duanxian(GBPUSD) Review ZuluTrade SP January 2013
This review was written on January 8th 2013. On this day duanxian(GBPUSD) was ranked number 1 in the ZuluTrade rankings. With almost $1.6 million following they’re 7th in rankings of popularity (by amount following). Duanxian(GBPUSD) has been trading for 99 weeks on ZuluTrade and based on the historical data (click here to view), here’s our review of this Chinese based Signal Provider:
- positive returns after almost 2 years
- no correct or clear strategy description
- very large historical drawdowns (high risk)
- no clear stop level strategy
Obviously the first thing to take note of is that this Signal Provider is currently top of the ZuluTrade rankings, while they’ve been in the top 10 most of the time since August 2012. Looking at the actual performance though it’s fair to say that the first 8 months were very flat, with some exceptional results in October and November 2011 which contribute for almost 33% of their total pip profits to date. I.e. the result in the first year were very erratic, though they seem to be smoother in their second year. Looking at the closed trades there were only 3 losing months to date (and only 1 > 100 pips) . However, if we include unrealised losses there would be another 3 losing months.
Duanxian(GBPUSD)’s strategy description seems very vague and only mentions their (supposed?) 30 years of trading experience and the fact that stop levels are set at 50 points. Not sure how accurate this is as some trades last week were down up to 53 pips and 2 weeks ago to 227 pips! Hence there’s no correct or clear strategy description. The limited status updates also don’t provide any useful insights.
Looking at the actual trading history on ZuluTrade, duanxian(GBPUSD) has traded on the GBPUSD pair for about half of the time (mainly in the first year), though they’re very much trading on every available pair at the moment. The maximum open positions is currently 30 and while they’re not opened in the same direction, they’re all opened in the same direction (i.e. bullish or bearish on the USD). Hence drawdowns can be large. Indeed duanxian(GBPUSD)’s maximum drawdown on open trades to date was 4460 while maximum account drawdown was 5480. In addition account drawdowns of 4000 or more pips have been reached on 4 occasions. An additional mystery (and worry for investors) is that it’s unclear whether duanxian(GBPUSD) applies any stop levels. Some trades were closed at the arbitrarily 500 pip level, though one trade even got to -563 in July 2012 before it retraced.
Hence anyone considering following this ZuluTrade signal provider has to clearly take into account the potential risk. A 4000 pip drawdown seems to be normal and there’re no guarantees the drawdown levels won’t be higher in the future. Over the long run, arguably duanxian(GBPUSD) ‘s results have been positive so investors with a long term view of the markets (and a reasonably large account) might be tempted by this signal provider.
Please note that any of our ZuluTrade signal provider reviews are include for educational purposes only. This review does not constitute investment advice. Trading on ZuluTrade or any other social trading network can be very risky as it involves trading on leveraged instruments. Never trade with money you cannot afford to lose.