Any source of currency trading info will tell you you will need to test a currency exchange system before you go live but how precisely are you able to do that? The truth is that you need to do it in more than one way. Historic charts are provided free on many fx trading information websites.
It is critical to apply the rules of your system in a realistic way when back testing. So as an example, if you are using an EMA crossover system, you may spot a crossover on a past chart that was followed by a two hundred pip rise. Do you write down that you would have made 2 hundred pips from that trade?
No, it is probably unrealistic. First you may have spent a minute or 2 checking the signal against other time periods or other indicators. Most systems need you to do that.
Then you’ve got to think about where your stop-loss would be and whether there were any fluctuations that would have caused your stop loss. Ultimately, consider where you would have closed the trade. If your system aims for a hundred pips profit per trade, you would have closed at that point and missed out on the remainder of the price movement. If your system involves closing half of a successful trade, you will calculate what your actual profit would be, applying that method.