**oilfxpro:**

Hi folks

What is the value of an expert advisor?How do we put a value on an expert advisor?What is a good expert advisor?

A good expert advisor is one with a drawdown of 50 % of the yearly pips it makes(averaged out over 3 years).It should have annual pippage of at least 700 pips and a drawdown of 350 pips.

An investor could put 10,000 and expect to make 70 % per year = 700 pips *$10

If an investment in an expert advisor gives an income of 70% ,on a 10,000 account (the minimum account size used )it would give 10 times the annual interest income of say 7% =70%.In my view the expert advisor is worth 10 times * 10,000 * 0.5 (annual drawdown) = $50,000.

A really good expert advisor making $250,000 from a $10,000 account is worth around $1.8 m

Could anybody else come up with a formula for putting a value on expert advisors

OILFXPROI suppose you could consider what it would typically cost an investor to achieve returns by an alternative method. Anyone making those kinds of returns could probably push for 40% of profits, so an investor would be paying 100K in commissions to his trader to earn 150K each year.

To make 250K a year after costs, the trader would need to make just over 420K, and the investor would be paying 170K a year in commissions assuming the 60/40 split on profits.

After that it's down to pure marketing, you then need to think about your "ideal customer", the size of account that they're trading, and the number of potential sales. For example, do you want to attract 20 high net worth individuals with 20 million each to invest, or 400,000 idiots with 10 grand to invest. I know which Id rather deal with

On top of that there are practical difficulties to consider. If some guy only has 10K then he's not going to be able to pay out 170K up front for an annual license fee, or a couple of million to purchase the product outright, the market will only pay what it wants to pay.

Of course in reality, you wont sell, rent or license the system, because there's absolutely no need to, when you can take 30,40,50% of profits from an investor, and retain complete control of your intellectual property.

Hi folks

What is the value of an expert advisor?How do we put a value on an expert advisor?What is a good expert advisor?

A good expert advisor is one with a drawdown of 50 % of the yearly pips it makes(averaged out over 3 years).It should have annual pippage of at least 700 pips and a drawdown of 350 pips.

An investor could put 10,000 and expect to make 70 % per year = 700 pips *$10

If an investment in an expert advisor gives an income of 70% ,on a 10,000 account (the minimum account size used )it would give 10 times the annual interest income of say 7% =70%.In my view the expert advisor is worth 10 times * 10,000 * 0.5 (annual drawdown) = $50,000.

A really good expert advisor making $250,000 from a $10,000 account is worth around $1.8 m

Could anybody else come up with a formula for putting a value on expert advisors

OILFXPRO