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TestingWith any new strategy or with any adjustments made to an existing strategy, make sure that you test them thoroughly before risking real money. Meta Trader allows you to backtest expert advisors and you should normally do this. This is very important if you are adjusting settings, and while it is not essential if you are just running a new expert advisor with the default settings, it is still a step that will help you to understand better the charactersitics of the expert advisor. Back testing is not the same as running live (because the data feed is only an approximation), but it will give you an indication of how the expert advisor will perform. Some strategies are not back-testable and you should seek and examine the trading histories that are made available by the supplier of the strategy (though do remember that it is possible to forge trading histories). Most forex brokers will allow you to easily open a demo account free of charge. You should test your expert advisor on one of these to get a better idea of how it will behave. Note that demo trading still does not exactly match live trading. Prices are normally very close, but in demo trading, each order will always be filled at the quoted price. In live trading, prices do move and you can lose (or gain) a few pips on each trade. Sometimes in live trading, orders do not get filled at all. Demo trading is closer to live trading than backtesting. Finally, start with minimum size trades on a live account. Don't risk significant amounts of your capital initially. Gain some confidence with the system and its profitability before you place full size trades. Once you risk real money, fear and greed become much bigger factors than they were with demo trading; starting small and gradually building up the trade size allows you to better handle the psychological aspects of trading. |