A few months ago, we started a trading series where we go through various market situations
and decide whether to buy, sell, or pass. It's amazing to see these videos amassing
millions of views in such a short span of time. We have also received many questions about
the software we use to practice trading. Today, I'm going to share the whole process with you,
including this software that allows you to practice your strategy in a real market environment.
This video would provide a practical, step-by-step guide on how to test any strategy and turn it into a cash machine.
Stick around till the end as I have a great gift to share with you. The tool essentially enables
you to practice trading on any currency pair using a virtual account that you can create with any desired balance.
Now, let's learn how to use this software to take your trading skills to the next level.
To make things simpler, let's use a strategy that one of our subscribers called EXPLO 23
has previously submitted to us. You can submit yours at www.lifed.com
slash submit. Well, the strategy is based on triple moving averages and the RSI indicator.
Before we test it, let me share it with you in more detail. The software we are going to use today
is called Forex Tester 6. The great thing is unlike similar software, you can try Forex Tester for
free for a specific period of time. Well, I won't go through the sign-up process as it's straightforward,
but I'm going to share with you later how to obtain the pro version at a great price.
Anyway, I've already downloaded the software. Let's open it up. Before we test this strategy,
let me share it with you in more detail. First, we will need to add two free indicators to the chart.
The first one is the moving average. Make sure to add it on the one-hour chart.
Simply scroll through the list of indicators and find the moving average.
You can adjust the settings according to your preference, but let's stick to the ones in today's
strategy. I'm going to add the 10, 25, and 50 period exponential moving averages.
To distinguish them, we can assign each one a different color.
Once done, let's add another chart on the right side for the five-minute time frame.
On this chart, we are going to add our second indicator, which is the relative strength index
RSI. You can find it under the oscillator submenu. Before we begin testing our strategy,
let's adjust the RSI settings on the five-minute chart. We just need to change it from a 14
to a five-period setting. Now that the setup is ready, and before we begin testing the strategy,
let me share with you the rules. On the one-hour chart, when the 10-period exponential moving average
crosses above the 25 EMA and both are above the 50 moving average. We would consider a potential
buy signal. For further confirmation, we would check if the RSI indicator on the five-minute chart
is below the 30% threshold and starts moving upwards, indicating potential bullish sentiment.
We would enter a buy trade when both conditions are met. Once a trade is placed,
we can monitor its progress in this section, just like in most trading software.
I appreciate this feature as it enables us to trade under real market conditions. After a few
hours, we successfully hit the take profit. Before testing the strategy 100 times, let's review
the cell rules. You might have guessed it already. Well, it's simple. We should wait for the 10-period
exponential moving average to cross below the 25 EMA and make sure that both are positioned below
the 50 line. Once this condition is met on the one-hour time frame, we will move to the five
minutes chart. Here we should wait for the RSI to touch or cross below the 70% level signaling
overbought conditions. Once these conditions converge, we proceed with the cell order.
A few hours later, we managed to hit the take profit again and made a 70-pit profit.
So to recap, we've had two profitable trades so far, and we've grown our account from $100
to $114 already. By the way, I'm using a $100 virtual account to test the strategy.
This comes after the request of many subscribers who wish to begin trading with a small account.
So is this strategy worth it? Well, let's begin our 100 times back test to find out if it is worth it
or not. If you enjoy this content, don't forget to give the video a thumbs up and subscribe
to the channel if this is your first time here. This helps a lot with the algorithm.
Before we review the results, you might be wondering how to obtain this software. Well,
if you'd like to use Forex Tester to practice trading, review your strategies, and optimize them,
you can sign up with a great discount using this coupon. It's a lifetime membership,
so you can use the software forever with no restrictions on the number of tests you can carry out
or other features. All right, I have just completed testing the strategy. It took me around 30
minutes to finish the 100 trades, but this can also be done automatically either using a pre-existing
robot or by designing the strategy from scratch with the help of Easy Forex Builder, which is a
drag and drop tool that you can use for free to automate your trading strategy, turning it into a
trading robot, or even building an indicator that can help you locate entry points. I personally
prefer to test strategies manually in order to get used to the rules or even improve them for
better performance. Let me know if you want me to cover that in the future. All right,
let's review the results together. Basically, we needed 1,090 days to complete our 100 trades,
giving us an average of three trades per month if we consider trading this setup on one single pair.
We can safely say that this strategy is a good fit for part-time traders.
The success rate is 33%, which is okay considering a risk to reward ratio of 1 to 2.3.
This basically allowed us to make a profit of almost 30% over a period of three years.
Let's not ignore that we had nine consecutive losing trades, which is pretty high.
Plus the drawdown was approximately 23%, that is extremely risky in my opinion. Basically,
if we risked more than 3% of our account, in every single trade we made, I'm sure we won't make
it this far. That's why even with a lousy trading strategy, we still have some chance to make money
if our risk management system is solid. So what are your thoughts on these results?
Feel free to share your opinion in the comment section. Honestly, I wouldn't recommend trading
with this strategy, at least not in its current form. There's a chance to optimize it by adjusting
the moving average settings, changing the timeframe involved in the setup, and most importantly,
defining the 4x pair that works best with this strategy. One of the methods to optimize
a strategy is done by studying the losing trades. There are many ways to do it, for example,
we can enable the account history to show the entry and exit points of every single setup.
Then we should look for ways to filter out these losing trades. For instance, in this setup,
we could have avoided this buy entry if we considered this reversed hammer indicating a potential
selling area. We can also try adding one more indicator to the chart to see if it helps reduce
false signals. Personally, I won't recommend adding more indicators as it could overcomplicate
our analysis and increase confusion. Once our strategy is optimized and has shown great potential,
we can create a robot based on it using the easy 4x builder mentioned earlier in this video.
Then, we can import it into the software using the Strategy Optimizer's Automatic tool,
which helps define the best 4x pair to apply the strategy. Before I forget, we are hosting a
giveaway of three free 4x tester lifetime licenses once this video hits 30,000 views.
All you need to do is hit the thumbs up and leave a comment with the name of the country
where you're watching us from. We will randomly select three lucky winners to enjoy a lifetime
access to 4x tester 6. Make sure to subscribe to the channel so you won't miss any future giveaways.
Thank you for watching. A special shout out goes to our golden silver members.
Your support means the world to us and inspires us to create even more content in the future.
Happy trading.