When we choose a high-risk strategy provider, you must have the mentality that the money you invest, if lost, will not affect your daily routine. There’s a saying that goes, “High Risk, High Return”.
In this article, I’ve chosen three criteria to look out for in a high-returns strategy provider:
- Total Pips
- Average Returns Per Month
- Average Pips Per Trade
Total Pips
A pip measures the amount of change in the exchange rate for a currency. The reason why we want to see the total pips is because the number of pips is a good gauge on how much return you would get if you were to follow the provider.
For example, assume that a $300,000 trade involving the USD/CAD pair is closed at 1.0568 after gaining 20 pips. Calculate the profit in US dollars by completing the following three steps:
- Determine the number of quote currency (CAD) each pip represents – Multiply the amount of the trade by 1 pip: 300,000 x 0.0001 = 30 CAD per pip
- Calculate the number of base currency (USD) per pip – Divide the number of CAD per pip (from step 1) by the closing exchange rate to arrive at the number of USD per pip: 30 ÷ 1.0568 = 28.39 USD per pip
- Determine the total profit or loss of the trade – Multiply the number of pips gained by the value of each pip in USD (from step 2) to arrive at the total loss / profit for the trade: 20 (pips gained) x 28.39 = $567.80 USD profit
Average Returns Per Month
The higher the average returns per month, the more profitable a strategy provider is. This could be a good gauge on the amount of returns you are getting based on your equity available to follow the provider.
Average Pips Per Trade
They can be found under the “trading statement” of a strategy provider. If a strategy provider profits 5-10 pips per trade and takes lots of trades, it may not be ideal for CopyPip followers as CopyPip charges a 1 pip commission and currency spread would have reduced your possible returns.
Therefore, it is advised to follow a provider with higher pips per trade while at the same time has high returns as well as total pips.
Fullerton Markets Research Team
Your Committed Trading Partner
