For this review we have a look at DailyBot SSI – EURO, a signal provider on ZuluTrade for 55 weeks. At this time, October 24th 2013, this trader was ranked 3rd in the ZuluRanking with just over $365,000 of real money following them. Based on DailyBot SSI – EURO’s ZuluTrade profile, here’s our review of this Columbia based signal provider:
DailyBot SSI – EURO Pros:
- overall profitable
- uses clear stop levels
- low historical open trade drawdown
- decent description of system used
DailyBot SSI – EURO Cons:
- do not trade with own money
- results not very consistent over time (account drawdown important)
- maximum number of required open positions not mentioned in the strategy (overall risk unclear)
- not traded for many followers yet
- quite a few other profiles (of which 3 bombed)
- no status updates
Looking at DailyBot SSI – EURO’s profit graph (see image below) we notice an overall increase in pips, though this was achieved in two stages (mid Nov 2012 until mid March 2013 and mid May 2013 until beginning Sep 2013). Anyone who’d started following this ZuluTrade signal provider in March would actually have had to wait almost 6 months before seeing any returns.
Total returns for DailyBot SSI – EURO on ZuluTrade so far have been 3,309 pips (average about 260 pips per month). Against an open trade drawdown of 200 pips this is pretty impressive. However with a system like this where losses are taken, since trades aren’t left open indefinitely, we have to have a look at the account drawdown as well. The maximum account drawdown so far was 817 pips (caused by a series of losing trades between March and May). Hence against this figure the returns for this trader are a bit less impressive.
DailyBot SSI – EURO’s strategy description in their ZuluTrade profile is pretty clear (and it’s also nice that they use an actual photo instead of hiding behind some random graphic). He mentions that they use an automated trading robot and system based on a neural network algorithm (i.e. the system tries and improves itself). The strategy also states that they used a maximum stop loss of 200 pips per trade, though currently that has been reduced to 75 pips. This ZuluTrade trader also mentions that they put the stop level to break-even once the trade is 80 pips in profit.
There’s no mention however of the maximum number of open trades needed to follow the system. Historically the level seems to be 6, though because the system seems to trade in potentially every pair it’s unclear whether at some stage more simultaneous open trades will be triggered. When multiple trades are opened they’re however normally opened in different currency pairs. Depending on the pairs and direction this sometimes has an overall hedging effect which reducing risk/drawdown. Hence the positive thing is that the strategy doesn’t involve opening new trades to cover already open losing trades (like Martingale strategies).
It’s also not clear what the profit target is from the strategy description, though it’s clear that DailyBot SSI – EURO’s system targets large profits and trades are left to run until they’re achieved. Best single trade so far was 379 pips. However, when you look at the actual trade history in their ZuluTrade profile and rank the results by the “High” column we notice some interesting behaviour. In the first 6 months quite a few trades were massively in profit (> 400 pips) before they gave away over 200 pips profit before getting closed out. It seems like the system got adjusted since then. Over the past months large profitable trades clearly seem to be closed at +300 pips which therefore seems to be the current profit target. It would’ve been useful if DailyBot SSI – EURO would mention such changes and the reasoning behind them, though this trader doesn’t provide any status updates on ZuluTrade at the moment. Nevertheless this does seem to suggest that their “algorithm” learns over time.
Anyone who’s read our reviews and ZuluTrade tips before will know that we normally are not a massive fan of pure fully automated trading systems and robots. In my opinion they’re only as good as the trader managing them and while I’ve no doubt of the value and results of some of them in the short term, better results are normally achieved when they’re used in combination with an experienced trader manually looking after the trades (and taking into account fundamentals). This is especially true when fixed stop levels or profit targets are used as is the case here. For example, assume DailyBot SSI – EURO’s system had a trade open in +275 pips profit just before the release of the US NFP data (which regularly moves pairs 100 pips either direction). At that stage it would be gambling 50/50 to win either an extra +25 pips (because even if the news goes your way and spikes +100 pips your way you’d be closed out at +300 pips) or give up -100 pips. We’ve seen this happen with plenty of pure system traders.
There’s nothing in the strategy description which seems to suggest that DailyBot SSI – EURO manually intervenes with their algorithm. Earlier trades certainly seem to suggest they didn’t either. However there’s one specific recent trade which might suggest otherwise. A recent EUR/AUD trade was closed on October 17th 2013 one minute before the release of the US unemployment claims, locking in +154,1 pips profit. Without any further information (e.g. status updates) it’s unclear whether this was just coincidence, or whether DailyBot SSI – EURO did indeed close this trade in profit because they didn’t want to gamble on the outcome of the claims number. Time will tell. Obviously there’s nothing stopping a ZuluTrade follower to apply their own strategies when they follow automated systems and close trades earlier in profit in their account if they like. With regards to DailyBot SSI – EURO, also worth noting that they currently don’t trade with real money and have quite a few other profiles running on ZuluTrade, 3 of which have a bomb icon next to it.
In summary, until now the overall results of this ZuluTrade trader have been positive, though they have not been the most consistent. Nevertheless, so far there haven’t been large open trade drawdowns, though the account drawdown level needs to be considered too, since losing streaks can accumulate. Looking into DailyBot SSI – EURO’s individual trades does seem to suggest their trading algorithm is being adjusted over time and they might even manually intervene before news releases. However, without any updates from this trader it’s not totally clear if this really is the case. They also haven’t traded for many followers yet, though that’ll no doubt change soon since they’re now ranked 3rd. Hence performance over the next 6 months will be more interesting to evaluate.
Please note that any trader reviews are included here for educational and information purposes only. They are not investment advice and the inclusion of a trader isn’t necessarily an endorsement of a trader. Always consult an independent financial adviser if you’re unsure whether trading on ZuluTrade is right for you. Never invest money you cannot afford to lose.