MT4 Managed Accounts

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I came across Michael on one of the many trading forums who was offing to manage ‘your’ trading account with an MT4 forex broker. The basic concept being; you deposit your money in a broker account an you allow them to trade it for you and then they take a fee/% of the profits for doing so.

There are plenty of these offers but most of the time the vendor expects something for nothing. However on this occassion when asked if they would run a demo account of my choosing for a month or so he accepted.

This meant setting up a demo account at Alpari which allowed me to view the trades being made at the same time. So I can honestly say the results on the demo account were genuine.

Over the month (December ’09-Jan ’10) the return on account was 45% which was pretty impressive. There were only two trades closed for a loss. However that does not mean it was with out problems which I will highlight further down in the article.

After the demo period I asked the Michael a few questions:-

Question 1

How Long Have You Been Trading?
Since April 2008

Question 2

Why do you trade Forex rather than other markets

It is much popular than others (to me) and since i could start with as low as 200 dollars, i gave it a go.

Question 3

I notice the system you trade only made a couple of losses over the month you were demo trading for me, is that a normal strike rate for you or would you expect more losses normally?

Normally that was not supposed to happen and i dont expect more losses that is why i leave running loss trades. The very next day after i took the losses the market went back to my entry price and eventually to my Tp price. I dont like taking losses, so while i was studying the system i noticed that it was possible to avoid losses all together.

Question 4

I noticed some of the trades go into fairly big losses but do not get closed out? Is that normal?

Yes. I found out that with the right lot size, u can actually leave your losses and they will retrace to your entry point

Question 5

I notice on such occasions that the running loss on the trade were nearly 10% of the account at the time? How can you justify the large risk to reward ratio?

I trade on only the EUR/USD. I studied it’s movement. It was possible to have running loss trades and still make profit (hedging). I just know where to put my TP.

Question 6

Would it be possible (for any of you clients who wished to reduce their risk level) to reduce the size of loss you allow on any trade?

Yes it would be very possible. It all depends on how long i will be trading the account. If it is for less than three months i will never allow losses that will enventually jeorpadize the profit at the end of the period. But if it is for say six months, i will allow them run cos sonner or later if it does not go back to my entry price, and i just have to close it, then the loss will be very minimized compared to the profits i would have realized.

Question 7

At time of writing the demo account you traded for is up 45.5%. This is obviously very impressive but what is the worst trading month’s return you have had whilst trading this system?


Question 8

Do you trade any other systems? If so do you trade these for clients?

This is the only system i trade. I just set my orders and leave them. Most times i’m not there when the trades are triggered. And yes, this is what i use for Clients

Question 9

Which MT4 broker would you recommend if a traded wanted to use your services?

Fxpro, Alpari UK. Spreads are very ok. But Alpari is First choice, Fixed Spread.

After reading those questions and answers you can probably guess my issues with having my trading account managed. Most importantly there is the issue with such a large risk to reward. Naturally it results in a great strike rate but the notion of waiting for trades to come back in your direction does not sit well with me. I have seen it work for a while but eventually it comes back to haunt you.

I also feel the use of hedging is pointless in day trading. If you are hedging you still have a loss on the account. You might aswell just close the trade.

Whilst I can honestly say Michael traded the demo account as he would normally and it made excellent returns I personally could not justify the risk taken to earn that 45% return. I guess one could request to trade at a smaller lot size. Rather than trying to make 45% in month maybe trying to make 10% would be better. At least your trading capital would last longer.

Obviously I can’t really comment on his trading system as I do not know the rules but I can honestly say the results on the demo were real. But obviously that does not mean the same would happen on a real account but it is a lot more “proof” than most forum posters offer.

If you are interesting in someone trading your account for you, you might want to drop Michael an email or apparanly you can also get hold of him on facebook under the name Michael Osy Eluwa.

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