Best Forex Backtesting Software Comparison

if you've been watching my videos you probably know which software is my favorite manual Forex back testing software but I want to find out is there a better solution out there I've been using the same software for years and I haven't really paid attention to what's out there so I wanted to find out is there a new software that's better or is there an existing solution that has improved significantly so in this video I round up all of the manual Forex back testing software solutions available I'll test a strategy that I've never tested before I'll show you the results of the testing and I'll show you my pick for the best software available right now [Music] all right here are the ground rules for this test my notes here just in case you're wondering when I'm looking at just so I don't miss anything so the first thing I'm going to do is I'm going to take a trading strategy that I found on the Internet what I want to do here is I want to simulate what the typical aspiring trader will have to go through when they're testing a strategy so I'm gonna find something on the Internet I'm gonna give you the complete rules a complete trading plan of how I'm going to test this then I'll test that trading plan on each software individually when I'm done with the testing I'll show you my complete results from each of the software products and how easy it is to get that information from there there are five categories that I'm gonna rank each of these software products in I'm gonna rank all of them from top to bottom so you can see which one was the best and which one was the worst in each category all right now how did I choose two software products well there were some criteria I wanted to choose products that would be accessible to most people in the world most beginning traders and wouldn't cost an arm and a leg so here was the criteria first it had to cost less than $200 in total or $200 a year if it was a subscription product next I'm looking at manual back testing software only third it has to be forex specific so can I back test Forex currency pairs with this software so those are the three criteria that I used to pick the software now let's take a look at the contenders all right here are the software products that I'm gonna be testing first one is Forex tester it's a paid one-time fee meta tutor is free with trading view I'm going to be testing both the paid and free plans there's gonna be think trader soft forex ninja trader and Excel and you're probably wondering why I through Excel in there and I'll explain that in a little bit now keep in mind that I'm not going to be able to show all the details of all the software in this video because it would make it way too long but keep an eye out for individual videos where I test all of these software in detail and I give you the mini Gritty of how they work but for this test I'm going to show you some clips of the software in action then I'm going to give you the highlights as they apply to the five categories and the rank all right so here are the categories ease-of-use value for money data availability usability for manual back testing and Best Overall software a software could be easy to use but it might not be easy to use for back testing that's why I have the differentiation there all right now before I get into the Train strategy let's take a look at how I found this strategy all right so I simply went to Google and I googled moving average crossover Forex and I want to see what comes up so as you can see we have this article here and then we go down to this one and I don't see the one that I actually found the first time so let me see if I can find that that was on daily effects it's no longer ranking number one okay so this is the one that was coming up number one before and this is the one that I used so its trend trading rules with moving average crosses so from that blog post it's a moving average crossover strategy it's using the 250 simple moving averages when the 50 crosses over the 200 you enter immediately in the next candle your stop-loss goes on the other side of the crossover point on the other side of the 200 and then you do you take these trades on the daily chart now what this article is missing were a few key elements so this is a good point here to talk about not everything that you read on the internet or you find on YouTube or whatever is a trading strategy right it's usually a just a trading idea it's a training concept but it's not a full-blown trading strategy because you need for a trading strategy you need to know where to exit you need to know the risk and you need to see some testing around this idea but this is just a trading idea so what it left out was to take profit trade management and the risks so I'm gonna put that in myself in this case I'm gonna do take profit when the price closes on the other side of the 50 because this is supposed to be a trend following strategy so I'm assuming that that's the best way to do it and then it's gonna be set and forget so there's no moving to break-even no adjusting stuff once you enter it that's it it's done and then finally 1% risk that's just an easy place to start and then I'm gonna be testing this on the euro US dollar daily chart only alright before I get started just keep an eye out throughout this video because I'm gonna be giving you some tips on how you can speed up your back testing process and get more out of your back testing alright so first up it's ninja trader and this is ninja trader 8 and keep an eye out in the upper right corner because that's gonna show the total elapsed time for each test and this can help you understand the efficiency of the software but the total time is not going to be totally it's not going to be the total picture of how efficient the software it's