hihoforex Review ZuluTrade Trader August 2013
At the time of writing this review (August 9th 2013) hihoforex was just ranked number 1 in the ZuluRanking. They have been trading on ZuluTrade for 60 weeks (so more than 1 year) and have just over one million dollars following them. Based on hihoforex ‘s ZuluTrade profile and trade history, here’s our review of this Moroccan based trader:
- overall profitable
- over 1 year trading history on ZuluTrade
- trader does not trade with their own money
- strategy description doesn’t match actual strategy
- stop level and maximum number of open trades or maximum stop level unclear (hence total risk unclear)
- strategy looks Martingale (i.e. high risk)
- no communications
- poor risk reward ratio
Looking at hihoforex ‘s profit graph we notice an overall increase. However, this increase was achieved in 2 stages: June to September 2012 and February to August 2013. The results in the 4 month period in between were poor, though those 4 were the only losing months to date.
For the past 14 months hihoforex returned an average of about 940 pips per months on ZuluTrade, which certainly looks like a fairly healthy amount. However we should take into account this signal provider’s drawdown over this period too. For open trades this was 1,780 pips and overall account drawdown was 2,944.9. So against the drawdown hihoforex’s profits to date start to look a bit more average. They’re certainly better than many other ZuluTrade traders over a period of more than 1 year, though the historical maximum drawdown equals the average of 3 months profits.
So how were these results achieved? Well, hihoforex describes their strategy as trading mainly the EURUSD and GBPUSD pairs, using their own proprietary trading method, opening between 1 and 5 concurrent positions and targeting up to 100 to 300 pips per trade. So no info on stop losses and overall not very descriptive (which seems to be the case with plenty of ZuluTrade traders’ profiles).
Hence we have a look at hihoforex’s actual trades to get a clearer idea about their actual strategy. Looking at the pairs traded we notice that about 80% were in the EURUSD pair, about 5% in the GBPUSD pair and the rest spread across other pairs, including some in gold. Firstly though, the pairs traded don’t really match up with the strategy description. In addition, the 8 positions hihoforex opened in gold on February 1st accounted for 3,565 pips profit, which if you take this out of the equation (because many brokers don’t allow gold trades and many followers don’t copy them) their overall results would be more than 25% worse off. This would make the risk reward which looked average, look actual just below average.
When we look at the maximum number of trades which have been opened historically, we also notice that the number has been more than the maximum of 5 suggested by hihoforex’s ZuluTrade strategy description on 14 occasions, with the maximum being 20 concurrent trades. Even as recently as July 2013 it was 13 and currently there’re already 7 trades open. Hence again, the actual strategy nowhere near matches the description. In addition, when simultaneous trades are opened, they all seem to be opened in the same pair and direction, with new trades being added at regular intervals. I.e. this is pretty much a Martingale type of strategy (i.e. adding to losing positions in the hope the market turns), which for those people who read through our ZuluTrade tips is something we like to avoid.
From looking at the historical trades it does look like losses are taken on some trades. It’s still not clear though if actual hard stop levels are used, but the worst a single position of hihoforex has gone into negative was -256 pips. With regards to profit targets, the most profit on a single trade (non gold) was 109 pips, and this was the only one over 100 pips. So again, not really the targets set out in the strategy description. Hihoforex also doesn’t seem to provide many updates to clarify on the strategy and neither do they trade with their own money. On a more positive note, there’s actually one ZuluTrade followers who has almost made $10,000 following this strategy.
In summary, with the actual trading strategy nowhere near the strategy description in the hihoforex profile description, it’s very difficult to put any trust in this trader. There’s no indication what the future strategy will be and with a Martingale type of strategy and sometimes trading exotic pairs, there’s not knowing what the limit is (and by that we mean limit of potential losses). While the results so far have been positive overall this has come with a very risky approach and anyone who considers following a trader like this should take this into account (and consider their own ZuluGuard settings).
Please note that any ZuluTrade signal provider reviews are included on the Social Trading Guru website for educational purposes only. They do not constitute investment advice. Never invest money you cannot afford to lose since trading on leveraged Forex instruments can be very risky. Always consult an independent financial advisor if you’re not sure whether this type of investing and trading is for you.