This guy has 32 followers with total amount of 100k - fuck them, obviously. 6000% growth with only 6% of risk - this guy must be a genious, absolute God. As You can see, this signal has been published just recently, thus, it has already managed to accumulate a ton of growth while not displaying its drawdown publicly. And hey - it has helpped him, as he earns as much as 1500 USD per month. Manipulation at its very best. (y)
There is a group of traders who manipulate their past performance this way, however, they have all 1 thing in common - low account balances and low trading size:
3. Sufficiently large trading balance:
In order to achieve 000's of growth percentage in short amount of time, there must be situation (most probably, quite few of them) when trading drawdown reaches sky. Luckily for them, these traders don't hesitate to make these gambles, when there are only a few tens of USD on the line. As accounts grow larger, their risk appetite becomes smaller and they are ready to finish of this manipulation cycle by making their "artwork" public.
Without going into much details with this (as this is rather clear point), You should ask Yourselves - if a signal provider is so confident in his services, why is he willing to risk just so much and not more? He is obviously outperforming the market, so what's the problem? Short everything You have (money, belongings, even children) and invest in this Godly trading strategy.:) For fk sake, it's Joker (lol, just an example), how can it be wrong?
4. Absolute level of risk:
Once again, growth accumulates, while drawdown does not. From the previous example, are those 6000% in growth unrealistic? - Well, it depends from the speed, at which this growth is being reached. Throughout 3-5 years such accumulated growth would be reasonable, but in less than a year? - Not with proper risk management.
In order to reach 6000% growth in 3 years, monthly growth should be 27%; in 4 years - 20%; in 5 years - 16%. Are these % so unrealistic, especially knowing that this is forex market we are talking about? Most probably, 27% and 20% are; 16% per month is quite realistic, having reasonable risk %.
Accumulating effect can have tremendous influence over the total growth; let me remind You, this is why signals with longer positive history have much greater growth/drawdown values. We, as investors, should know this by heart, however, it is important that our signal provider knows this as well.
Yes, I did tell You we can always manually intervene and decide upon our risk appetite, thus, protect ourselves from provider's stupidity and over-agression. Unfortunately, even when being protected on our end, You must ask Yourself how long will such service survive. It can have drawdown of 30%, maybe 40%, time-to-time, however, if it happens periodically, month after month, sooner than later such signal will blow up. It's not so much about loosing money - it's about building long-lasting relationships with provider's subscriber base.
That's all from our side. If You have any suggestions or You disagree with some of the ideas, feel free to leave Your comment below!
Best of luck,