Summary of How to Practice Discretionary Trading on MT5 — Using Demo Accounts, Testers, and Historical Testing - Navi+ - GogoJungle | Auto Trading - Market Analysis

Introduction

When you want to practice discretionary trading, there are several methods available even inside MT5. A demo account, Strategy Tester, and backtesting on past charts. Each is called “practice,” but what you can practice differs for each.

In this article, we lay out the ways to practice that MT5 offers and organize what each is suitable for.

What you will learn from this article

Four methods to practice in MT5
Compared from five perspectives, the strengths and weaknesses of each
When to use each and an example order of practice

There are 4 practice options in MT5

1. Practice with a demo account

Trade in virtual money on the live market.

Orders can be placed with real price movements and spreads
You can become familiar with how to place orders and how to operate the screen
Because you wait for the market to move, the number of practice opportunities is time-constrained
You cannot practice by selecting specific past moments (e.g., on days with major indicators)

2. Use the Strategy Tester

The Strategy Tester is a feature in MT5 fortesting automated trading programs (EA) on historical data.

If you can program the rules, you can test over long periods in a short time
There is a mode where you can watch the chart moving, and you won’t see bars beyond the current point
However, it is not a tool for practicing manual trading
You cannot test judgments that are hard to program, like “I don’t want to enter here for some vague reason”

3. Scroll past charts manually

Go back on the chart to the left and progress to the right bit by bit to make judgments.

Requires no tools and can start today
Because future bars remain on the right side of the screen,the answers are easy to spot
Orders, P&L, and reasons are all recorded manually

What happens when you can see ahead is described in detail in this article.

▶ Why seeing ahead makes practice ineffective — Three situations where hindsight seeps into backtesting https://www.gogojungle.co.jp/finance/navi/articles/126818

4. Play back one past bar at a time to practice

Advance through past charts one bar at a time and place orders in a simulated account. Use MT5 indicators and other tools.

You can judge without looking ahead (thanks to tool mechanism)
You can vary the playback speed to increase the number of repetitions in a short time
Many options allow you to practice on specific past days (depends on the tool)
Setting up the tools takes effort, and some tools cost money

Compare from five viewpoints

Can you see future price movement?

Demo account: Cannot see future (not happened yet)
Strategy Tester: Cannot see future
Manual scroll: Easy to see ahead
Play back one bar at a time: Cannot see ahead (depends on tool)

Number of practice opportunities

Demo account: As the market moves, few opportunities
Strategy Tester: Many (only for rules you can program)
Manual scroll: Many
Play back one bar at a time: Many

Can you choose scenarios?

Demo account: Cannot choose
Strategy Tester: Can choose the period
Manual scroll: Can choose
Play back one bar at a time: Can choose (depends on tool)

Is it practice for placing real orders?

Demo account: Yes
Strategy Tester: No (for testing automated trading)
Manual scroll: No (orders in head or on paper)
Play back one bar at a time: Yes (depends on tool)

Is there a record?

Demo account: Order history is kept. You write the reasons yourself
Strategy Tester: A results list is produced
Manual scroll: Everything is written manually
Play back one bar at a time: Depends on the tool

Using them by objective

There isn’t one correct method. Choose based on what you want to practice.

Want to get used to order placement→ Demo account
Want to validate a rule that can be programmed over a long period→ Strategy Tester
Want to get a sense of hit-rate. Start easily→ Manual scroll
Want to practice many judgments without knowing the future→ Play back one bar at a time

What you want to develop in discretionary trading is the judgment of “enter now or pass.” Such judgments can only be trained by seeing many scenarios where the future is unknown. A combination of frequency and not knowing the future is provided by the fourth method.

An example order of practice

Write down the rules you want to test in words
Manually scroll to gauge where the rule would apply
Play back one bar at a time, repeat judgments in unknown- future scenarios, and accumulate records
Review the records and adjust the rule in just one place
In a demo account, get accustomed to placing orders and the execution and spreads in the current market

The procedure from writing the rules to reviewing them is summarized in another article.

▶ What is FX backtesting (backtest)? Methods, steps, and how to continue https://www.gogojungle.co.jp/finance/navi/articles/126878

Reduce effort with tools

The MT5 indicator “FX Backtest Trainer” is a practice tool for the fourth method. It plays back past charts one bar at a time and allows orders and recordkeeping in a simulated account.

Create separate instruments for practice and load past bars one by one there.Future bars do not exist as data, so you won’t see them even if you scroll
The commonly used indicators and color schemes appear directly in the practice chart (not all)
You can leave a record of the entry and exit reasons in a trade notebook each time
You can save mid-way and resume the next day

There are things you cannot do.

Because it is an indicator, you do not place actual orders. It is not an automated trading program (EA)
It does not run inside Strategy Tester
Fees and swaps are not included in calculations. It does not reproduce price movements finer than the minimum candle you set (default is 1-minute)
Account currency is Japanese Yen only, and only supported on MT5 (Windows)

There is a guide on how to practice with this tool in MT5 in another article.

▶ How to backtest with MT5 without peeking ahead — the pitfalls of manual scrolling and practice of playing back one bar at a time https://www.gogojungle.co.jp/finance/navi/articles/126682

Conclusion

MT5 practice options are four: Demo account, Strategy Tester, manual scrolling, and playing back one bar at a time
Five perspectives for comparison: whether you can see ahead, frequency, scenarios, manual order placement, and record-keeping
For judgment training, methods that let you see many scenarios without knowing the future are best

Seven commonly used approaches in discretionary trading and the difficult parts and what to look for in practice.

▶ Summary of representative discretionary trading methods — seven approaches and how to practice each
https://www.gogojungle.co.jp/finance/navi/articles/127390

About the practice tools

The practice described in this article can be done with the MT5 indicator “FX Backtest Trainer.” It plays back past charts one by one and allows orders, records, and review in a simulated account.

There is a seven-day trial version.You can try all features for seven days without usage restrictions.
First, verify that it runs on your MT5 and that your usual indicators can be used.

▶ Trial version (Product ID 87387)
https://www.gogojungle.co.jp/tools/indicators/87387

If you want to continue practicing, please see the product version.
Trade notes written in the trial can be opened in the product version as is.

▶ Product version (Product ID 86765)
https://www.gogojungle.co.jp/tools/indicators/86765

Caution

This tool is for practice. It does not guarantee profits. It does not place actual orders.
This article introduces practice methods. It does not endorse specific buying or selling strategies.

Summary of How to Practice Discretionary Trading on MT5 — Using Demo Accounts, Testers, and Historical Testing