f8 ZuluTrade Signal Provider Review Oct 2012
At the time of this review, October 22nd 2012, f8 has been trading on ZuluTrade for 138 weeks. At this time this Chinese based signal provider is ranked 3rd in the ZuluTrade ranking and has the 2nd largest amount of money invested in their system. Here’s our review based on the historical data (see f8 profile at ZuluTrade here):
- more than 2 years trading history
- many more profitable than losing months
- large amount of real ‘live’ followers
- high historical drawdown (which impacts risk/reward ratio)
- strategy description does not match actual strategy
- no regular communications
- only 3 star rating by followers
- large amount of other unsuccessful ZuluTrade accounts (most closed after losses)
- do not trade with their own money
With a history of over 2 years, f8 is one of the longest running signal providers in the top ranking of ZuluTrade. A return of over 32,000 pips with 26 winning months against 4 losing months is a very strong return over this period. They also have a large amount of live real money followers.
Their strategy opens up to 30 trades at the same time and the historical drawdown over this period is nearly 10,000 pips and hence very large. Some single positions have gone more than 1000 pips into the red and while this was in 2010, during 2012 the worst level a single position went into the red for f8 was still 440 pips. I.e. stop levels are not set closely and this is very much a long term system and signal provider.
The strategy description on f8’s ZuluTrade profile seems to suggest that “STOP LOSS at 50-150 pips” and “not more than 3 positions”. However, looking at the actual trading history, only last week over 7 AUDUSD SELL positions were opened at the same time with the worst one hitting -185 without being stopped out. Hence the actual strategy currently doesn’t reflect the one described. There’re also hardly any other communications from this signal provider which can shed more light on the actual strategy.
Trying to deduce the f8 strategy from the historical trades, they do seem to open up additional positions to add to losing positions. This means that if the market makes a small correction all positions can be closed out at break-even or a small profit. However, if the directional move persists for a long duration without making a correction, this can lead to very large drawdown, as has occurred in the past.
It’s also worth noting that this signal provider is listed at ZuluTrade under a large amount of different accounts as well, many of which have closed in losses (i.e. they have the bomb icon next to them).
There’s no arguing with the results of this signal provider on ZuluTrade to date have been positive, though when investing in f8 an investor will need to seriously consider the risk/reward ratio as well. I.e. what risk in terms of drawdown do you need to take in order to get the returns you’re expecting. The previous historical drawdown was 10,000 pips, though there’s never a guarantee that in the future the drawdown is not going to be higher, especially with 30 open trades and no clear/proven indication of the current stop levels.
Below is an indicative account setting calculation using our own ZuluTrade risk calculator tool. It does demonstrate that quite a large investment is needed in f8 to be able to cope with a potential drawdown of 10,000 pips or more.
Please note that this review and the calculations are included for informational purposes only. Historical results are not necessarily indicative of future results. Our review is not necessarily an endorsement of this ZuluTrade signal provider. Trading on ZuluTrade is risky and always consult an independent advisor is you’re not sure whether this investment vehicle is for you, and never invest money you cannot afford to lose.