For today’s review (20th February 2013) we decided it was time to look for another ZuluTrade trader who trades with their own money (a type of trader which is unfortunately in the minority on the ZuluTrade platform). Using the advanced search tool we select “trading with their own money” and pick the one with the highest ZuluRank. At the moment this is Call Of Pips, ranked 12th and almost $350,000 of real money following (360 followers). They have been trading on ZuluTrade for 54 weeks and based on Call Of Pips’ historical performance (view here) here’s our review:
Call Of Pips Pros:
- follow their own signals with a real money account
- consistent positive monthly returns
Call Of Pips Cons:
- no clear strategy description
- relatively high historical drawdown
- no stop levels as part of strategy
- up to 30 open trades
- strategy will lead to potentially high future drawdowns
When looking at Call Of Pips’ ZuluTrade performance graph (see below) you’ll notice a gradual increase interrupted with 4 significant drawdown periods of more than 1000 pips. The performance per month graph is actually fairly impressive (if you don’t include unrealised PnL) since the monthly returns are very consistent. I.e. there’s not much difference between the first few months on ZuluTrade and the rest (as often as the case with other signal providers) and the worst month was December 2012, though this was still 390 pips profitable and probably mainly due to the fact that their trading volume was at its lowest level that month because of the holiday season. Including the unrealised PnL it’s only July 2012 which sticks out due to a high drawdown which was carried into August.
So while it’s clear that some very decent gradual profits have been booked by Call Of Pips (8612 pips to date, averaging just under 750/month), it’s also clear this has been done against a few significant drawdown periods. The highest drawdown to date was 3400 pips, which at the time was almost 80% of all the profits made so far. Another way to look at it is that it’s almost 5 times the average monthly return.
Looking for the reasons of these drawdowns we’ll try to understand the strategy Call Of Pips follows. Unfortunately the strategy description is fairly un-descriptive, and statements like “I’m a Powerful trader” and ” the only thing you have to do is enjoy & relax” more added to our amusement value than filling us with any confidence. The key points to take from the Call Of Pips strategy description is that they want you to allow for 30 open positions and that they will close any trade cycle (total) of open positions in profit. Seasoned traders will already work out from this what the ZuluTrade strategy is likely to be and you just have to look at the trading history in any of the drawdown periods to realise that Call Of Pips’ strategy is to continue adding new positions to any losing positions until the market eventually turns, and the total positions return to break-even or better.
So far this tactic has worked without blowing their account, though with some periods of high drawdown in the past. No doubt in the future you should expect some high drawdowns as well. Not sure whether it’s the luck or curse of the reviewer here, but we actually started writing this review at the time the GBP MPC Meeting Minutes and Claimant Count Change numbers came out at 9:30GMT. Before these scheduled news releases (which due to the GBP’s recent weakness were likely to have some impact) Call Of Pips had 6 open SELL GBPUSD trades which in total were just slightly in profit. The news (specifically the minutes which showed a QE vote split at the last meeting and potential for future rate cut and more QE, all bearish for GBP) caused the GBPUSD pair to drop down about 140 pips. On the move down, another 11 SELL trades were opened. The fact that trades are opened with 10 pip intervals and during the news release also suggests that they’re opened by a trading robot (and not manually). So again Call Of Pips is hitting another high drawdown period (1300 pips), though with the amount of open trades at the time of writing only a reversal of 75 pips was needed to close all at break-even. On the other hand though any further losses would significantly increase the drawdown. By the time you read this you can probably check which way the market went and whether Call Of Pips got out in profit or whether the drawdown is still growing (click here to check).
The positive things about Call Of Pips is that they are following their signals with a real money account (even though it could be as low as $0.1 per pip) and so far this ZuluTrade signal provider has been consistently profitable. However, their strategy of adding to losing positions until (or in the hope) the market eventually turns is extremely risky and is highly likely to lead to massive drawdowns (and margin calls for followers).
Please note that any ZuluTrade reviews are included on this website for educational purposes and do not constitute investment advice. Trading with ZuluTrade in leveraged Forex instruments can be very risky. Never trade with money you cannot afford to lose. If you’re unsure, contact an independent financial advisor.