HighProfitFactor Review ZuluTrade Trader July 2013
This review of ZuluTrade signal provider HighProfitFactor was written on July 26th when they were ranked 98th in the ZuluRanking and had $1,461,100 of real money following their signals. They’re a true ZuluTrade veteran with 152 weeks trading history. Based on HighProfitFactor’s profile and historical trades, here’s our review of this US based signal provider:
- long trading history
- follows own signals with live account
- overall profitable
- very high historical drawdown
- high risk strategy
- high risk reward ratio
- strategy description doesn’t fully match trading style
- no clear stop levels
When you look at HighProfitFactor’s profit graph, see below, you’ll notice a gradual increase for the first 2 years, followed by a steep decline, a steep increase, another steep decline and another steep increase. I.e. it’s not very smooth and there’re a few instances where significant drawdowns occurred. Based on closed trades only, 29 out of the 35 past months were profitable.
Average monthly return for HighProfitFactor have been about 580 pips. While this number looks very healthy you have to consider this in terms of the historical drawdown on ZuluTrade. In fact, the open trade drawdown was 4,820 pips while the account level drawdown was 5,867 pips. I.e. the maximum drawdown was higher than the expected returns for 10 months! Hence the risk reward ratio is very poor for this ZuluTrade SP.
HighProfitFactor describe their strategy as an EA running which trades the AUDNZD targeting 20 pip profits. SL can be 150 pips or more and other pairs may be traded too (in fact 75% are other pairs). A minimum of 5-6 trades are recommended to be opened, with a maximum of 10.
Looking at the actual historical trades it’s clear this strategy only relates to the past 6 months. Before this HighProfitFactor twice recovered from large drawdown by opening up to 23 positions until the markets reversed. In fact in those circumstances it’s highly unlikely followers would have the same results since they wouldn’t have let this ZuluTrade trader open as many positions in their account, and hence the follower results would have been worse.
You can also see from the column on the left in the profile screen that so far people haven’t made much money yet from following HighProfitFactor. In fact the most a single ZuluTrade customer has made from following HighProfitFactor has been $2,996. Considering this trader has been on ZuluTrade for 3 years and was regularly ranked high both in the ZuluRanking and in terms of money following, this is a very low number and proves that the majority of people have lost money with this trader so far.
Obviously a lot of this can be contributed to the fact that many ZuluTrade followers tend to risk too much on some traders, which in case of a trader like this is a recipe for disaster since high drawdowns are part of the strategy. While the stop level mentioned in HighProfitFactor’s strategy is 150 pips or more, the levels are actually “much more” and trades are hardly ever stopped out. They’re normally left to run until they reverse and the worst level at which a single trade was stopped out was 703 pips.
On a positive note though, HighProfitFactor does follow their own signals with a live ZuluTrade account which is very commendable. While this may give some comfort that this trader will apply some overall money management principles to safeguard their own money, it’s no prove whether they followed every single trade themselves in the previous periods of high drawdown when many more positions were opened. This because following with a live account is not the same as sending the actual signals from a live account.
In summary, HighProfitFactor is very much a long term trader and strategy. Anyone considering following a trader like this needs to seriously consider the risk/reward ratio and be ready to deal with long and high periods of drawdown. For most ZuluTrade followers, who have the tendency to over-leverage their accounts, following this provider can lead to margin calls in the periods of high drawdown.
Please note that any trader reviews included on this website are written for educational purposes only. These reviews don’t constitute investment advice. Please contact an independent financial advisor if you’re not sure whether investing with ZuluTrade is right for you. Never invest money on social trading networks which you cannot afford to lose.