For this trader review (written August 7th 2014) we take a look at arbtrader CHIMERA, who’s been trading on ZuluTrade for 64 weeks. They recently moved up to the #4 position in the ZuluRanking with just under $1 million of real money following them. Based on arbtrader CHIMERA’s ZuluTrade profile and trade history, here’s our review of this UK based trader:
arbtrader CHIMERA Pros:
- overall profitable
- past 5 months fairly consistent returns
- focuses on 1 currency pair
- over 1 year trading history
arbtrader CHIMERA Cons:
- does send signals from demo account
- relative high historical drawdown (poor risk reward ratio)
- no fixed stop levels used
- high potential future drawdown
arbtrader CHIMERA’s profit graph (see below) shows an overall increase, with 3 very significant drawdown periods. The last of these drawdown periods was in February 2014 though and the last 5 months have been more consistent with a fairly gradual increase in pips. Overall a profit of about 5,750 pips has been booked so far, which averages at about 380 per month over the past 15 month period on ZuluTrade. The average pips per trade profit for arbtrader CHIMERA is 14, which is pretty healthy and means the impact of slippage will normally be small. The fact that only the GBPUSD pair is being traded also means slippage should be low, since the spreads on this pair are pretty similar among most brokers.
These profits were however booked against a maximum drawdown of almost -1,600 pips. This is more than 4 months average returns, meaning arbtrader CHIMERA’s risk/reward ratio is not very good. Their ZuluTrade winning ratio of 79% seems to suggest that trades are left open a bit longer until they become profitable, hence leading to the occasional drawdown periods.
In terms of strategy, arbtrader CHIMERA is pretty clear in mentioning that this is a fully automated EA trading robot which uses a mechanical trading system to identify support and resistance. arbtrader CHIMERA also mentions up to 9 trades will be opened consecutively on ZuluTrade. However there’s no mention of any stop levels being used.
In fact when we look at their trade history on ZuluTrade it’s clear that no fixed stop levels are currently being applied and used by arbtrader CHIMERA. We explained this before. To identify this, you look at the lowest level single trades went down to (click on the “Low” column) and you compare this number with the actual level the trade was closed at. If none or hardly any of the trades were closed at their lowest level we can assume no stops were used. In the case of arbtrader CHIMERA the lowest trade went down to -304 pips. However it was closed at -104.9 pips, meaning that if the market hadn’t reversed at the time it did, the drawdown levels would even have been higher.
With up to 9 open trades and no clear stop levels it’s highly likely the future drawdown may be even higher than the historical one. But in all fairness, arbtrader CHIMERA clearly mentions in a status update to expect periods of drawdown with this strategy and to ensure you use the correct leverage in your ZuluTrade account. It also looks like the live ZuluTrade followers so far are using fairly conservative settings because until now the maximum amount a follower has made from this signal provider is about $2,500.
In summary, overall the result for arbtrader CHIMERA over the past year have been profitable. However, these result were achieved against a relatively high level of drawdown, which should also be expected in the future (even though the past 5 month on ZuluTrade have been relatively steady). arbtrader CHIMERA uses a pure automated trading robot and regular readers of our reviews and tips will know that we’re not the biggest fans of pure automated systems. These automated robots normally don’t take into account any fundamentals and can therefore often lead to large drawdowns when the markets take some significant turns (especially when no clear stop levels are used). In our opinion there’s nothing wrong with using EAs and automated systems, though in our experience they operate better when managed by professional traders who can intercept and adjust the trades based on fundamental information and news releases.
Please note that any ZuluTrade trader and signal provider reviews are included here for educational purposes only. They do not constitute investment advice. Forex trading and using social trading networks can be highly risky. Never invest money you cannot afford to lose.