Forex Trading Simulator

Forex Trading Simulator

This forex trading simulator demonstrates the performance of a forex trading system whose past accuracy and payoff ratio (avearge win/average loss) are known. The simulation is based on the following assumptions:

1. The long-term accuracy of the trading system (as seen over a few hundred simulated trades) will stay close to its past accuracy, while the short-term accuracy will vary.

2. The risk and reward parameters will be the same for all the trades, leading to a fixed payoff ratio.

3. The trader will take all the signals that the trading system generates (the trader has a high level of confidence in the system).

4. The outcome of any single trade is absolutely random; the probability that it turns out as a profit or as a loss is controlled by the accuracy of the trading system.

The calculator is made up of three parts which are described in detail below:

1. Controls & Performance Panel

The controls panel allows you to set the parameters that will guide the simulation. You can change all the cells on the controls panel that are coloured in red. Enter your trading system and money management system constraints on the System Controls panel. The Account Controls panel allows you to specify your starting account balance, the target return and if the profits are withdrawn during the course of the simulated trading. The values that you enter on these two controlling panels are used as the inputs for the generation of the trading results shown in the Simulated Account Activity Report, located at the bottom of the page. The information in this report is processed to calculate some of the common trading performance statistics which are displayed on the Performance Panel.

The statistics are generated for two different time periods - for the time period prior to the achievement of the target return (the "Pre-Target" column) and for the whole period of the simulated trading (the "All" column).

The simulator will automatically recalculate everything each time you change one of the controlling cells or press one of the Recalculate buttons on the page.

2. Performance Charts

This section includes two interactive charts which plot the values of the equity and the drawdown by using the data in the "Equity" and the "Drawdown" columns of the Simulated Account Activity Report.

3. Simulated Account Activity Report

This part of the calculator provides detailed trade-by-trade report of the simulated trading. The returns are divided into two columns (for easy viewing) depending on if they are profits or losses. The Equity column shows how the equity develops with each trade and profit withdrawal (when applicable). The Withdrawals column displays the size and the timing of profit withdrawals which are made in accordance with the settings chosen on the Account Controls panel. The Drawdown column measures the distance of the current equity position from the preceding equity peak (when it's below the peak).

Control Panel
             
             
  System Controls          
  Past Accuracy        
  Payoff Ratio        
  Mathem. Expectation        
  Percent Risked        
  Math.Exp.*% Risked        
  Win (%)        
  Loss (%)        
  Exp # of trades to TR        
  Account Controls          
  Starting Balance        
  Target Return (TR)        
  Profit Withdrawals        
  Size of Withdrawals        
  Every % of Profit        
  Every # of Trades        
             
             
           
Performance Statistics
             
             
   Performance Pre-Target All      
  Actual Accuracy      
  Total Profit or Loss      
  Percent Return      
  Max Drawdown      
  Max Drawdown in %      
  Drawdown Time      
  Number of Profits      
  Number of Trades 100      
  Max. Consec.Profits      
  Max. Consec.Losses      
  Total Withdrawn      
  Lowest Account Value        
  Highest Account Value        
  Max % Drawdown      
  Reward-to-Risk Ratio      
             
             
Performance Charts
           
             
             
             
             
Simulated Account Activity Report
             
           
Return Profit Loss Equity Withdrawals Drawdown
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