Archive for July 19th, 2008

Forex trading simulators

Posted on July 19th, 2008 by admin, under forex platforms.

Forex trading simulators

No savvy trader would trade a system with a real account and risk real money without first observing its behaviour on paper. A trading simulator is a software application or component that allows the user to simulate, using historical data, a trading account that is traded with a user-specified set of trading rules. The user’s trading rules are written into a small program that automates a rigorous “paper trading” process on a substantial amount of historical data. In this way, the trading simulator allows the trader to gain insight into how the system might perform when traded in a real account. Trading simulator makes it possible to efficiently back-test, or paper-trade, a system to determine whether the system works and, if so, how well.

 

Types of Forex trading simulators

There are two major forms of trading simulators. One form is the integrated, easy to use software application that provides some basic historical analysis and simulation along with data collection and charting. The other form is the specialized software component or class library that can be incorporated into user-written software to provide system testing and evaluation functionality. Software components and class libraries offer open architecture, advanced features, and high levels of performance, but require programming expertise and such additional elements as graphics, report generation, and data management to be useful. Integrated applications packages, although generally offering less powerful simulation and testing capabilities, are much more accessible to the novice.

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