We’ve been asked the question on whether ZuluTrade “is safe” a few times, so based on our knowledge and experience as a customer, I thought I’d write down my opinion on this.
ZuluTrade Inc. is incorporated and registered in Greece and fully compliant to all EU regulations for financial companies. Their CFTC, NFA Member ID is 0389149 and to our knowledge this is a totally legit business.
Is my money safe?
To answer this question you must first understand that ZuluTrade is “only” the social trading platform which connects traders (aka signal providers) with investors. As an investor, your actual money is kept in the broker account you use to connect to ZuluTrade. There’s a choice of over 50 brokers from all around the world, so how safe your money is will depend on the financial stability of the broker and the regulations of the country they’re registered in. E.g. UK residents are protected and their capital safe up-to £50,000 in case they invest with a UK regulated broker which goes out of business. Hence the liability here is not with ZuluTrade but with the broker.
However in the case of AAAfx, which is ZuluTrade’s own broker, the case is obviously slightly different. AAAfx was founded in 2009 and is registered in Greece and fully compliant to all EU regulations.
Moreover, AAAFx investors are protected by the Greek Guarantee Fund according to the European Directive 93/22/EEC. In the event of an Investment Firm’s bankruptcy or failure to fulfill its obligations from the provision of investment services, this Greek Guarantee Fund will act in order to reimburse the investors and/or any of the contracting parts. The maximum amount of compensation is €30,000 per investor (more information can be found here).
Is my investment safe?
The safety of your investment all depends on yourself, and in particular on which traders you decide copy and your risk management settings. If you invest $1000 with ZuluTrade and select to copy a trader with a history of drawdowns larger than 1000 pips, you pretty much will lose your full investment and hence your investment clearly isn’t safe.
However, ZuluTrade provides a wide range of tools to help you protect your investment. E.g. you can set the maximum you allow a trader to lose before you automatically stop copying them (e.g. $200 if you only want to lose a maximum of 20% of your investment from the previous example). Or you can set the maximum amount of positions you copy for each trader in your portfolio. In addition you may find our ZuluTrade tips on selecting traders and money management settings useful too.
I hope this clarifies the question on how safe your money and investments are with ZuluTrade. As always, trading leveraged Forex instruments is considered high risk, so never invest money you cannot afford to lose. No “safe” trading system has ever been made, so there’re no guarantees of future profits or lack of losses.