WHY SIMULATION WORKS

Training and simulation, when applied correctly under a well-planned sequence of instruction,
work very well. It is inconceivable for airline pilots to fly jets without extensive
simulation. Simulation allows for testing one’s strategies and tactics to discover weaknesses
and does not have discovering strengths as a priority. War games are designed
to discover the strategic vulnerabilities of the battle strategies, not to predict a particular
battle. It is essential, in preparing for forex, to correctly use a simulated account to
test-drive your skills. The question arises: What is the best way?
We have already provided the hints of an answer. The best way to use a simulated
forex trading account is to use it to simulate strategies and tactics that are intended to
be used. Trading $100,000 in a simulated account when the real account will be $5,000
is misapplying the concept of simulation. Putting on two lots instead of one to test your
skills in multiple-lot trading is an excellent way to use simulation to stretch your boundary
of experience. The test-drive of forex skills in a simulated account should be seen
as an opportunity to identify what you know and don’t know about your own level of
competence. Of course, the results are hypothetical, but if trades are put on as realistically
as possible, then the results will have preparative value in moving ahead to real
trading.




By Abe Cofnas