As of mid-February 2010, after 42 weeks of trading, LowestDD has these statistics to show for:
- ROI: 1,300+%
- Profit: 61,360 pips
- Trades: 2,671
- Winning Trades: 2,631
- Winning Percentage: 99%
- Maximum Drawdown: 10,279 pips
- Average Pips Per Trade: 23.0 pips
Click here if you want to view his complete trading records.
Most notable in these statistics are his ROI, Winning Percentage and Maximum Drawdown. So let us try to breakdown the story behind these statistics.
A quick look at the trades that LowestDD would reveal that he prefers to trade the EUR/JPY, GBP/USD and the GBP/JPY. These are the most volatile currency pairs in forex trading especially when the European market and North American market comes in. It is no wonder that LowestDD also trades mostly during these time zones.
The 99% Winning Percentage is simply phenomenal. Of, course, as most of you may suspect, this is partly due to the low Target Profit and wide Stop Loss levels that LowetDD is employing. As a result, LowestDD has a Maximum Drawdown of 10,279 pips. That is quite a hefty drawdown when you compare it as a ratin to his winning profit in pip which is 61,360. Depending on what type of investor you are and how much risk is tolerable for you as a forex trader, this can either be too muck risky for you, or relatively acceptable. Is risking almost one-sixth (or most probably a lot more when this drawdown actually happened) of your capital acceptable to you if you can achieve 1,300% ROI in 42 weeks?
All of these depend on what type of investor you are and what your appetite for risk is in comparison to you investment goal in terms of ROI. With a forex signal provider like LowestDD it is imperative that the investor has a very strict capital management plan. This is where an investor can maximize the phenomenal winning percentage of LowestDD. If the investor can control the risk factor that comes with LowestDD’s aggressive trading, then that investor can achieve tremendous profits. And this can be done with very conservative capital management.
Limit the capital that LowestDD can expose with his trading. Control the number of lots that LowestDD can open. You might find it more beneficial for your account if you do not meddle with the stoploss that LowestDD uses in his trading. And the way to compensate for this is by lowering the lot exposure of your account. This is possible with Forex Automatic Trading, and this is what exactly you should do as an investor.
When an investor lowers the risk factor by tightening the number of lots that can be opened based on capital requirements, he actually reduces the relative risk of that maximum drawdown that LowestDD’s trading come with. Of course, with this comes the fact that the profit percentage gain for the investor would also be tempered. But that is how it works – if you want to lower the risk, you must be willing to lower your profit expectations. But with a ROI record of 1,300%, would lowering the bar for your profit goal hurt you that much?
LowestDD recently posted some guidelines on capital management in view of his aggressive trading. He released what he thinks is the ideal number of lots for the type of risk that he employs. It is up to the investor whether to follow it or not. As an investor who controls how his money is being managed, it is up to you to do the computations based on your investment goals.
Remember that LowestDD’s strongest point is h is winning percentage. Learn how you can leverage this while lowering your risk exposure. The key when using LowestDD’s trading signals is proper capital management. You do not have to worry about how he positions with his trading signals. His winning record speaks for itself. Take advantage of the strength of his strategy and learn how to control the weakness in his technique. There are trade-offs. Just know how to reach the correct balance between the two factors. In the end, the profitability of your account in the long run is what matters most.
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