edge for me at least. What are others thoughts on this?

I have always been a fan of forward testing in live accounts with small deposits. I learned that from a successful trader and it made sense to me.