so stay tuned to the end of the video because that's where I'm going to break down the overall efficiency of each of those software products all right here's ninja trader 8 and this was the back test [Music] any ideas next up is soft 4x and soft 4x is interesting because it's a plug-in to metatrader4 it's an EI an expert advisor and you just put that in 74 and it gives you additional back testing functionality so this is gonna be a cool comparison using soft works or metatrader4 and comparing that to metatrader5 now i bought the full version with my own money because that's what i needed for this test i couldn't use the demo version the free demo version only allows 5 trades if you're finding this video useful a thumbs up in the video is always greatly appreciated if you want to get more videos like this to help you improve your forex trading skills head on over to my channel subscribe hit the bell so that you can get updates also consider going over to my website trading heroes comm /resources and that's where I put all the best resources that I find while I'm training so that will save you some time you don't have to test all this stuff out yourself because I'm testing it for you and if you buy through those things I do get a small Commission but that supports the channel that supports the website that helps me create more videos like this and it does take a lot of time and some money to create these videos so your support is always greatly appreciated alright here's the test [Music] [Music] all right next is metatrader5 as you probably know a meditator has been pushing traders to use metatrader5 instead of meditator for they've stopped support for metatrader4 but in reality a lot of people still use meditated for because that's what all the ears are built for a lot of brokers still offer metatrader4 so negative 5 is not quite as big as metatrader4 has been so I just wanted to test it out to see if it is a viable back testing software it's free obviously so that's a good thing and however you do have to create a spreadsheet to track your trades in my traitor 4 I may have 2 to 5 because they don't have built-in doc testing functionality so that brings me to of that testing tip when you're using a software product like meditator 5 or men trader 4 or a ninja trader or anything else that doesn't have built-in back testing functionality and you're gonna have to create your own spreadsheets to do that and it can be time-consuming can be a little tedious to fill out the spreadsheet but it is necessary to figure out your winrate to see the dates that your trades were taken and important information like that so when you're filling out of spreadsheet I find it most useful to use only the last four digits of the price so you cut out the bigger the big figure and then you cut out the pipettes at the end and just use the four digits and that will make it easier to fill out your spreadsheet and it will speed up the process now there are some times when you will have to use the whole number because the big figure changes and if that happens then go ahead and do that use the whole price but I found that as a shortcut it's best to just use the last four digits and that will really speed things up I find that you know 90% of the time you won't have to use the whole price and that can cut down on data entry errors fat fingering and stuff like that so that's a tip for you to speed up your back testing here's the test next up is the free version of trading view and as you probably know I really love trading view for live trading charting I think it's the best software out there but does it work for manual back testing that's the question so I tried the free version and this is what I found all right here's another useful tip for back testing I found that if I use a couple of tools it really speeds up the process so the first tool that I want to share with you is this mini keyboard they're not expensive you can get them for I think it was like $15 or something like that at eBay or Amazon and they have a little touchpad over here or whatever and you can use the keyboard obviously you're not going to be typing cuz that's that's like a blackberry days but what you can do is you can't program some of these software products especially forex tester and you can program the pause and play button into the keyboard you can you can program in closed positions you can program in moving one Ford one can't afford one Cal go back and that really frees things up because you're not always on your keyboard like this you can have this in one hand you can have your mouse in the other hand and you can kind of speed up the process doing that so I found that really useful because with the keyboard you're always kind of like you know here here here here and then with this you can just kind of move your finger and it's it's a much much less effort and it can really make things more efficient the second thing I would recommend is a multi button Mouse so that you can program those buttons to do certain things and it really can speed up the process when you're back testing so I used this trackball I know that seems a little old school but I really like the trackball the trackball really helps a lot and this mouse has let's see one two three four five six seven buttons plus the scroll wheel and the ball on the top so the most useful thing is the scroll wheel because you can not only go back and forth with a scroll wheel but it can go up and down so that when you're on the charts you can move the chart this way in that way and then also expand and contract or zoom and make the chart smaller so that's an easy way to analyze the charts quickly and save some time additionally you can program these buttons do other things you can program in a closed alt all trades that's useful when you're back