What is the minimum of capital i need to use to play with a robot ? – Lesson I.
Strategies (Lynx, OnTheRiver) have histories of trades.
For example (pure example, not real one).
if Lynx EUR/USD has 10 trades in a row :
Trade 1 : – 20 pips (lose)
Trade 2: + 40 pips (lwin)
Trade 3 : +100 pips
Trade 4 : -200 pips
Trade 5 : -200 pips
Trade 6 : – 150 pips
Trade 7 : +150 pips
Trade 8 : + 150 pips
Trade 9 : + 150 pips.
Trade 10 : +70 pips.
The trades 4,5,6 represents a drawdown of 550 pips . It’s also the maximal drawdown of the strategy.
At total the strategy gained 90 pips
To simplify if you have 1 pips = 1 usd (done with a 10’000 USD – 0.10 lots)
You would have gained 90 USD
But ….this gain is not for everybody.
Indeed if you start with a capital of 100 USD, you can say “wahooo” i will do +90% ….you will lose all :
Trade 1 : 80 USD in capital
Trade 2 : 120 USD in capital
Trade 3 : 220 USD in capital (I am happy !!!!)
Trade 4 : 20 USD in capital….perhaps you won’t be able to play due to margin problem – we will explain that in another post.
Trade 5 : —-your account is dead
The important of start capital is underestimated because brokers pushed you to play with low capital to keep all the capital for them
You can check for each robot in our website what is the result with what capital :