Forex data may either be used for forex trading, or for backtesting a forex system.
Forex Data For Trading
The forex data for trading will be provided by the forex broker or market maker that you choose to trade with.
If you’re learning a specific forex system from a forex course, then you may want to use the market maker that the course is based on. Some systems may not suggest a preferred forex broker of platform.
If however, the charting capabilities of a recommended market maker is not up to scratch, and you really do need a better charting package (which sometimes happens) then you can still get over this problem by using a more advanced charting package, which you will likely have to pay for, but which uses the same data source.
Some providers will list the various forex charting packages which uses their data source for you, and any costs to upgrade to that charting package.
Forex providers have these features:
1. Time frames for the data that are available, and how far back the data goes. This is not for backtesting but for trading as some systems require you to look back to price action 1-2 months ago, depending on the system.
2. Their charting packages and what you can do on them.
3. Their spreads for the currencies that you’ll trade, or are likely to trade in the future.
4. Any fees for small trade sizes.
5. Leverage provided.
6. Funds required to start an account.
7. Reputation and stability of the forex provider.
8. Whether you can have a demo account to practice on.
Historical Forex Data For Backtesting
Now on the other hand, if you want to backtest a trading system, then you’ll need software and a historical forex data source, that will enable you to program in and backtest your systems.
So if you need forex data for backtesting, remember to check out:
• Which data source the data comes from, in case you would like to choose a data source that matches that of the market maker that you want to trade with.
• Which currency pairs are available.
• How far back the historical data goes.
• What time frames are available to be displayed and analysed.
• Whether live updates of the forex data are available (they usually are).
Basically, you can either design your own system, or to learn a system that is already being traded.
Some people love designing systems, while most of us would rather trade a system that’s already been designed and shown to work.
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