AlterInvestments Review - ZuluTrade Trader 2013

AlterInvestments Review ZuluTrade Trader August 2013

For today’s review, written August 29th 2013, we looked at the current highest ranked trader in the ZuluRanking using a real money account to send signals. AlterInvestments has been trading for 27 weeks on ZuluTrade, is ranked 51st and has just under $725,000 of real money following them. Based on AlterInvestments’ ZuluTrade profile and trade history, here’s our review of this Polish based trader:

AlterInvestments Pros:

  • sends signals from live real money account
  • low historical drawdown
  • good overall historical risk reward ratio
  • every month profitable to date
  • applied close stop levels & sound risk management approach to date

AlterInvestments Cons:

  • still limited trading history (6 months)
  • most profits concentrated in 2 out of the 6 months
  • results of last two months have stagnated

Review Summary:

The overall profit graph of AlterInvestments (see image below) shows an overall increase, though most of the profits were generated in May and June 2013. However, on a monthly basis every month so far was closed in profit. Total pips profit to date was 1,799 pips, which averages at about 300 pips per month. An average pips profit of 16 pips per trade is a very respectable number for this ZuluTrade signal provider.

AlterInvestments achieved these results with a maximum open trade drawdown of -40 pips and account drawdown of -177.6 pips. We do however slightly question the value of the -40 pips in the ZuluTrade profile since the worst trade so far was -75 pips and at that time we cannot see another open trade which would have hedged the -75 pip trade with at least 35 pips (we’ve send a support request to ZuluTrade and will keep you posted). Nevertheless, whether historical drawdown is -40 or -75, the historical levels are very low. With AlterInvestments’ trading style the account level drawdown is more important though, since trades use close stop levels and are closed in losses. The current level of -177.6 is very acceptable, though it is more than the profits in 4 of the 6 previous months.

We already touched on AlterInvestments’ trading style and their strategy description on ZuluTrade mentions their system is based on MightyOne Support/Demand techniques. In essence it’s a trend following system. I.e. it means the system should perform well during strong trending periods. While stop levels are often set at -10 or -15 pips, profits are left to run, with best trade so far +265 pips. With a strategy like this you’d expect more losing trades than winning trades which is also the case with AlterInvestments, since 40% of trades were closed in profit.

The maximum number of open trades recommended to follow this ZuluTrade signal provider or the maximum stop levels are unfortunately not provided. However, the worst trade so far was -75 pips (and this level was a rarity) and maximum open trades so far was 3. In the past AlterInvestments has however managed risk quite carefully, though it’s always good practise to use some ZuluGuard settings for any traders you copy.

This trader also sends their signals from a live trading account which is very recommendable and always provides some additional level of comfort in their risk management approach because their own money is at risk as well (however, it’s never a guarantee!). A nice touch as well is that they’re not afraid to use their own picture in their ZuluTrade profile instead of an random image. The main concern with this ZuluTrade trader is that most of their profits were made in 2 months while the rest of the time the results were just above break-even. Summer months often turn out to be a bit more difficult, with low volumes, and this may certainly have impacted AlterInvestments’ system. However, only time will tell if this was the case.

In summary, AlterInvestments has so far produced some decent results on ZuluTrade with a solid risk management approach. They also trade from a real money trading account, which is a positive sign. However, 6 months is still a fairly limited time to fully evaluate a trader. With most of the profits concentrated over a short period of time, it’ll be very interesting to see whether this trader can recapture their pre-summer form.

Any ZuluTrade trader reviews included on this website are for educational purposes only and don’t constitute investment advice. Inclusion of a trader shouldn’t be considered an endorsement of that trader. Trading on ZuluTrade and other social trading networks can be very risky. Never invest with money you cannot afford to lose.

AlterInvestments ZuluTrade Performance Graph August 2013

AlterInvestments ZuluTrade Performance Graph up to August 29th 2013

One Response to “AlterInvestments Review ZuluTrade Trader August 2013”

  1. Here the answer from ZuluTrade support in relation to the question on the maximum drawdown value:
    “the Drawdown graph consists of two lines: the orange line shows the Accumulated Pips and the blue line shows the Floating Equity of every day.
    The Accumulated Pips is the sum of the actual results of trades closed on that day, while the Floating Equity is the sum of the actual results of trades closed on that day minus the sum of all the Lows at a specific moment (the worst moment) on that same day.
    So in order to calculate a provider’s Maximum Drawdown statistic, we find the greatest difference between the highest (Accumulated Pips) and the lowest points (Floating Equit) yat the same day you can find at the whole of the Drawdown graph.
    By adding the two values (absolute values) you get the Maximum Drawdown in pips

    Whereas Worst Trade is looking at the worst DrawDown of a single trade. So if during your trading history the maximum DrawDown ( greatest Low) of a single trade was -75, that will be your Worst Trade.
    Note that this trade may in the end have closed in profit (e.g. +4pips) but it will still show as your Worst Trade.”
    I.e. with the use of ‘end-of-day’ values the calculation can indeed be correct since another positive trade was opened on the day the worst -75 trade was closed. However, as we mentioned, with this type of strategy, better to use account level drawdown when evaluating risk/reward.

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