testing obviously if you have a set position size you can program one of the buttons to do a set position size so it makes it really easy to speed up the process according to how you're testing and what your strategies are all right this is training view free manual back testing [Music] any ideas next up is a piece of software that you might not know too much about but it does have some benefits it's called pink trader and it used to be known as trade interceptor if you've been following me for a little while you probably know that I did a review on trade interceptor back in the day and I did a review on the mobile version that wasn't very useful for rat testing back then I don't know if it is now but I'm testing the desktop version of thing trader and thing trainer is cool because it's free totally free and it works on multiple platforms which is really nice and that's something that I wish other software would do but not all software works on a Mac but pink trader does have a Mac version so if you're finding this video useful a thumbs up is always greatly appreciate it and remember to subscribe to get more videos like this so here's the complete test on think trader [Music] [Music] [Music] [Music] [Music] [Music] next on the list we have the paid version of training view now I use the pro plan for my trading and my charting and I really like to solve for it here's another back-testing tip be sure to keep a separate spreadsheet of all your back testing results so you have your system the currency pairs that you tested the return the win rate and any other metrics that you want to track this is very useful because you can add it all up at the end you can see the cumulative results and you can see if it's worth going forward with that system and if it's not then you can test another idea so make another version right and then test that idea also and see how that pans out and every time you create a new test you should record it on the spreadsheet and this will give you a good idea of what's working what's not because sometimes you can start trading something and it's working out and then you want to come back to it maybe six months to a year later and you want to optimize it a little bit and play with some ideas but if you don't have any records with what you tested already and how those tests went then it can be really hard to rebuild that data and figure out what you're thinking at the time so this saves a lot of trouble and it can go a long way to helping you improve your system all right here's the test with the training view pro plan all right so this is Forex tester for this is my go-to software I've been using this software for ever ever since version 2 and I just wanted to see how it stacks up against the rest of the competition so I'll see the complete analysis for towards the end of this video when I do the rankings but I want to give you a back testing tip in the meantime some people ask me can you really trust the back testing results because there are no emotions involved and in lab trading there Robie emotions right when the price goes out price goes down you're losing one of your Reiki money it's this emotional rollercoaster for beginning traders so can you really trust the BAP testing results well here's the thing back testing results will give you a good foundation of what might work in the markets and it's true that there won't be any emotions involved in bat testing but that's the point you want to take emotions out of it because when you go into demo trading or live trading you want to be able to see okay is it my strategy that's not working or is it my emotions that are messing things up and my taking profit too early am i moving my stop-loss stuff like that and in that destiny you can take the emotion out of it so you're just analyzing the system itself does that strategy have an edge or not and once you figure out okay this probably has an edge based on historical testing then you can put it into demo trading and then your emotions come into it and then you can put that together with the system itself but if you're trying to analyze two different things at the same time then it can be difficult to figure out which one is causing the issues or if there's a edge at all with the strategy right so that's why we do that testing it's not the end all and be all it's not going to guarantee success but it will give you a better picture of if you have an edge with your strategy all right here's the test [Music] all right before I get into ranking the sulphur products let's take a look at the testing results and see if this is a viable trading strategy now keep in mind that we tested it on the stand currency pair but with the different software products different data sets from different brokers so we're gonna have a really good idea if this strategy has an edge or not all right here are the results from the moving average crossover strategy so we have ninja trader with 50% win rate a thirty eight point four percent return and a thirty and thirty two trades of training view free 38.6% a return of twenty four point nine percent and one hundred and two trades and I'll get into why that could be in a minute soft Forex had a win rate of twenty eight percent a return of sixty one point eight percent and twenty five trades and think trader had thirty nine percent win rate return of sixteen point seven percent and twenty three trade so if we exclude trading view free there's between 23 and thirty two trades so that's in the right ballpark and I would consider that data valid however trading view free had a hundred and two trades and the reason why it has so many trades I believe is because it was using a line chart and theoretically if you're only using the closes like you do on the candlestick chart then I would expect a similar number but this