I may receive a referral reward if you sign up through my link. It costs you nothing extra.
Disclosure: I may receive a referral reward from High Capital Group if you become a client through my link. It costs you nothing extra.
A trading record can look wonderful and still tell you very little, because a chart that only goes up hides the three things that matter most: how far the account fell along the way, how much was won compared with lost, and how often a quarter ended in the red. This article explains each of them in plain terms, using the figures High Capital Group publishes as the example, so you can read any record you meet with the same eyes.
Before you look at a single number, ask who produced it. A record the trader typed up is a claim. A record pulled from a trading account by an independent third party is evidence. High Capital Group's results are verified in real time by FX Blue, and the link to the verified account is on the Past Performance page. The company describes it as the verification of one of its accounts, so it is a sample and not every client's result, and each client's own result depends on when they started and the risk level they chose.
Drawdown is the distance between an account's highest peak and the lowest valley after it. The company gives a simple example: you start with US$4,000, grow it to US$5,000, then it dips to US$4,500 before rising again. The drawdown is US$500, which is 10% of the peak.
Maximum drawdown is the largest such fall in the whole record, and it is the number that tells you what holding the account actually felt like. High Capital Group's target is to keep it below 15.0%. Two things to remember when you read that. It is a target, so it is a goal and not a limit that cannot be crossed. And a record's worst fall so far does not set a ceiling for the next one.
A practical way to use the figure is to turn it into money. If you put in US$1,000 and the account fell by a drawdown of 15%, you would be looking at US$150 on paper at the low point. Ask yourself honestly whether you could watch that happen without selling in a panic. If the answer is no, a lower risk setting or a smaller deposit may suit you better.
Profit factor is the total money made on winning trades divided by the total money lost on losing trades over a period. A profit factor of 1 means winners and losers cancelled out. Above 1 means the winners were bigger in total. The company reports a profit factor of 4.99, which means that, across the period measured, gross winnings were close to five times gross losses.
It is a useful number because it shows whether a good month came from a sound method or from a lucky streak. It does not show how large the account was or how long the record has run, which is why it needs to be read alongside the others. A very high profit factor over a handful of trades means much less than a high one over many years.
Monthly figures swing about. Quarters smooth some of that out, and they give a clearer picture of consistency. The company reports one losing quarter out of 33. When you see a number like that, resist the urge to read it as a promise. It tells you how the record has looked, and no trader can promise that the next quarter will be a winner.
It helps to ask what happened in the losing quarter and how long the account took to recover. The high water mark in the fee structure is relevant here: clients pay the 30% performance fee only on profit above their previous peak, so a losing stretch has to be made back before new fees apply.
The company's target is an average monthly return of 10% after fees. A target describes the aim of the strategy. It does not describe what a particular client received, and a target figure is not a prediction. If you see anyone, including me, quote a return figure without the word target next to it and without a risk warning beside it, treat that as a red flag.
This is the honest wrinkle in the record, and the company states it openly. All results before 2018 came from the old legacy system. The past performance of the current system can be seen from 2018 onwards. When you read the verified account, check which period you are looking at, and give the current system's period the most weight. The older history still tells you something about the trader, but it was produced by different technology.
You can work through all six with High Capital Group's own material. The Past Performance page has the video and the verified account, and the FAQ page explains drawdown and the high water mark in the company's own words. If something is still unclear after that, email support@highcapitalgroup.com.
A verified record is a good reason to look closer, and no more than that. Forex trading carries risk, leverage of at least 30:1 is required on the accounts, and a good history cannot remove the chance of a loss.
Risk warning: past performance is not a guarantee of future results. Forex trading carries risk and you can lose money. Only invest money you can afford to lose. Client money is held by a regulated broker in the client's own account.
Forex trading carries risk and you can lose money. The return and drawdown figures are targets, not promises, and past performance is not a guarantee of future results. Your money is held in your own account with a regulated broker. Only invest money you can afford to lose.