This review was written on July 8th 2013 when Chaoeur was ranked 54th in the ZuluRanking and had just under $650,000 of money following their signals. They’d been trading for 32 weeks on ZuluTrade and based on Chaoeur’s trade history, here’s our review of this China based trader:
- send signals from a LIVE trading account
- consistent returns (only 1 small losing month out of 8)
- trades and specialises in 1 currency pair
- clear stop levels
- low historical drawdown
- good historical risk/reward ratio
- limited strategy description & no communications
- maximum number of open trades unclear
- not traded yet for many followers
The profit graph for Chaoeur (see image below) shows a fairly gradual increase, albeit with a 3 month plateau in the middle (March to May 2013). Of the 8 months trading on ZuluTrade, 7 ended in profit, and only 1 in a small loss. The average return is almost 400 pips per month, which is very healthy considering this has been achieved by Chaoeur for a maximum drawdown of 285 pips. I.e. the maximum drawdown is less than the average monthly returns, meaning good reward for the risk taken.
Chaoeur’s strategy description is unfortunately very limited (maybe to do with the fact that there’s a language barrier and they tried to use Google translate). There’re also no further communications, so we’ll have to look at the actual ZuluTrade trade history for Chaoeur to get a better idea of the trading strategy and principles. They only trade the EURUSD pair and apply a maximum stop level of 100 pips per position. When more trades are opened, they’re all opened in the same position. However Chaoeur doesn’t hold onto losing positions until they eventually turn positive (or hit their stop levels). On a few occasions Chaoeur closed their trades for small losses and opened trades in the opposite direction (obviously because they believed the market direction had changed). It therefore looks like they trade manually and adjust their positions based on the current market conditions.
Unfortunately there’s no mention in the strategy of the maximum number of open positions required to follow Chaoeur’s system (which isn’t very useful). So far a maximum of 8 positions were opened once and 6 on another occasion. So, risking 8 trades with stop levels of 100 pips would mean a total risk of 800 pips per trade cycle, which is not small and double the anticipated monthly returns. However the maximum drawdown so far was only 285 and from Chaoeur’s trading style so far, there’s no indication this ZuluTrade trader would let 8 trades run to their 100 pip stop level at the same time. I.e. so far they’ve managed the risk and drawdown appropriately, and as mentioned above, closed trades in small losses to avoid potential larger drawdowns or losses.
Chaoeur also sends their signals from a live trading account, meaning they trade with their own money. Hence you’d expect that this would also ensure they keep to their existing strategy and money management principles, and don’t increase risk/drawdown unnecessarily.
In summary, until now, this trader has generated some healthy returns for a relatively small drawdown. The fact that Chaoeur trades with a live account is very positive and should hopefully mean this ZuluTrade provider maintains their current risk management approach. However there’re never guarantees and so far this trader hasn’t traded for many followers yet (which has made some popular traders on ZuluTrade change their strategies and trading behaviours in the past).
Please not that this review was included here for educational purposes only. Investing on social trading networks can be very risky. Never invest money you cannot afford to lose. Always consult an independent financial advisor if you’re not sure whether this type of trading is right for you.