test took way longer and there were way more trades but it was still profitable and the win rate was kind of in the ballpark of the other tests that we did so that would that's something that would have to be tested again but obviously we're not going to test up because trading view didn't have candlesticks and we want to compare apples to apples so this isn't really an apples to apples test but I wanted to see how it would do another thing to notice here is that since there was such a wide variety of results which ever back testing software you use you should be able to import different data sets so you can find out how your strategy works with other broker feeds and if they're pretty similar then you have confidence that you can move forward okay now let's go on to the next set of this is forex tester for with a win rate of 33% and a return of 15.2% 21 trades metatrader5 46.1% win rate return of 33 points 6 percent and 26 trades training view paid 47.1% win rate and a return of 34.4% with 21 trades so as you can see these tests also had about 20-25 trades so that seems to be about normal and keep in mind that this was just my first pass at these tests and maybe I made a mistake somewhere so I would have to go back and take a look at why there's such a big difference and it could just be that I missed a couple runners that would have increased my return so it's good to compare your results with at least a couple of data sources and this these results illustrate that so what I consider this test successful yes I would all of the tests were profitable to varying degrees so now I'm just a matter of going to the data checking out the trades maybe I missed a few trades here and there maybe there was something about the data that was different maybe some of the settings were off and just going back and double checking and this brings up a good point you can't just test once and expect that to be the definitive test of that strategy you might have to test it two or three times just to double-check your results think of this is like a scientific study you want to be able to reproduce the results consistently and when you can do that then you're sure that the data is legitimate and you can also test this on lower timeframes and you can experiment with things like pyramiding or adding multiple positions to your initial position to magnify the win so if the strategy appeals to you then go ahead and test it more in-depth yourself because personal experience is much more important than the experience of another person you might view the markets differently you might see things that I don't see and I might see things that you don't see so it's really important that you do the work yourself you cannot rely on other people's tests and if the strategy doesn't appeal to you then great throw it on the side and pick up something else the important thing here is to learn the process behind the testing and how to verify if the strategy has an edge or not and then move forward with it from there too many traders just jump in with a strategy that they just learned on a blog post they don't know how to test and they wonder why they lose money so as long as you understand the process it doesn't really matter what strategy you use just find something that works with your personality all right now here's what you've been waiting for the software rankings in each category before we do that however let's take a look at the efficiency of each test now I mentioned that the timer that you saw in the upper right corner might not be a true representation of how efficient the software is so this is how I'm going to measure the efficiency I'm going to take the number of days tested in the historical data and divide that by the amount of time it took to do the test and that will give us our efficiency in days tested per minute so when you measure things in this way soft forex comes up as the number one most efficient testing software all right here we go overall ease of use I'm gonna go from number one to number seven and explain why I rank them in this order so number one is trading view paid trading view is such an easy platform to use you can use it on a browser you don't have to install any software here you don't have to worry about Mac Windows or Linux it works on all of them and the charts are just so key smooth it's so easy to work with it's great so training to be paid would be number one for me Forex tester for would be number two metatrader5 would be number three I think trader would be number four soft 4x would be number five and soft forex is relatively easy to use but keep in mind that it's a workaround on metatrader4 so there are inherent things that it can't get around that you really have to do an extra step and then I have trading view free in the number six position and I have it there because you can't do candlestick patterns on the free version and you always have ads popping up and stuff like that so it's really not usable for back-testing in my opinion if you're gonna go with a free option you're better off with metatrader5 and then number seven is ninja trader eight and I swear ninja trader eight is like using software from the 1990s it still has that old-school Windows mentality and it's just really clunky and it is an upgrade from ninja trader 7 I'll admit that but it's still really difficult to use so overall ease of use those are my rankings the next category is value for money so I'm sure you're really interested in this one so let's get to it number one I believe that soft forex is the best you for money yes it's a paid product but I believe that the amount that you pay really does make up for time saved being able to get different data sets being able to use metatrader4 indicators to do your testing and it's just overall the best value next I would go