This trader review was written October 15th 2014 and looks at fxforwarder who have been trading on ZuluTrade for 88 weeks. Currently this Germany based trader is 20th in the ZuluRanking with just over $1,250,000 of real money following them. Here’s our review based on fxforwarder’s ZuluTrade profile and historical trades:
- overall profitable and fairly consistent returns
- over 1 year trade history
- follows own signals from live account
- only 2 losing months so far
- focus on 1 currency pair
- relative high historical account drawdown
- no clear stop levels used
- maximum number of open trades and maximum risk unknown
- likely high future drawdown with current Martingale type strategy
- relative poor risk return ratio
The profit graph for fxforwarder (see below) shows a fairly gradual increase with a few periods of drawdown. Of the past 20 months on ZuluTrade only 2 months were losers if we include unrealised PnL, which is pretty good. So far 5,285 pips have been made which averages at a little over 250 pips per month. Not massive, though certainly reasonable especially since fxforwarder’s results have been fairly consistent so far.
Average pips gain per trade however is only +6, which is a little low. If you would consider that some slippage will occur, then 1 pip slippage would reduce your profits by almost 20% compared to fxforwarder’s account.
The maximum drawdown so far was a little over 1,250 pips. Compared to fxforwarder’s average monthly returns of 250 pips this number is pretty high. It’s about the same as 5 months expected profit. In addition, when we look in fxforwarder’s ZuluTrade profile at the actual historical trades during the time of this drawdown (early September 2013), we notice that they were not stopped out, but a larger drawdown was only avoided because the market reversed. For example we can see that their worst trade at the time went as low as -208 before reversing and being closed at -87.4 pips.
At that time the maximum number of 12 trades were opened, and all of them were opened at incremental time intervals in the same direction and same currency pair (in fact fxforwarder only trades USD/JPY pair). So what this tells us is that fxforwarder seems to apply a Martingale type of trading strategy. I.e. they add to losing positions in the assumption or hope the market will eventually turn. As we all should know by now, this type of strategy can lead to high levels of drawdown if the market doesn’t turn. In defence to fxforwarder, it doesn’t seem the strategy is pure Martingale, since for example this month they closed some trade cycles in loss (a pure one normally only closes them when the market turns and they can close the series of trades in profit or break-even). Nevertheless, with this type of strategy it’s likely future drawdown may be higher and hence the risk reward is not looking that good.
This signal provider’s strategy description on ZuluTrade is a little limited, though they mention they get the buy signals from a break-out indicator. It suggests you don’t set your own stop-losses. However on an individual trade level it doesn’t look like fxforwarder applies any stops and it’s not clear at what level or at how many open trades fxforwarder pulls out if the market keeps going against their direction. Hence the total risk is fairly unknown and the only mitigating factor here is that fxforwarder now follows their own signals from a live ZuluTrade account as well (this was only recently though).
Fxforwarder also has two other systems on ZuluTrade, both of which have no followers and been discontinued. In terms of followers, this signal provider made about $10,000 in total for their top 5 followers so far. They also only started trading for a larger amount of followers in the past 2 months, after they moved as high as 10th in the ZuluRanking. A slight worry is that their recent performance has not been that great though it’s too early to judge whether this is because they started trading for a larger amount of followers and hence commissions, which as we know impacts some people’s trading styles.
So in summary, overall the results of fxforwarder on ZuluTrade have been fairly consistent. However, the average pips profit per month and per trade are low when we consider the risk based on the historical strategy used. I.e. the total risk is not very clear since the strategy seems to add to losing positions with no clear stop levels indication. The only mitigating factor to this is that fxforwarder follows their own signals from a live account (however there’s never a guarantee they follow all their own signals).
Please note that any ZuluTrade signal provider reviews are included here for educational purposes only. The inclusion of a trader should not be considered as an endorsement of this trader. Forex and social trading can be very risky. Never invest money you cannot afford to lose and always consult an independent financial advisor if not sure.