Cartesian was brought to our attention this week by one of our visitors. While 26 weeks history on ZuluTrade is still pretty and they’re not in the top 100 ranking yet, at the time of writing this review (31st May 2013) they did have just over $350,000 following them. Hence it might be a good time to have a closer look at them and based on Cartesian’s historical ZuluTrade trade history to date, here’s our review of this Latvian signal provider:
- profitable every month to date
- smooth profit graph
- specialises in 1 instrument
- reasonable low historical drawdown
- strategy not clearly explained
- no communications
- stop levels unknown and hence potential future drawdown unknown (and high)
- still limited history and not been trading with many followers (i.e. commissions)
- known as 4 other systems (while profitable unknown why)
- unclear if automated or manual trading style (though looks automated)
- do not trade with their own money
When looking at the profit graph for Cartesian (see image below) you’ll notice a very gradual increase, which is normally a good sign. Profit per month has also been pretty consistent, averaging almost 200 pips per month without any losing months to date. The open trade drawdown to achieve those results so far has been 305 pips, which is reasonable, though still 50% more than the average monthly profits (so not perfect in terms of risk reward).
Cartesian describes their strategy as looking for “high probability Price Action” set ups on 1 hour charts, using existing techniques which they perfected. However, this is unfortunately the only information provided, and there’s no information on stop levels used or the maximum open trades the system uses. There’re also no other communications on their ZuluTrade profile over the past 26 weeks.
Hence we look at Cartesian’s actual ZuluTrade trading history to give us more clues on that. So far the maximum number of open trades was 4, though this was really at the beginning and since then it’s been maximum 2. So perhaps we can assume 2 is the maximum. It’s also clear they only trade 1 pair, GBP/CAD. With regards to stop levels it’s actually more difficult to identify what level Cartesian uses. If we look at the time of the maximum drawdown, one of the 2 open sell trades reached -250 pips, while the other reached -55 pips. At that stage the market turned and eventually this trade cycle was closed with one trade loosing -124.8 pips and the other gaining 70 pips. So while this makes it clear that Cartesian is ok to close some trade cycles in loss (i.e. they don’t leave trades open until they eventually get back to break-even or profit), it’s not clear what stop levels they use. Clearly 250 was not a stop level, since the trade wasn’t closed out. In fact we cannot see any trade which hit a level at which they got stopped out, since none were closed at their worst level.
This is a bit worrying since, even if we assume maximum 2 open trades, with no clear stop levels, the future drawdown is totally unknown. And with average returns of 200 pips per month, it’s difficult to justify large drawdown levels.
Cartesian also doesn’t make clear in their strategy description whether they trade manually or use an automated trading robot. However, the fact that the EA symbol is displayed in their ZuluTrade profile and that the entry times of the trades are spread across 24 hours, means we can pretty much assume they’re using an automated system.
Because Cartesian doesn’t have many live followers yet, there’s no slippage info available yet. Because they trade the GBP/CAD pair it’s however important you check the slippage if you would follow a trader like this on your live account. This is because the GBP/CAD pair is considered a more exotic Forex currency pair and the spread can range from 3 to 15 pips (yes really!) depending on which broker you use.
Another interesting thing we noticed is that Cartesian is also known as 4 other systems on ZuluTrade: Gordian, Tellus, Zennon and Cyrillus. We had a brief look at them too and all of them trade the GBP/CAD pair, have been running similar number of weeks and have generated almost the same profit. However not all had the same positions open at the time of writing. We don’t see much difference between them and don’t know why 5 similar systems are managed, though it justifies the point that it looks like these are automated trading robots.
In summary, Cartesian has shown some early promise with some very consistent results for a reasonably low drawdown. However, the lack of stop levels, lack of communication and the fact this looks like an automated system, makes it still a fairly risky signal provider to follow (especially in terms of risk reward), even with a maximum of 2 open trades. Also, as we mentioned many times before, 26 weeks is still very short period to evaluate a trader or system, especially since they also haven’t been trading with many followers on ZuluTrade yet.
Please note that this ZuluTrade signal provider review is included here for information purposes only. Our reviews should not be considered as investment advice and inclusion of a trader should not be considered as an endorsement. Trading Forex is very risky. Always consult an independent financial advisor if you’re not sure whether this type of trading is right for you.