The Investor Diary Entry #83: September 6, 2025
My journey in trading Forex is a personal diary of trial, error, and constant learning. In this entry, I want to document my experience with a specific tool that has become a foundational layer in my education: a free forex backtesting software. This is not a recommendation, but a log of what I am doing to understand my strategies and, more importantly, a crucial step on how to learn risk management in Forex trading.
Why I Added a Backtesting Layer
I have always believed that a demo account is a crucial step before live trading. However, I recently identified a gap in my process. A demo account runs in real-time, which means it can take weeks to see if a new idea has any merit. I needed a way to test concepts more efficiently. This is where the concept of backtesting entered my routine. For me, it acts as a preliminary filter. Any new idea—a new indicator, a rule change, or a completely different strategy—now goes through a backtesting process first. This allows me to quickly see how an approach might have behaved historically before I invest even demo account time into it.
Discovering an Accessible Tool
My search for a practical solution led me to a web-based platform. I needed something straightforward and without a significant financial commitment. The tool I settled on for this experiment is a free backtesting software called TradersCasa. The fact that it requires no download and offers a functional free version was exactly what I was looking for as a learner. It serves as my digital sandbox for testing hypotheses.
My Process for Testing a Strategy
Here is a step-by-step account of how I used this backtesting trading software recently:
- Setting Up the Session: I created a new session, naming it after the strategy I was testing. I selected the currency pair (EUR/USD), set a hypothetical starting balance ($1,000), and chose a start date in the past.
- Charting the Idea: The software loaded the historical data. I then applied the rules of the strategy I was exploring, which involved identifying key market structure levels. I meticulously drew the high and low of a trading range and used price notes to mark important points like an inducement level or a specific order block I wanted to watch.
- Running the Simulation: This is the most insightful part. I set the chart to play forward at different speeds. Watching the price action interact with the levels I defined provided immediate visual feedback on the validity of my ideas. A crucial tip I learned was to save my chart layout frequently, as the free version is ad-supported and interruptions can happen.
- Integrating Risk Management: This is where theory met practice. Before placing a simulated trade, I stepped away from the software to use a separate risk calculator. I determined that for my $1,000 account, I would risk no more than 0.5% per trade. By defining my stop-loss distance in pips, the calculator gave me the exact lot size to use. Inputting this calculated size into the trade panel of the backtesting software made the exercise feel real and cemented the habit of pre-defining my risk. This hands-on repetition is my current method for how to learn money management in Forex trading; it moves the concept from abstract theory to tangible practice.
- Analyzing the Outcome: I let the simulation run, observing whether the trade hit its take-profit or stop-loss. The value isn’t in one trade but in repeating this process over different market conditions. It helps me see the frequency of setups, the typical risk-to-reward outcomes, and the overall behavior of the strategy.
The Value of a Free Tool in Learning
Using this free backtesting software has been about education, not just validation. The limitations of the free version, like advertisements and a limited data history, are a fair trade-off for the functionality it provides at no cost. It allows me to fail fast and learn faster in an environment with no financial consequence. For those looking to explore similar tools, the one I’ve been experimenting with is available online. I found it useful to see the developer’s overview of its features on their official page.
Conclusion: A Step in the Learning Process
This software is not the final step in my preparation. It is the first filter. By using it, I can quickly discard fundamentally flawed ideas and only take the most promising ones forward to my demo account, where the next challenge—trading psychology—awaits. This free forex backtesting software has become an indispensable part of my learning diary, providing a structured way to test, learn, and ultimately understand the intricacies of strategy and risk before any real capital is ever on the line.
The Investor
Saturday 6 September 2025
About The Author
I started to look into individual stocks in January 2022. I created this diary initially for myself to track my investing progress, and second, as a place where I can share my ideas publicly hoping that others will share their ideas and learn from each other, and lastly as an online business where some links that I share are affiliate links, and if anybody bought anything by clicking those links, I will get a commission based on that successful sale, which of course will not affect the price that you are buying the product or service at.
This blog is also part of something else I’m learning: blogging. I’m using a platform to learn that part. And if you’re interested in that it is called Wealthy Affiliate, look it up.
For more detailed information on my affiliate disclosure, please refer to the Full Affiliate Disclosure page.
Furthermore, this site is in no way or form giving any financial or investing advice, nor is it encouraging or discouraging people to buy or sell any financial instrument. This is a personal diary in which I track my own progress and share it for informational, educational, and entertainment purposes.
I find this very encouraging to read as someone who is curious about Forex but feels nervous about risking real money. What stands out to me the most is how you use backtesting as a “first filter” before even trying a demo account. That approach makes a lot of sense; it feels like a safer way to practice and catch mistakes early without wasting weeks waiting for real-time demo results.
I’ve been hesitant to dive in because the thought of losing money (even in a demo) feels intimidating. The way you integrated risk management into your backtesting process really resonated with me. It makes the whole experience feel more like training for the real deal rather than just running experiments.
Do you find that the patterns and insights you gain from backtesting translate well once you start demo trading? Also, how much time do you suggest a beginner should spend on backtesting before moving on?
Thank you for sharing your process; it makes Forex feel a bit less overwhelming for people like me who are just starting to explore it.
Hello Alyssa,
I think a little bit of intimidation is beneficial. It is like when going on stage, A person who has that worry will excel, while a person with all the confidence in the world might hurt performance.
Regarding your question about time to spend on backtesting. I don’t think the factor is time, I think the factor is trying out different scenarios and different timeframes to get the experience, know the mistakes, make adjustments, and realize the profitability.
In my case I was not checking profitability, I was checking the logic of the newly found trading plan, and making adjustments as I go on and based on the results that I am getting.
Profitability I am checking on the Demo account.
I think each case is different. Backtesting is the simulation lab. A person will decide what he/she is testing.
This is an interesting breakdown of how you’re using a free backtesting tool as part of your learning process. I definitely see the value in testing ideas quickly before putting them on a demo account, but it makes me wonder—how reliable can results from a free backtesting platform really be when compared to paid, more data-rich software? Historical simulations are great for filtering out obvious flaws, but markets are so dynamic that I question how much of what “worked” in the past can actually be trusted to perform in the future.
I also found it noteworthy that you’re combining the backtesting with strict risk management rules—that’s something a lot of beginners overlook. At the same time, does relying too heavily on simulated environments risk creating a false sense of confidence once emotions and live conditions enter the equation?
Hello Jannette,
Thank you for your questions. Regarding the features of a free backtesting software, you can try it, if you need more features that are not available you either search to see if the same platform has your needed features, or shop somewhere else. It is all about what you need. For me, this platform free version covered it for me.
Regarding past and future. For me, I just go several months ago to test a trading plan. The market dynamics does not shift so drastically in few months. The dynamic shift where a trading plan that used to work, but now is not working takes decades to materialize.
Regarding confidence. Well the whole purpose of backtesting and demo account, is to trust your system.
That is just my opinion
Thanks again.