at Forex tester for very similar capabilities much more integrated much smoother experience but it does cost more so I think soft Forex does edge out for access therefore in this category and you can get Forex Esther for about 139 dollars when they have it on sale so if you want to get that link it's provided here that will give you a discount on for access tour for but even at that discounted price it's still a little bit more expensive than soft Forex so that's why I put soft Forex number one number three for me is think trader and think trader is free but you can only use one data set and the instructions aren't very good so you know it's okay it works on in multiple platforms which is cool but if you're talking about time saved you're not saving a whole lot of time compared to the first two but it does save you time compared to the rest of the list next is metatrader5 obviously free solid platform the only issue is that you're spending more time filling out the spreadsheet and then that's going to slow you down and it's also gonna lead to fatigue and possible errors so that's why I have Medicare five and then number four position and then number five is trading view paid and you're paying for that but you also have to fill out a spreadsheet like with metatrader5 so it's not such a good value and then you have ninja trader 8 and then trading view free and number six and seven were close I would almost make it a tie but ninja trader 8 is a little bit easier to use in that they don't have popup ads and they don't limit you to on just a line chart like the free version of trading view so that's the only reason why it edged it out at the bottom okay now let's get into data availability how easy is it to load data into the software and get additional data sets number one is Forex tester for they make it super easy to download data from multiple brokers you can just sign up for their data service for one month download all the data and quit or you can keep going with it but that will cost you extra so that's a great thing to have and it's the only service on this list that allows you to do that the other ones have some broker downloads but it's only one or two services for accessor provides multiple services so that's the reason why I chose Forex tester for as the number one choice on this one next would be trading view paid there are quite a few data sources not as many but at least you have some options there I think with Forex you can do fxcm sexo Holanda and maybe one more that's legit that I would actually use for testing so that's a good option also at the number three position is trading view free again you have similar data downloads but you can't upload your own data sets and that makes it a little restrictive okay at number four we have soft Forex and you can upload data but you're gonna have to find the data separately you can upload the data into mp4 which is really nice and then you can use empty for indicators with your testing which is also really useful so number four is soft Forex number five is mt five similar deal here you can upload data from different data sources but you also have to find those data sources on your own so it's a little less useful in that respect okay and then NinjaTrader number six they do have a data download and you can upload your own data sets but the interface is really clunky and I had the hardest time getting the free data from them and getting it to work so that's why I have ninja trader at number six and then number seven is think trader because you can only have one set of data and there's no flexibility to upload other data sets so that's why I have that one last all right usability for back testing how easy is it to use this software for back testing overall ease of use is one thing but usefulness for back testing is an entirely different thing so here we go at the number one spot I have 4x tester for it just has everything nicely integrated the data downloads the charting is similar to md5 but then you get all these other features for back testing it tracks your trades you get the trade reports and you can see your stats so that's why I have for excessive for as number one pick number two is soft Forex and like I mentioned before soft Forex is a really nice piece of software I used it way back when it first came out and it was just total crap you couldn't use it but now they've made a lot of updates and this is a very usable piece of software I really like it the only issue here is that it's a little clunky to use because like I said it's a empty for workaround so you have to take extra steps here and there and that's fine if you're on a budget but if you really want something that works well right out of the box then I think Forex tester 4 is the way to go another thing that I noticed on soft Forex is that if you close it down and then you open it up again it won't open up to the spot where you were at the last time and for excess turf or does that so I lost a ton of data with soft Forex and luckily I had the information saved somewhere but if I hadn't saved it then I would have lost all that data so that's another reason why soft Forex is number two then you got think trader I think trader is a nice back testing platform and the fact that you can install it on mobile you can install it on desktops it works for Mac Windows and it's a little light on the tutorials I wasn't sure how to use it and I had to Google a lot whereas the other software programs are very intuitive I think trader is not so that's why it's number three but it is a nice piece of software so that's an option that you might want to check out number four is training view paid and like I said it's the easiest software to use but not for back testing because you have to still use a spreadsheet and that's a little clunky but as that