Just wanted some opinions. I have traded for approximately 5 years using a discretionary method.
My friend who has no experience trading has started using an algo which is yielding 10% returns monthly. He pays the owner of the algo a 30% commission on profits. The owner of the algo says he got it from a hedge fund.
I’ve had a brief look at the bot and it seems to be using a martingale strategy with 1% profit taking and 10% stop loss. The leverage that has been applied on the account is 500:1 and each trade is opened as a micro lot.
I’ve always heard negative things about the martingale strategy even though in this case the loss is capped at 10%.
What are your thoughts on this bot?
Are there already similar ones online and available To the public and they have just marketed it as a special one that is used by the hedge funds?
What are the risks of a blow out using this strategy along side the leverage and lot size being used.
The reason I’m asking this as I’m also tempted to use this algo but it just seems to be too good to true especially when you compound a 10% monthly return even over a few short years, 10k Initial capital could potentially return hundreds of thousands.