ZuluTrade Risk / Account Settings Calculator

While ZuluTrade allows you to automatically allocate your funds (i.e. assign the number of lots) to a signal provider, their method is not very useful when a Signal Provider (SP) has changed their strategy over time (because their calculation takes into account full previous trading history for the Signal Provider).

Below is another method for calculating the amount of lots to assign to a ZuluTrade Signal Provider you follow.

Assumptions:

  • The Signal Provider only traded instruments with USD as quote currency (e.g. EUR/USD, GBP/USD, AUD/USD, …). The calculations will not be relevant for Signal Providers who for example trade EUR/GBP or AUD/JPY).

Please note that this tool is provided for information purpose and use in demo accounts only. This does not constitute investment advice. Before you consider investing real money with ZuluTrade, please consult a financial advisor.

You can click here for an example of where to find the ZuluTrade Signal Provider data used in the calculations.

Please note that all these calculations and ROI figures are based on past results and therefore not necessarily indicative of future performance.

¹ Risk Definitions:

Very High Risk: Assumes that the maximum drawdown for the period used will not be repeated. by the ZuluTrade Signal Provider (SP). If it does, you’ll lose all your money. In addition, you’ll probably get a margin call well before this level is reached if the investment/allocation amount you used is the same as your total account balance. This risk level is a surefire way to lose all your money.

High Risk: This assumes that the historical drawdown level over the period evaluated will not be more than double the size in the future. Depending on the length of the period you use this is still an extremely risky approach, especially with system and longer term Signal Providers.

Medium Risk: This risk level assumes the drawdown level will not reach 5 times the level used in the risk calculation. I.e. this gives you some kind off buffer to cope with an increase of drawdown of the Signal Provider in the future, though there’re plenty of examples on ZuluTrade where trader’s drawdown levels increased during certain  market conditions.

Low Risk: This level of risk assumes the drawdown level will not be higher than 10 times the level used in the calculations. I.e. this gives you a significant buffer to cope with increased drawdown levels of the signal in the future.

All these calculations are based on the premise that the future trading strategy of the ZuluTrade Signal Provider will be similar to their previous trading strategy. If the Signal Provider starts opening more trades and use wider stop levels the value of these risk level calculations will diminish. You can always re-do the risk level calculations on a monthly basis to take into account the latest historical data and adjust any ZuluTrade (demo) account settings accordingly.

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Comments

  1. Thats a very helpfull tool ! Thank you very much! Now i have job to do and test all my zulu providers ))))

  2. plusonic says:

    Thank you for this calculator, exactly what zulutrade followers need!

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