Smart money management with trade copier

Some of banks use this kind of money management for mutual funds investing. They are reducing risk during investment period, from start to end. It is a very good idea and you can use it if you have one or several trading strategies with trading statistic, and you use trade copier to mirror trades to your own account. When I say “you have”, I mean you have forex robots or investor access to profitable accounts.

For example you have access (account #, read only password) to 2 accounts, and both account have trading stats for 3 years period. 

Account 1 had five significant drawdown periods (minimal drawdown 12% and maximal drawdown 27%). Minimal periods between drawdowns – 3 months.
Account 2 had two significant drawdown periods (minimal drawdown 8% and maximal drawdown 14%). Minimal periods between drawdowns – 1.6 years.

You should estimate next drawdown period for each strategy and copy trades reducing risk level. You can start increasing risk level from low point of drawdown. 

For example for strategy 1 a minimal period between drawdowns is 3 month, so you can trade with standard risk first two months and then start reducing risk.
You should start risk increasing when your drawdown will be 12% and start trading with standard risk when drawdown will be 27%. This approach will help you to increase your profit.
For strategy 2 you can trade with standard risk 1.3 year, and then start reducing risk. You should start risk increasing when your drawdown will be 8% and start trading with standard risk when drawdown will be 14%.

You can receive good results if you will combine strategies with different periods of drawdown in to portfolio. 

Using trade copier, you can create good portfolio from trading system and copy trades to your own account or manage clients’ accounts with low risk. This strategy will be very useful if you sell forex signals as well.

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