Hello dear friends!
I have long wanted to publish a blog on how to avoid falling into the trap of relatively small drawdown signal. Many investors are looking for signals with a large increase and with very little drawdown. Of course, who give up the case, where it is possible to risk fines, and earn a lot of money. I certainly would not mind). But many novice investors are not even acquainted with the site, already eager to double your deposit for a month, without conducting a detailed analysis of the signal to which want to connect.
The first thing you do most investors - is looking at the maximum drawdown signal. The lower risk-have stored the money in your account. Then look at the monthly income of the signal and calculate how much can earn next month. Drawdown = 5% ... Earnings per month = 30% ... What else is there to think about?! ... Be signed !!))
But not everything is as good as you think ...
In fact you need to know that during the online publishing signal MQL5, regardless of the statute of limitations trading account (weeks 10-20-30) - drawdown, which will be displayed on the page SIGNAL- is 0.00% or equals the largest losing trade!
So investors are not very accurate information about the risks of this signal. Supplier signal prior to the publication of its website, could sink even 90%, but we are with you this does not know ...
Below is a screenshot of several signals:
Screenshot 1
This image shows that the age of 20 weeks signal. Big Profits 463%. And a small drawdown, only 8%. But now we know that the drawdown begins ticking from the time of its publishing on the website .. To see the date of publishing of the signal, we need to go to the tab "EQUITY", and there we can see that the bill is published two weeks ago. And since the publication there was no deal, then the drawdown is the maximum loss ... But we do not know what was the relative drawdown of ekviti.. perhaps 60 ... We do not know ..
Screenshot 2
In the second image we see a colorful picture). Age 25 weeks signal. Gain 2293%. Risk - just 0.88%! Well, subscribe to?)) We now know that a small drawdown - does not always mean a small risk to our means! Go to the tab "Resources" and we see that is published by 4:00 back. Drawdown 0.88% - the risk of 4 hours after the publication of the signal, rather than 25 weeks, as many newcomers. And we did not know what was in his maximum drawdown for 6 months of trading.
Summing up the results of this topic, I want to warn you friends from deceptive "maximum drawdown" and advise you in the analysis of the signal, look in the tab "EQUITY" where you will see the date of the signal connection to the site MQL5. And I advise you to subscribe only to signals that are posted on the site for at least 2 months. This time is enough to make any conclusions about the signal, the system of its work and see more plausible drawdown!
This screenshot shows a more realistic account of the drawdown period of his trade:
I would be very glad if someone can help avoid making hasty and emotional conclusions about the signals.
Sincerely, Alikhan.
