Eustar Review ZuluTrade Trader July 2013
When we wrote this review on July 5th 2013, Eustar was ranked 31st in the ZuluRanking with just over $1,750,000 of real money following them. With 83 weeks on ZuluTrade, they’re a fairly seasoned trader. Based on Eustar’s trade history on ZuluTrade, here’s our review of this Japan based trader:
- consistent returns (only 1 losing month out of 20)
- trade/specialise in 1 currency pair
- follow their own signals from a live account
- no clear strategy description
- maximum number of open trades or maximum stop level unclear (hence total risk unclear)
- no communications
- use Martingale type of trading strategy
Eustar’s profit graph (see below) shows a fairly gradual increase, especially for the past 11 months. 18 months were profitable so far, with 1 loser and 1 break-even (Eustar didn’t trade that month). The average return per month is just over 180 pips, though for the past 3 months the results improved to over 300 pips per month. This is normally a good sign since many ZuluTrade traders seem to fade away after a good start or after they start getting more followers (and hence commissions).
Looking at Eustar’s strategy description, unfortunately there’s not much information provided. Expect for the fact that this ZuluTrade signal provider tell us they trade manually (i.e. not using an EA) and the fact they aim to provide positive returns overall (don’t they all?). However, there’s no info on the actual strategy used, maximum number of open trades required or stop levels.
Hence we have to look at their actual ZuluTrade trade history to give us some more info on how Eustar trades. As the name suggests Eustar specialises in trading the EURUSD pair. So far, the maximum open trades was 7 and the maximum a single trade went into negative was -229 pips. That trade however didn’t get stopped out at -229 and reversed at the time. Hence it is not clear what/if stop level are used. We cannot find a single trade which looked like it was stopped out by a stop level (normally when the value in the ‘Low’ column is the same as the pip loss taken in the ‘Profit’ column). When looking at the sequences when more than 2 trades were opened, it’s clear Eustar uses a Martingale type of trading strategy, in the sense that they keep on opening extra positions once the market is moving against their initial positions (they often seem to use a 20 pip interval). If not managed carefully, these type of strategies can lead to massive drawdowns and losses. So far the maximum drawdown for the ZuluTrade provider was 894 pips, which while overall not massive, is still fairly large compared with expected returns of 180 pips per months. With no clear stop level being used it’s unclear how much you risk and with up to 7 open trades this can be quite a bit. The one key mitigating factor here though is the fact that Eustar follow their own signals from a live ZuluTrade account. Hence one would hope that they do manage risk somehow and don’t let the drawdown accumulate exponentially.
In summary, while the returns for Eustar have been very consistent and they do follow their own signals with their own money, the fact that they use a Martingale type of strategy still makes this a fairly high risk provider. Hence risk/reward is fairly low, and it’s all about the trust you put into Eustar’s trading skills (in cutting losses if needed) and the term over which you see the investment.
Please note that this review was included here for information purposes only. Trading with ZuluTrade can be very risky. Never invest money you cannot afford to lose and always consult an independent financial advisor if you’re not sure whether this type of trading is right for you.