To evaluate a Myfxbook portfolio, you simply need to check a few points. First here is a quick list to check for those who don’t have time to go into details, we will provide more detailed explanation further down the page. You can go directly to the detailed section by clicking here.
1. Green tick on “Track Record Verified”
2. Green tick on “Trading Privileges”
3. Must be Real Account
4. Showing the broker name
5. Focus on the “Absolute Gain” instead of “Gain”
6. Drawdown below 30%
7. Start Date, Open Trades, and History visible. Based on the start date, make sure it’s at least 3 months old account.
8. Be sure that the Portfolio doesn’t use Custom Date
Simple enough? It’s 8 on simplified version because there are 2 points that are combined into one. If all clear, you can check our Myfxbook Portfolio here.
Now let’s go into the details:
1. Track Record Verified: must be green tick
A green tick here meas Myfxbook was able to verify the info provided by cross-checking them with data provided by the broker’s server. Some information that are verified here are:
- Account is actually Real, not Demo. Note that without this verification Myfxbook would allow you put in Demo account and pretend it was Real.
- The account is actually on the said broker, using the said platform, and use the said leverage.
2. Trading Privileges Verified: must be green tick
A green tick here means Myfxbook was able to verify that the portfolio creator is actually has access to trade in the said trading account. This means a person can’t just steal/acquire an account along with its investor password somewhere then make a verified Myfxbook portfolio.
3. It has to be Real account
This one is self explanatory. If you’re going to follow the trader and trust his decision, you need to know that he also trust in his own decision when handling his money. If he trades on Demo then following him would be a very questionable decision on your part.
4. An actual broker server need to be displayed
On the screenshot above, you can see FXPrimus as the broker. However please note that a person can choose to select “Other (MT4)” as his broker. This means that his broker is not available on Myfxbook list when he added the portfolio. Now currently Myfxbook has an extensive list of most MT4 brokers that still active and of course all of the major players, so if you see “Other (MT4)” as the broker, thread carefully.
5. Gain and Absolute Gain
There are “Gain” and “Absolute Gain”, the following are a bit explanation about both
- Gain: gain is calculated by disregarding cash flows, be it in or out. This means it only factors initial deposit on profit percentage. This means if my initial investment is $100, then I made another $100 deposit, then gain $100 profit, my percentage would be 100%. This is because the system only use initial deposit to calculate.
- Absolute gain: all deposits made are calculated when generating the profit percentage. This means if my initial investment is $100, then I made another $100 deposit, then gain $100 profit, my percentage would be 50%. This is because the system factors all deposits made when doing calculation.
For our purpose, the “Absolute Gain” is much more reliable because it’s more thorough. The “Gain” can be gamed by putting a small initial deposit then depositing larger 2nd deposit before start trading, this way the gain percentage would always be high because system only factors the first deposit.
6. Healthy drawdown
Drawdown shows how much a trader is willing to risk his capital for a trade. Around the number 20% or less is considered safe. However if you see up to 70-80% drawdown constantly, it means the trader likes to engage in high risk trading. At this point you need to consider whether the profit justify the risk.
7. Vital information should be displayed
Myfxbook gives freedom for portfolio owner to lock some of his information provided. While privacy consideration is understandable, if you plan to follow this particular trader some information MUST NOT be locked:
- Start date of the account, which can be accessed at the “General” tab. Knowing the start date would give you information if this is an account created yesterday or 3 years ago. This in turn will give you enough information about the account’s survivability.
- History and “Open Trades” visible. While it’s impossible to make good call on every trade, the history should provide transparency about the general trading style. Does he likes to utilize risky strategy for huge gain? Or does he keeps it safe, getting however much he can while keeping the equity on safe level?
8. Make sure no information is purposely omitted to make the portfolio look better
The most common way to mislead viewer is by only showing a part of the portfolio during a certain good period. When this is the case, Myfxbook will display warning above and inform you the way to see the statistics based on its entire history. By clicking “custom analysis” and setting the date range to cover the entire account range, usually you will immediately notice a few things: the abs gain, daily, monthly, and drawdown won’t be the same. Most likely they will go down or even go to minus. This is why it’s very important to be able to look at the whole picture.
9. Check the account age
Someone might claim that he had 50+ profitable months (more than 4 years) and have 4000 followers, but a quick check at the portfolio start date in “General” tab can reveal the true story. A real-world example is this portfolio that says it has 100+ profitable months on its main site while the Myfxbook page shows that it started trading 3 months ago. If the site is indeed already running for 8 years (100 months), where is the previous account that they traded on before?
Paying attention to this small thing will save you from making poor decision and follow an untested trading system.
We hope the above mini-guide can help you to take correct decision. Check out our portfolio here or subscribe to our system below: