How to choose the best time to enter the investment program

Few investors know that to maximize your chance of “making a profit”, you need to choose the right time to enter the program. The fact is that the yield of the investment program is not a constant value, and it may drop off right after your entry. You will not find a single manager, whose chart looks like an infinite upward staircase so how can you choose the right moment and invest competently? I hear you ask...

First off, you’ll need to assess the history of the trading manager. Let's look at two cases: with a history of 1 to 3 months and with a history of 3 months. The reason for this division is that it is rather difficult to assess the prospects for a "young" account, and as you may already be aware, there will only be “young” accounts during the first month after the full platform release.

The peak of profitability determines the appropriate time to start an investment in an investment program. So in-turn you’ll need to look at the account with a history of up to 3 months. If the manager did not have a single drawdown, which is almost impossible, the program is at its all-time high. This means that the yield of the investment program will probably start to decline soon, and you will likely lose a part of your investment.

Like traditional ratios, the peak of profitability does not always help when evaluating young investment programs. In such case reading a description of the investment program in order to understand the trading patterns and strategies of the particular manager might be the most rewarding.

If you decide to invest in an investment program with a substantial history, then it is much easier to determine the best time to enter the said program. You need to look at the chart in its entirety or look at the statistics to find the maximum level of profitability on an all-time basis. If at the moment the account is above this level, then this is not the best time for investment. As in the case of a "young" investment program, a quick drawdown can begin immediately after the entry.

The period when the drawdown of the account does not exceed the historical maximum and is at an average level is ideal for entry. From that moment, correction and subsequent growth may have already begun so that you can get a nice profit.

If the account experiences the first drawdown in its trading history, then the risks are quite high as well. Naturally, it would be better if you did not invest when the current drawdown is much lower than the usual level.

If you want to catch up on previous advice, you can do so by following this link.

Have an awesome second half of the week, and we will see you next Wednesday with another part of advice!