Engaged in active trading of binary options, each investor feels the moment when he can, thanks to his skills and professional experience, create his own strategy for forecasting the market and making a profit. Yes, with an experienced professional, creating and developing a system does not cause complications. For novice investors there is a certain list of problems in this matter: from the choice of analysis tools and identification of effective technical laws of the market to the testing of the strategy. It is the last issue, verification of the effectiveness of the author’s strategy, we will devote our material.

How to test the efficiency of your binary options strategy

So, how to test the effectiveness of your own trading system? Immediately there is a completely logical option: to try trading under the rules of the system on your own investment account. But here you must understand that if the tools of the system are ineffective and its rules you can get substantial losses. Such risks are not worth a single trading system, as the calculation and definition of each indicator will take place with a decrease in the volume of operating capital.

We offer a simpler and more effective way of testing your own strategy – a demo account. This format of trading operations is offered today on most platforms of binary brokers and allows you to determine the effectiveness of the trading system without losing real trading funds. To get at your disposal an effective service for the test, pay attention to such technical parameters of the simulator:

– algorithm for constructing quotations – the service must offer real market quotes, rather than graphs with artificial indicators;

– the availability of analysis tools that you need to build a system;

– the number of available assets – this is necessary to determine the universality of the trading strategy;

– a list of technical settings for the asset schedule. In systems, traders often use a variety of charting modes, time periods for building quotes and other parameters;

– the presence of market history is the main condition for determining the overall effectiveness of strategy signals.

As a variant of a quality and professional trading simulator for testing trading systems, it is possible to offer a service from a licensed company, where investors are offered a demo account for training on a real trading platform, the technical performance of which fully meets the above requirements.

In addition, the distinctive feature of this service is an unlimited amount of virtual funds (the balance of the academic account can be replenished on a permanent basis) and completely free access to the simulator.

So, how do you test the effectiveness of the system in practice? To do this, let’s take a simple example based on two moving averages.

To determine the effectiveness of strategy signals, use the story of the movement of quotes. To do this, we rewind the schedule and count the number of system signals that provided the forecasts confirmed by the market.

Thus, you can compile statistics on the effectiveness of strategy signals and determine the conditions under which the strategy tools generate incorrect forecasts for binary options. And, mind you, for this you will not spend a cent of your own funds.

Let’s continue. Using market history, one more important technical indicator of a binary contract – expiration – can be determined. To calculate the optimal time range of the option’s action on the history of market fluctuations, calculate the average number of candles of quotes that are formed between the signals of the strategy.

Having determined the necessary indicators for the work of the strategy on the market, you can proceed to the practical test of the strategy in the conditions of trading on the market. To do this, use the rules of the system: draw up contracts in a virtual account and analyze the statistics of trading operations, which on professional trading platforms has a format that is most convenient for analyzing errors and making more accurate tool settings.

As you can see, when using professional commercial and technical services, the issue of testing the system and determining its effectiveness is not difficult and takes place in the simplest and most comfortable mode.

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“General Risk Warning: Binary options trading carry a high level of risk and can result in the loss of all your funds.”

How to check the efficiency of your binary options trading scheme?
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