For our first trader review of 2014 I’ll have a look at Ariva 1, a signal provider on ZuluTrade for the past 92 weeks. At the time of writing, January 16th 2014, they were ranked 39th in the ZuluRanking with a bit over $1.8 million following them, making them the 4th most popular trader. Based on Ariva 1’s ZuluTrade profile and historical trades, here’s our review of this Bulgaria based trader:
Ariva 1 Pros:
- signals sent from live account
- overall profitable
- over 1.5 years ZuluTrade history
- low historical drawdown & risk
- clear stop levels used
Ariva 1 Cons:
- low-ish average pips/trade profit
- slippage may reduce results significantly
- most recent month was the worst so far
When we look at the overall profit graph for Ariva 1 (see below) we notice an overall fairly gradual increase in pips. On a monthly basis 15 of the past 20 months were profitable. Maximum profit was 137.6 pips per month while the worst month (last December) was -59.90. Average returns per month are about 38 pips.
Ariva 1 achieved these results with a historical open trade drawdown of 43 pips (which is indeed very low). However with any strategy like this which uses short stops and a small number of open trades, we have to take into account the overall account drawdown as well. Taking into account closed trades, the worst drawdown was 119.2 pips in July 2013. (Please note that I’ve found a better/easier way to calculate total historical drawdown on ZuluTrade via Excel instead of looking at the profit graph. I’ll be posting this method next week, with instructions).
So while Ariva 1’s historical open trade drawdown was very low and less than their average monthly profits on ZuluTrade, the full account drawdown is actually more than 3 times the average monthly returns, and hence, not that great.
Ariva 1 describes their strategy as “a secure short term swing trading strategy trading the EUR/USD and GBP/USD pairs, with reasonable 30-35 pips Stop Loss on each trade”. The system is 100% mechanical, i.e. the signals are being sent by an EA. Ariva 1 mentions a maximum of 1 open trade at the time (though historically on a few occasions it was 2 trades for very short periods of time). Looking at the actual historical trades in their ZuluTrade profile the strategy description seems fairly accurate. Most trades seem to be opened on 15 min intervals, meaning this looks like when the EA scans the price action and makes a decision to buy, sell or do nothing. The system also doesn’t seem to overtrade (i.e. it doesn’t necessarily trade everyday).
A positive thing is that Ariva 1 sends their signals to ZuluTrade from a live trading account, with Alpari Ru (i.e. they risk their own money). They’re also fairly active in providing updates and responding to comments left by followers (especially the negative ones).
The main caveat about this system is the fairly low average returns per trade, especially when taking into account the slippage. I.e. even if the slippage you experience is only 1 pip per trade, your results would be 25% worse off. From their slippage graph it looks like some ZuluTrade followers experienced up to 4 pips of slippage per trade, which pretty much wipes out any profits they’d have made. Hence if you consider following Aviva 1, try with a small amount first to check the slippage in your account.
In summary, Ariva 1 is an automated system which overall takes a low risk approach by applying short stop levels and a small number of open trades. However the historical returns so far have been low as well (especially when including slippage), and when you consider risk/reward you have to take into account both.
Please note that any ZuluTrade trader reviews are included here for information purposes only. The inclusion of a trader should not be considered as an endorsement or as investment advice. Trading Forex can be very risky. Always consult an independent financial advisor if you’re not sure whether this type of investing is for you and never invest money you cannot afford to lose.