They are several methods used to determine and test the effectiveness and quality of a forex robot used in trading.
Back testing can be defined as a means or method of testing the quality of a given forex robot. This method is a process of running a forex trade robot against past price data by nourishing the historical data directly into the forex robot. This forex robot in turn develops each new currency or commodity price by either opening, closing or modifying the trades.Most forex robots have in built back testers that can be used by any forex trader.
One of the best ways to checkmate and develop the performance of a forex trade robot is to test the software’s entry positions. A forex robot should be able to fully enhance the functionality of an entry before considering the exit. There is a lot of difficulty seen in testing only the entry positions. If the settings of how a forex robot opens a particular trade is changed, it leads to different entry prices. The problem encountered here is that the previous exits will be operational on trades that where opened at diverse times and in different prices. This singular act entirely changes the dynamic of the forex trade robot.
The only way to overcome this problem is quite modest. In other to test only the entry of a forex robot, a forex traders should be able to transport the stop loss values way out and simultaneously exit every trade at the same and specific time.
The main function of an entry is to get the trade ongoing in the right direction while that of an exit is to maximize trade profit for the forex trader. An exit test has the capacity to measure the price action for the whole section of all trades, it also locates the uppermost possible profit and evaluates it to that of a closed profit.
This mean that for every trade that is carried out, a forex trader can discover the point in time when the trade was most lucrative and then relate it to the real exit price. For instance, if a trade can exit at its peak profit, then the exit quality will range at its 100 percent. This exit test helps to determine the exit quality of every trade which gives rise to the general exit quality of the forex robot.
CURVE FIT TEST
A curve fit test has the ability to differ the inputs of a forex robot and checkmate how extremely the changes in input affects and changes the output result. A substantial input verses output change indicate that the forex robot is profound to new and diverse input but if a forex robot is keen to new inputs, it won’t have the same performance in the future as it had in the past.
In conclusion, it is very important for a forex trader to test run a forex robot for quality, efficiency and effectiveness before its use. Some forex robots are the main cause of failure and disaster in forex trading so, one should be careful in the purchase and use of these automated trading software.
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