The Use of Forex Historical Data in Forex Trading
The beauty of the forex industry lies in the number of spin-off services that could be provided to traders. One of these value-added services is the use of forex historical data. Historical data in forex can be used in number of ways, but the primary use of forex historical data is in the back-testing and evaluation of forex trading strategies.
Why do traders use forex historical data to back-test and evaluate strategies? The essence of using historical data may be simply to find out if a particular strategy will be able to hold up against the previous price action, thereby making it possible to use such a strategy to trade the market going forward. So the role of historical data in trading may be summed up in one sentence. Historical data are used in developing, backtesting and evaluating trading strategies to determine their efficacy and suitability for use in trading forex.
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