A popular Forex trading strategy is to use a combination of technical indicators to indicate entry/close signals. Many Forex trading forums discuss Forex trading strategies and this can be a good starting point to develop your own ideas.

One of the most popular forums is Forex Factory, to find the Forex systems that have stood the test of time so far sort the threads by replies.

Some important things you should think about before you begin to back-test the system include;
- Does the system have a stop and profit target?
- Does the system have any money management rules?
- Are any of the indicators likely to ‘repaint’ causing your back-test results to be invalid?
- Does the system enter trades during a news release?

It is possible to back-test a Forex trading strategy with a currency trading demo account. However, if you are testing a strategy with time periods less than 1 day (e.g. 15 min, 1 hour, 4 hour) you may find that many Forex brokers provide limited historical data which will limit how much back-testing you can do. If you wish to do a large amount of back-testing you may need to find a source you can download historical data from that can be imported into a platform such as MetaTrader 4 or Amibroker.

To test your ability to apply the rules of the strategy it is a good idea to forward test and/or test using a simulator. Using a Forex simulator such as Forex Tester you can replay the past as if it were happening now and enter/exit trades to test your skills.