In this MaxPipFX review we demonstrate why you should not care only about its win ratio.
MaxPipFX is a Forex trading signals service that is proudly showing its statistics. On its webpage you can see that it allegedly wins around 80% of all trades, which suggests that it is highly profitable.
If you want to automatically copy their trades on your account, it will cost you more than $100 per month. Is it worth it?
Not so fast
We have written and published more than one thousand trading systems reviews. And we often say that when somebody is emphasizing the win ratio without giving you additional numbers, it proves that they know very little about trading and cannot be trusted.
With MaxPipFX it seems to be the same story. They are bragging about the accuracy of their signals, yet a closer look at their trading statistics shows that it has little to no value.
Let’s take a general example: if you set your profit target at $10 and place your stop loss at -$100 with every trade, you can win 80% of all your trades and you will still be losing money. It is a very simple concept.
In trading what matters alongside the win rate is the RRR (Risk to Reward Ratio). In our example it is 10:1, in other words with every trade you risk 10 times more than you can make. And that is a bad approach that is hardly sustainable in the long term.
MaxPipFX is doing a similar thing. When you look at its statistics, the RRR is 3:1. Meaning that with every trade they risk 3 times more than they can make in profits. And the results of this approach are pretty clear, in 7 months they are only 38% in profit with a maximum drawdown of 32.7%.
It means that another big drawdown can wipe out all the profits. This shows why you cannot look at the win ratio only, you have to examine the RRR alongside it. And in the case of MaxPipFX it is not good.
Successful traders often lose more trades than they win, but they have a favorable RRR where they target profits that are bigger than potential losses. For example their take profit is set two times higher than the stop loss resulting in a RRR of 1:2.
The trading system of MaxPipFX is not set up well, statistics show results that can be wiped out with one bad series of trades.
We recommend trying every trading system on a demo account before deciding whether you should invest real money with it or not.
Trust only the statistics you gather in your own in testing.