One of the first things I figured out on my own from trading forex it is that you have to find your own style and method right from the get go. One of the mistakes a lot of newbies seem to make is they try to clone someone elses style and method. More often than not it does not suit them so they get frustrated or change it to the point it doesn't work anymore (for them). By the time they conclude that they need to find their own style they are demoralized and it becomes more of an uphill battle.
You also have to decide (on your own) what rules to follow and what rules not to follow. For example, the J16 mantra is trade demo for 3months before getting a real account and only if you are making money after 3 months. I have no doubt that is what works for J16 and many other people. It does not work for me. Unless I am trading with real money it is a complete waste of time for me!
Same goes for back testing. I don't do it. You are only trading the past and there is no emotional aspect so it is almost impossible to emulate how you would trade in real time. A demo account is much better for testing new methods/techniques IMHO. If you are trying to accelerate the testing then use a lower time frame. But again, ideally you want to get to trading with real money as soon as possible. Even if it is just pennies per pip. At least that is what seems to work for me.
So my advice would be just trade demo to learn the mechanics of how to use the software and execute trades. You can also use it to test out new techniques/methods rather than backtesting which is a total waste of time in every way IMHO.
After a week or two you should get the hang of it. Once you figure that out get on a real account as soon as possible. The trick is (at least it was for me) to start out real small. You can get accounts that let you trade fractional micro units (I think that is what they are called) where the smallest unit size you can trade is $100. That translates to 1cent a pip. You can open an account for as little as $100. Leveraged 50:1 that gives you access to 5000 trading dollars. At 1 cent a pip you still have plenty of flexibility to use large stop losses without exceeding proper money management. $100 x 2% / (1cent a pip) = 200pips of stop loss risk. Most people can live with losing $2 on a trade without much stress. That is less than a Grande Mocha at Starbucks! They will still get a taste and that is the important thing. To get used to the emotions. As confidence grows you can add money (and therefore increase your bet size while still maintaining proper money management)to your account over time however you see fit. Simple!
There are some general rules most traders talk about which are good ideas though because they are not so much about style. Things like not falling into the trap of using indicators. They are only indicating the past which is like trying to drive using your rear view mirror. Even worse, they end up being a crutch. The tendency is that people start to let the indicators do a lot of the thinking for them under the guise that the indicators make their life easier. Combine that with the fact they are only indicating the past and you end up making more bad decisions.
For me, the best indicators are a raw chart and your eyes. That's it. I admit I do sometimes dabble in some indicator techniques that are considered somewhat forward looking. Fibonacci and Divergence in particular. Mostly as setup confirmation rather than trigger. But again, that is just me. YMMV.
You also have to decide (on your own) what rules to follow and what rules not to follow. For example, the J16 mantra is trade demo for 3months before getting a real account and only if you are making money after 3 months. I have no doubt that is what works for J16 and many other people. It does not work for me. Unless I am trading with real money it is a complete waste of time for me!
Same goes for back testing. I don't do it. You are only trading the past and there is no emotional aspect so it is almost impossible to emulate how you would trade in real time. A demo account is much better for testing new methods/techniques IMHO. If you are trying to accelerate the testing then use a lower time frame. But again, ideally you want to get to trading with real money as soon as possible. Even if it is just pennies per pip. At least that is what seems to work for me.
So my advice would be just trade demo to learn the mechanics of how to use the software and execute trades. You can also use it to test out new techniques/methods rather than backtesting which is a total waste of time in every way IMHO.
After a week or two you should get the hang of it. Once you figure that out get on a real account as soon as possible. The trick is (at least it was for me) to start out real small. You can get accounts that let you trade fractional micro units (I think that is what they are called) where the smallest unit size you can trade is $100. That translates to 1cent a pip. You can open an account for as little as $100. Leveraged 50:1 that gives you access to 5000 trading dollars. At 1 cent a pip you still have plenty of flexibility to use large stop losses without exceeding proper money management. $100 x 2% / (1cent a pip) = 200pips of stop loss risk. Most people can live with losing $2 on a trade without much stress. That is less than a Grande Mocha at Starbucks! They will still get a taste and that is the important thing. To get used to the emotions. As confidence grows you can add money (and therefore increase your bet size while still maintaining proper money management)to your account over time however you see fit. Simple!
There are some general rules most traders talk about which are good ideas though because they are not so much about style. Things like not falling into the trap of using indicators. They are only indicating the past which is like trying to drive using your rear view mirror. Even worse, they end up being a crutch. The tendency is that people start to let the indicators do a lot of the thinking for them under the guise that the indicators make their life easier. Combine that with the fact they are only indicating the past and you end up making more bad decisions.
For me, the best indicators are a raw chart and your eyes. That's it. I admit I do sometimes dabble in some indicator techniques that are considered somewhat forward looking. Fibonacci and Divergence in particular. Mostly as setup confirmation rather than trigger. But again, that is just me. YMMV.
