Judging the Performance of a Forex Managed Account Trader: Is the Track Record the Only Thing that Matters?

Seeking out positive returns.

Investors should take particular note of the Forex manager record of performance; however, this in itself should not be the only reason for choosing a specific Forex trading advisor.  The disclosure document should spell out the Forex managed account manager market approach and trading style. This information should be carefully reviewed along with the track record when the investor chooses a particular Forex trader.  Strong performance in the short term may be nothing more than good fortune.  Positive performance over a long time., and over many trades, may indicate that the trader’s philosophy and style are more robust than his competitors.  This is especially true if the track record includes periods of bull, bear, and flat trading ranges. It is important to remember that past performance is not necessarily indicative of future results.

A few metrics to take careful note of when reviewing a track record:

• How long is the track record?
• Is it skill or is the fund manager lucky?
• Are the results sustainable?
• Worst peak to valley drawdown: Could you still make money even if the manager has a positive return for the year?
• Assets under management: Is the manager trading and an insignificant amount of money, or has his track record proved to be scalable and sustainable?