MetaTrader 4 (MT4) is a popular platform for retail foreign exchange (forex) traders that offers a range of features including the ability to perform backtesting on historical data. Backtesting is the process of testing a trading strategy using historical data to evaluate its performance.
To perform backtesting on MT4, you can use the built-in Strategy Tester tool. This tool allows you to select a trading strategy, set the historical data period, and run simulations to see how the strategy would have performed under different market conditions. You can also customize various settings such as the spread, slippage, and the amount of capital being traded to better match real-world trading conditions.
There are also third-party software tools available that can be used to perform backtesting on MT4. These tools often offer more advanced features and functionality, such as the ability to test multiple strategies simultaneously or to optimize the parameters of a strategy using genetic algorithms.
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It’s important to keep in mind that backtesting results are only an approximation of how a strategy would have performed in the past and do not guarantee future performance. It’s always a good idea to test a strategy thoroughly using backtesting and forward testing (testing a strategy on live market data) before implementing it in real-world trading.
lets you move back in time and replay the market starting from any selected day. It shows you charts, indicators and economic news as if it was happening live. You are able to place your orders, modify them or close them, just like you were trading live.
Trading historical data saves a lot of time compared to demo trading and other forms of paper trading. It also allows to adjust the speed of simulation, so you can skip less important periods of time and focus on the most important ones.
Unlike other trade simulators, our software lets you use as much as 10 years of real tick data with real variable spread.
Forex Simulator works as Expert Advisor for Metatrader 4. It combines great charting capabilities of MT4 with quality tick-by-tick data and economic calendar to create a powerful trading simulator. It uses offline charts, which let you use indicators, templates and drawing tools available in Metatrader.
However, it is not limited to using historical data offered by Metatrader, which is usually low-quality data. It also lets you download and use high-quality tick data from Dukascopy and TrueFX.
Our simulator is not an EA backtester. It is not possible to test any trading robots or scripts. The software was not designed for that.
The software gives you access to all major Forex pairs and several other instruments. Choose your favourite instrument and trade it.
Starting from version 1.7 of Forex Simulator it is possible to import historical data from Metatrader and use it in simulations. Now, you can run simulations on all instruments offered by any MT4 broker. All you need is a demo account. Read more about importing data from MT4.
You can open several charts at once and follow price action on several timeframes. You can also create custom timeframe charts, like 10-minute chart or 2-day chart. All charts are synchronized and updated tick-by-tick.
All types of charts you ever needed in one place:
- Standard Metatrader charts: M1, M5, M15, M30, H1, H4, Daily, Weekly and Monthly
- Custom timeframes: M2, M10, H2, H3, 2 days, …
- Second charts: 30 sec, 45 sec, …
- Renko charts
- Range charts
- Tick charts
As you can see, our simulator offers you many more timeframes and types of charts than MT4.
You have access to current economic news releases at any time during the simulation. You can display them on your charts as well. Economic calendar is downloaded from Forex Factory and contains events starting from 2007. Other news providers may be available in the future.
News can filtered by their importance and by currencies, so you can easily display events that really affect your trading.
Since this trading simulator is an add-on for Metatrader 4, it allows you to use all built-in MT4 indicators as well as many custom ones. You can also use MT4 templates to prepare your charts quickly.
We cannot guarantee that all non-standard indicators will work fine with Forex Simulator, but there is a good chance that many of them will. Please use our free demo to test your favourite indicators before purchasing our simulation software.
The simulator is capable of drawing charts in one of two modes:
- GMT — all charts are based on Greenwich Mean Time (UTC+0)
- New York Close — all charts are aligned with New York trading session close
The difference between these modes can easily be seen on daily charts. GMT charts will render 6 days in a week, including Sunday bar. New York Close charts will render only 5 days in a week. Also, all daily bars will look a bit different as time is shifted by a few hours.
Many traders believe that New York Close charts are essential in trading Forex. The importance of NY Close charts is better described in Nial Fuller’s article.
The simulation can be saved to a file and loaded at a later time. All your trades, pending orders, stop losses, take profits, trailing stops and other settings will be restored.
You can pause and resume the simulation whenever you like. You can speed it up and slow it down. You can also step forward candle-by-candle on any chart you like, including tick, renko and range charts.
Moreover, there are 2 possible speed modes:
- Ticks per second — ticks are uniformly distributed in time, for example 2 ticks per second or 10 ticks per second.
- Real-time — ticks are distributed in the same way as they were distributed in real life. Of course, you can also speed it up, just like a video recording.
You can also tell the program to pause the simulation automatically on certain events:
- Hitting SL or TP
- Execution of pending order
- Reaching a defined price level
Starting from version 1.6 of the simulator you can easily go back in time if you need to. Every chart is now equipped with a button which lets you move back bar by bar. All your trades, pending orders, stop losses, take profits, trailing stops, account details and even statistics will be restored.
If you miss the opportunity or you simply increase the speed too much, it is not a problem. The simulation can be rewound by a minute, an hour, a day or by any other timeframe you choose.
The simulator lets you use either lot-based position sizing or risk-based position sizing. For example, you can set it to risk no more than 2% of your balance or no more than $100 per trade. Risk-based position sizing requires setting a stop loss to work properly.
Following automatic rules can be applied to any trade:
- Stop Loss and Take Profit
- Trailing stop
- Automatic break-even
- One-cancels-other (OCO) rule for pending orders
Moreover, you can use order templates to work faster and avoid repeating the same steps. A template can be used to save your trade management settings and load them at any time.
Forex Simulator lets you place pending orders, stop losses and take profits by simply dragging lines on the chart. You can also modify existing orders in the same way.
With Soft4FX simulator you can save the history of your trading as an HTML report. It is formatted in exactly the same way as Metatrader account statements, so it is very easy to import it to any third-party tool for further analysis. An example of such tool is Quant Analyzer. It offers quite a lot of useful statistics and features, even in a free version.
It is possible to save your trading history as an Excel sheet, allowing you to study and analyze it in more depth.
The simulator displays statistics similar to ones offered by Metatrader, including:
- Balance/Equity graph
- Absolute, relative and maximum drawdown
- Maximum, minimum and average spread
- Profit factor
- Expected profit
- Largest winning and losing trades
- Longest/Largest winning streak
- Longest/Largest losing streak
You can access your current statistics at any time during the simulation, not only after it ends.
Basic operations can be done very quickly using hotkeys:
- Ctrl + Space — Pause/Play
- Ctrl + Up Arrow — Increase speed
- Ctrl + Down Arrow — Decrease speed
- Ctrl + Right Arrow — Next bar
- Ctrl + Left Arrow — Previous bar
- Ctrl + B — Buy
- Ctrl + S — Sell
- Ctrl + C — Close last trade
- Ctrl + A — Close all trade
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