Trading Online Demo Based Testing

Trading online demo testing of new ideas and strategies helps traders optimize old ideas and also come up with new ones. Putting things to the test is the key.

Trading Online Demo Testing of New Ideas

Trading online demo testing of new ideas rids the trader of much uncertainty and fear. It may seem obvious that just by looking at a past market chart. One could make few observations and few price projections and determine the outcome of hypothetical trades. But trading ideas can be much more complicated and unpredictable. This is why demo trading is so useful. Trading online demo testing allows the trader to test many more markets at the same time. This can reveal weaknesses in the trader’s concept of viable ideas. And what risks are posed to money management if many trades all lose money at the same time. Can these markets be traded so that not all of them lose at the same time? And where can I find the right balance so that I stand to win in each trade individually? These are questions that intense demo testing can answer. Demo CFD trading platforms can be used extensively for conducting such tests, even more so for testing currency trading. In addressing what is forex in terms of flexibility and range of markets, the right selection of currency pairs to trade can lessen the risk on money management, so that not all trades will lose at the same time. It doesn’t make sense to trade only US dollar crosses, or exclusively Euro crosses. It’s much better to choose unrelated pairs. And that’s what testing will confirm, the overall risk for any given range of selected markets.

Trading Online Demo Testing for Hedgers

Trading online demo testing can be used successfully to test hedging trades. As well as ideas for recovering losses on open losing trades. CFD trading allows for linear, very good hedging of losing trades. All the trader has to do is figure out whether the price movement is a correction or major reversal. In any case, the right amount of hedging (which doesn’t have to be dollar for dollar), can limit losses and save the day. Testing can reveal the weaknesses of any trading system. Testing over a month or more will likely include volatile days, extreme currency movements and all kinds of scenarios. And this is where traders actually lose most when getting caught on the wrong side of a market. Because fear overwhelms them and they don’t know how to hedge an open loss. With the use of LSS pivot theory, weekly LSS that is, traders can figure out extreme price levels. Where a currency pair will likely stop moving for a while. LSS pivots cannot predict trends, but can predict momentum. And all it takes is little momentum with appropriate hedging, for any losing trade to be recovered. All these concepts can be fully investigated through thorough demo testing.