Quote from topgun4321:
For those who are members of Fxmaster or OMI-FX, I would like to know... What percent per month are making with either of these 2 companies since being involved with their service? Are you making 5% return on your money? 10%? 15%? 20% or more? And along with your percentage, can you also list how long you have been trading with that particular company?
I asked a similar question on the Fxmaster website. However, I noticed that there are not of people that post on that site so I decided to post here also to get some answers.
Topgun
For FXMaster, take a look at Peter35's first-hand posts on p. 3 of this thread (at 40 posts per page):
http://www.elitetrader.com/vb/showthread.php?s=&postid=1174138#post1174138
http://www.elitetrader.com/vb/showthread.php?s=&postid=1174407#post1174407
and his subsequent posts.
I analyzed FXMaster's
performance in detail last year, just for fun. In general, your own performance from subscribing to any signals service will be a function of whatever leverage you adopt, overlayed on your realized pips from following their signals. Rule of thumb 1 (approximate):
Your % return = 0.01 x your realized pips x your leverage
This does not reflect compounding, on purpose. Here I'm using "leverage" to refer to "nominal" leverage, not "true" leverage, for simplicity. For example, 5 lots of GBP/USD on $100K account is nominal leverage of 5:1 and true leverage of 9.44:1, @1.8880 rate. Most people talk about nominal leverage. Of course, every single broker / dealer uses true leverage, for margin purposes.
Your leverage, in turn,
should be a function of the worst % drawdown you believe you can tolerate without, oh, losing too much sleep. Rule of thumb 2 (also approximate):
Max leverage = 100 x your max DD % / expected max DD in pips
Updating my previous analysis, FXMaster's average monthly return since inception through August (34 months) is a respectable 384 pips (thanks to above-average returns in 2004), but with a large monthly standard deviation of 509 pips. They had several 1000+ pip drawdowns... don't just look at the monthly grid -- drill down to trade-level "Details." (Note: you can easily copy & paste any of their data straight into Excel.)
Now you can see why 2:1 or thereabouts is just about as high a leverage as most people could get away with over time, for that signal service. That would have gotten you a few ~20%+ drawdowns and 384 pips / ~7.7% monthly returns so far, on average, uncompounded. It's been quite a bit less than that since Jan. 2005, averaging around 223 pips / ~4.5% monthly.
All that assumes that you manage to execute every signal perfectly and on a timely basis, 24/7/365. It ignores any real-world variance from slippage, missed signals, late receipt of signals, platform / broker snafus, connectivity issues, trader's errors, not following the signals mechanically / robot-like, etc. (If you must subscribe to a service, might as well look for auto-execution, although that usually introduces its own issues.) And those are merely averages -- the variability from month to month is dramatic. If it weren't, you'd be able to dial up the heat to much higher leverage.
The 45 month time frame is what it would take to compound only $300 into one million....