ZipSignals Review (Our Opinion)
Please note that most of the ZipSignals ceased operations in December 2014 and their website functionality stopped. We still keep this page and review online as it may be useful to some visitors, or people who like to know how the platform used to work.
ZipSignals launched their trade copier platform in 2008, making them one of the first Forex solution providers to offer a service that lets investors automatically copy trades from other traders. Our review tries to cover all aspects of the ZipSignals platform. As with all our social trading network and platform reviews, this one is also based on our experience with a real money live Zip Signals account.
ZipSignals isn’t a Forex broker themselves, so in order to copy the trades from the signals providers on their platform, you need to sign up with a separate broker. There are two options for doing this and the cost of using the platform differs for both.
Option 1: Sign-up and connect through one of their partner brokers
This will be for most investors the more popular option, since it means you can copy as many trading systems as you like for free. This option is free because ZipSignals will receive an Introducing Broker fee which they’ll use to cover the costs of running the platform and to reward the traders you can copy. Currently there’s a choice of 6 partner brokers to choose from (FXCM, Gallant Capital Markets, Liquid Markets, Forex FS, FinFx and Ava Trade). While this choice isn’t massive, they cover different territories and also allow you to open accounts in the major base currencies.
Option 2: Connect your own MT4 compatible broker to ZipSignals
This option requires you to run your own MT4 terminal (on your PC or via VPS), install their Expert Advisor program and connect it 24/5 to the ZipSignals platform. You would also need to pay a monthly subscription fee for each of the trading strategies you copy. This fee ranges from $100 to $500 per system and per account. Obviously this method is more complicated to set-up though for serious investors who prefer to use their own broker it may be the preferred solution.
For the purpose of our own live account and the basis of this review we went with Option 1. After signing up on the ZipSignals website, you select the broker you want to join (FXCM in our case), then you follow the sign-up procedure of this broker. Once you’ve funded your account, you’ll get your MT4 credentials which you then enter on the ZipSignals website when you request for your broker account to be linked.
The whole process took about a week for us (the 2 slight delays being waiting for the funds to be processed and for the accounts to be linked). Obviously this isn’t as quick and straight-forward as the sign-up procedure with the social trading platforms who offer their own brokerage service, but overall it was still fairly intuitive.
The minimum deposit requirements will depend on the broker you choose, and while ZipSignals mention they have clients with $100 balances, they also recommend a minimum account balance of $500 to use the service.
If you want to try the service first then you can also follow Option 1 and connect with a demo account. You can try any ZipSignals system for free during the 30 day demo period.
Who are the traders / signal providers / trading systems you can copy
As we all know, ultimately the most important factor in relation to your success when using a trade copier platform is the quality of the traders you copy. ZipSignals refers to them as ‘signal providers’ and ‘trading systems’.
A positive factor is that ZipSignals mention that they discourage “fly by night” Forex traders by putting every signal provider though a 6 week screening process. During this trial period they evaluate every trade taken and only those Forex signal providers with “exceptional trading strategy and risk controls” are accepted and made public to their investors subscribers.
While we haven’t tried and evaluated every single trading system on Zip Signals, there are however some interesting observations to take from looking at the list. Signal Providers can send their signals from demo or real money accounts, though the majority (>65%) send their signals from a demo account. I.e. the majority of providers don’t risk their own money. When you rank the trading systems by number of weeks, the longest running at the time of writing was 202 weeks on ZipSignals. However most of the systems with a long history have a maximum equity drawdown of higher than 100%. I.e. many of the longer term systems might have lost you significant amounts (depending on when you started investing in them and how you managed your risk settings of course).
Nevertheless some of the newer systems are displaying some decent results and hence may have some good potential, while there’s at least a choice of real money accounts to copy as well (though unfortunately ZipSignals does not share the value of the actual real balance).
The signal providers are rewarded when their trades are copied. They either receive 0.5 pips per round turn trade copied or 70% of the fixed monthly fee they set. What is worth nothing though is that the fee structures are not linked to their performance. I.e. the signal providers will get paid whether or not their returns are positive.
Unfortunately we’ve not been with ZipSignals for over 6 months, so as with any network and platform reviews, we will also aim to keep this review up to date once we have more information on the longer term performance of the systems. (Click Here to view the latest list and performance of the ZipSignals trading systems)
Selecting the trading systems to copy on ZipSignals
A key component of each trade copier or social trading platform is the information it provides on the systems you can copy and the features available to evaluate them.
In terms of information provided, for each Trading System, ZipSignals provides:
- a strategy description
- number of weeks trading, average trades per week & total trades to date
- total pips return, total return % and average monthly return %
- maximum equity drawdown % & maximum drawdown weeks
- win percentage
- shortest, longest and average trade hold time
- an overall performance chart
- a chart with the distribution of the symbols trades and trade sizes
- fully transparent trade history, including current open trades
- Zip Signals Factor (0 to 100) which takes into consideration average month return, maximum drawdown ratio and weeks traded
While ZipSignals claims that the information they provide is fully transparent, we would say that’s almost correct. The only two pieces of useful information they don’t share in our opinion are the amount of copier each system has (so you can see which ones are most popular with other investors) and the amount of real balance of the signals providers who use live accounts (so you can see how much they risk themselves).
While the data provided is pretty inclusive, one area where we feel ZipSignals can be improved is in the features available to search through all their available trading systems. Currently there’s no actual search functionality and you can only rank the systems by one of the following 5 factors: ZipSignals Factor (default), Weeks Trading, Total Pips, Total Return and Trading System Name. I.e. you cannot really search for systems with a historical drawdown of less than 10%. You’ll need to look through the list manually to identify them.