type of software goes it's the highest ranking at number four then you have empty five it's easy to use not quite as easy to use as training view paid but it does have some nice features and you still have to use the spreadsheet number six is a ninja trader eight and I think ninja trader 8 is actually a good automated back-testing system at least that's the way it seems to me I haven't actually used it for that but for manual back testing it's pretty crap and then last is trading view free for the reasons I mentioned before you get the pop-up ads you can't use all the functions so it's really not usable here we go these are my rankings for the best overall manual Forex back testing software at number one is Forex tester I still like that it's so integrated it's easy to use you can download data from the Forex tester database and you can upload your own so it's really flexible it's nicely laid out and the only real downside to Forex tester for is that you can't use metatrader4 and metatrader5 indicators directly in the program but you can get them converted through certain services and that's not difficult to do but they have a pretty good library of pre-installed indicators that will work for most traders okay number two is soft Forex and software it's really surprised me like I said I used it way back when and it wasn't very good at all but they've done a lot of work on it and a great piece of software I was really surprised I liked the fact that you can use empty for indicators you can upload data on your own through mt4 and it records your trades like Forex Esther for does billing downsides with it or that it's a little clunky and it loses data if you don't save it's like those old Word documents where if you didn't save it like every five minutes something would go wrong and you lose all your writing and so that's a similar situation with self Forex but otherwise it's a great piece of software and I'm gonna be using them more often and one thing that excites me about this is that I could possibly use empty four on my Mac by installing wine and then installing mt4 on wine and then putting soft Forks on there now I'm not sure if that will actually work but it's a possibility and I'm gonna try it out because then I could just take my Mac with me do some testing and I wouldn't have to have my Windows tablet on the side and I just I want to get rid of as much of Windows software as possible and Forex tester 4 is the only thing that's holding me back from being totally Windows free so that's a possibility but forex esther 4 is still the best software so i'm gonna have to keep with us around for a little bit longer so those are my top two choices and they are head and shoulders above the rest of the field when it comes to manual back testing so i just want you to know that but at number three is trading view paid nice piece of software like I said just not very good for manual back testing but very good for everything else then I have empty five similar complaint there solid piece of software I just don't like the fact that you have to install stuff and files tend to get RUP did with Metatrader so that's why it's not as good as trading view but it is a nice piece of software if you're in a pinch and it's also free then I would say think trader would be my next choice just because it's not so intuitive and there's only one data set and that's not acceptable for true back testing and then finally at number 6 I would declare a tie between ninja trader 8 and turning view free and they're just not usable as manual back testing software like I said ninja trader is probably good for automated back testing but when it comes to manual back testing it's just not acceptable in my opinion when there are much better options out there as you can see it took a while to do this video but it was great for my education and I hope it was good for your education also so if you want to support the channel subscribe like this video and head on over to training heroes com4 slash resources and that's my complete set of resources that I've tested personally and I like and I use while you're over there you can pick up my free beginner's training course and a bunch of other free resources if you want to learn how to do this complete process from back testing to for testing to lab trading and going into lab trading with confidence then sign up for trader evil it's my paid monthly program and I hope you personally build the skills and I walk you through each step of the process and answer any questions that you have you can see what I'm testing you can see what other people are testing and it's a great way to have a community that helps you build your strategies build your confidence and build your skills thanks for watching and here's the next video since you made it this far you're probably wondering what happened to Excel well Excel is not a valid manual back testing platform and it's because there's no charts you're just looking at numbers and it does work for testing automated strategies and keeping your back testing data but it's not a back testing platform in itself and I see some people on the internet saying oh it's a valid back testing a manual back testing platform and that's simply not true so if you see anyone talking about that then send them over to this video and it's obvious that you do need a chart you do need to practice because back testing is not only testing it's about practicing a strategy and you simply can't get that in Excel all right here's the next video you

Channel: Trading Heroes

Views: 21,377

Keywords: forex, trading, trading heroes, best forex backtesting software, backtesting, forex tester, soft4x, thinktrader, ninjatrader, mt5, mt4, tradingview, manual backtesting

Id: BRwburzyYNQ

Length: 44min 10sec (2650 seconds)

Published: Tue Apr 28 2020