3 Ways to Test Your Strategy Before Going Live

Testing your trading strategy before using real or funded capital is critical. It helps ensure your method is sound, consistent, and compatible with prop firm rules.

1. Backtesting

Backtesting involves applying your strategy to historical market data to evaluate performance. It helps identify strengths and weaknesses without risking capital.

• Use quality data and realistic assumptions.
• Be wary of overfitting to past data.

2. Demo Trading

Demo accounts simulate live trading using virtual funds. This allows you to execute your strategy in real-time markets, testing order execution and risk management.

• Replicate prop firm challenge conditions.
• Maintain discipline as if trading real money.

3. Paper Trading

Paper trading involves manually recording trades based on live prices without executing orders. This helps refine decision-making and trade management.

• Focus on journaling and reviewing each trade.
• Use it as a step before demo trading.

Additional Tips

• Test over diverse market conditions.
• Track key metrics like win rate, risk/reward, and drawdowns.
• Adjust and optimize your plan before going live.

Testing thoroughly increases your confidence and readiness for funded trading challenges.