Also, while ZipSignals provides every historical trade, it’s almost impossible to view more than the last 200 to 300 trades because they all appear gradually on your screen. Since there’s also no way to download them for use in Excel, it’s pretty much impossible therefore to do your own off-line analysis and you have to really on the indicators they provide.
Zip Signals risk and money management features
When you’ve decided which ZipSignals Trading System to copy you have a number of options to determine the size of the copied trades:
- Use your account balance to determine opened lot size, and adjust it with an order size Multiplier (%). This method is best if you want to copy trades proportionally and have the trade size adjusted based on your account balance.
- Use a fixed balance to calculate opened lot size, which is best if you want to allocate a specific amount of your total balance to a specific Trading System (so you won’t lose your full account balance if the signal provider loses theirs).
- Use a fixed lot size, which means every signal you take will be opened in the same size you specify, regardless of the order size used by the system.
In addition you can also specific the maximum deviation and slippage in terms of pips you’re willing to accept when the trade cannot be opened at the same price. While the options may not look the most intuitive, overall ZipSignals certainly offers enough possibilities to allow you to set the risk you’re prepared to take for each system you want to copy, while also allowing you to partially protect your account.
Once your trades start being copied you do however have to check your progress in your broker account. From there you’ll be able to view your results and close any open trades you don’t want manually. I.e. ZipSignals does not provide a trading interface itself, though at any time you can change your system copy settings or stop copying a system.
We already mentioned that when you sign-up with one of ZipSignals’ partner brokers, using the platform is totally free (i.e. cost is the broker spread only). Only when you use your own MT4 compatible broker do you pay a monthly subscription fee per trading system you copy.
With any review though we have a look at the slippage factor as well, since it can have a significant impact on your performance (and hence be costly). Especially with a service like Zip Signals where it’s unlikely that the signals you’re copying are sent from the same broker that you’re using, slippage can be a potential issue.
In fact, based on our actual experiences, we so far have to conclude that slippage is fairly high. E.g. when copying “Jose Trader”, their trading system with the highest ZipSignals factor, we noticed slippage of up to 3 pips per trade with average slippage just over 2 pips when comparing our actual results with those reported for Jose Trader in their Zip Signals trade history.
To put the impact of this into context, Jose Trader so far achieved a healthy total return of 6,635 pips. They achieved this by doing an average of 75 trades per week over their 54 week trading history, which is a total of 4,050 trades. If the average slippage you experience is 2 pips per trade, instead of making any returns, you’d actually be making losses when copying this trader.
Hence, while the cost of using ZipSignals is very low, you’d really need to consider the slippage as well. It’s therefore recommended to test any system you consider copying with a small amount first (so you can first-hand experience the slippage between your broker and theirs). In addition, choosing to copy a trading system with a high average pip return per trade (e.g. 10 or more) will also reduce the impact of slippage. (The ‘average pip return per trade’ indicator is not provided by ZipSignals but can be easily calculated from the total pips returns, number of weeks trading and average trades per week, all of which are provided.)
ZipSignals does provide a US telephone support number and live support chat online. Unfortunately so far we’ve not used any of those. We did however try their support form a few times and always got a response within 24 hours.
In terms of documentation, there’re some FAQs available on their website, which may be a useful read, though overall they’re fairly basic.
While not tested I have a fair feeling support is only available in English. The site can be viewed in other languages though only by using Google Translate.
ZipSignals as a platform is completely focussed around the functionality to allow investors to automatically copy the trades from other traders. The only social interaction point is that the traders/signal providers can leave a description of their system, which they can occasionally update (though I’ve not seen this actively done in practise). Hence there aren’t really any social capabilities such as user comments, forums or ratings.
ZipSignals review Pros:
- Low entry cost (accounts from $100)
- Low running cost (free if sign-up via Zip Signals partner broker)
- 30 day demo available
- Good choice of risk management controls and options
- All signal providers need to pass a 6 week trial period
- Some signal providers available who use real money accounts
- Most data is fully transparent (includes current open trades)
- Live accounts can be opened in different currencies
ZipSignals review Cons:
- No advanced search functionality to filter all trading systems
- Very difficult to view all historical trades (only last 200 realistically)
- Real money balances not shared
- Fairly high slippage experienced so far
- Unable to download full trade history for off-line analysis
- Many older trading systems look to have experienced high equity drawdowns
- Signal Providers compensation not linked to their performance
- No social interaction with traders or signal providers possible
In summary, ZipSignals is a well established trade copier platform with over 5 years experience. The entry and ongoing costs are very low (pretty much spread only).There’s a decent choice of trading systems available to copy, all of which are evaluated by them for 6 weeks, while some of them risk their own money too (though how much isn’t shared). The search capabilities to filter through the available systems are very basic though. The data displayed by ZipSignals for each trading system looks transparent, though with the lack of easy access to all historical trades it’s impossible to do your own further analysis. Many of the older systems displayed also seem to have experienced high drawdowns which could be a worry. The money management features allow you decent control over the risk you take when copying one or more trading systems. The ZipSignals platform is not fully integrated though and you’ll need to check your performance using your broker interface. So far we’ve experienced fairly high slippage, which can significantly impact your performance. Of course this will depend on your and the signal providers brokers, as wel as the type of trading system you copy, so it may not be the case for everyone (though definitely something to check and keep in mind). You can try the ZipSignals platform for 30 days with a demo account as well which is obviously useful.