For today’s review, written November 6th 2013, we take a look at One Trade Longterm, a trader on ZuluTrade for 26 weeks. While we normally prefer to look at more established traders, the trading style and results so far allow us to already have some opinion on this trader. They’ve also gained quite a bit of followers in the past few months, ranking 9th in popularity with just under $1.9 million following them. They’re ranked 31th on the ZuluRanking and based on One Trade Longterm’s ZuluTrade profile and history, here’s our review of this Austrian based trader:
One Trade Longterm Pros:
- overall profitable
- uses stop levels
- strategy fairly well described
One Trade Longterm Cons:
- do not trade with own money
- results flat-lined over past 2 months (not very consistent)
- stop levels set at arbitrary level
- does not take into account scheduled news releases
- trading frequency increased over the past month (strategy changed?)
- still less than 1 year trading history
- has a few other failed accounts
One Trade Longterm’s profit graph (see below) shows a gradual increase for the first 4 months (good), followed by a flat break-even performance over the past 2 months (not so good). Open account drawdown so far has been -106 pips, though with this strategy account drawdown is more important and this has been -346 pips. For total profits of 1,433 pips over 6 months this is relatively decent.
The strategy is described fairly clearly in their ZuluTrade profile. One Trade Longterm opens 1 trade at the time and this trade can be in any number of currencies, with EUR/USD and EUR/JPY being the most actively traded pairs so far.
The strategy description mentions a fixed stop loss of 90 pips and looking at the historical trades this indeed seems the approach taken so far. Hence their trader name of ” One Trade Longterm” seems well chosen since essentially they open 1 trade at the time and pretty much leave it open until it gets closed out at -90 pips or until they take profit. With regards to the -90 stop level, while it’s certainly recommendable that a stop level is used, professional traders normally don’t use a fixed number for stop levels. Professional traders use different levels depending on the volatility of the market and the currency pair they trade, and often set the level below or above some break or peak level on the chart.
With regards to the profit targets, they pretty much range from a few pips to +273 pips. Quite often they’ve been pretty healthy (>30 pips) though looking at the actual trades it’s interesting that in October the take profit levels have mostly been much smaller (often <10 pips). It’s also worth noting that in October the trade volume was quite a bit higher than in previous months. Obviously when smaller profits are taken, the 1 trade isn’t left open that long and more trades can be executed. While 1 month may just be an exception, it’s still clear that the approach has been slightly different than in other months. One Trade Longterm’s results on the other hand have also suffered since October was the worst month for them on ZuluTrade to date.
Without more information or clear status updates we can only guess as to the reason for this. However, based on years of experience on ZuluTrade and other social trading networks, I can certainly raise one possibility. Over the recent months One Trade Longterm’s popularity has been growing. Hence instead of just trading from their demo account to gain pips and improve their trading history, now, every time they trade they actually make money (commission) themselves. Whether they return 5 pips for a trade or 50 pips for a trade, they actually will make the same commission on ZuluTrade. Hence for this trader it’s actually better to record many small gains than a few large ones. We’re not saying this is necessarily the case for this trader but it’s certainly a behaviour we’ve seen with some other ZuluTrade traders once their follower numbers increased, especially those sending signals from demo accounts. These traders don’t necessarily plan to change their strategy, but the lure of some extra commissions can easily entice a trader to take some quick trades (and commissions) and hence abandon their normal strategy.
Another point worth nothing with regards to One Trade Longterm is that they’re also “known as” 5 other systems on ZuluTrade, 3 of which already bombed.
With traders who leave trades open until they reach certain fixed levels, such as One Trade Longterm with their -90 stop level, we always like to have a look as well at how they trade scheduled news events. As mentioned before in our reviews, these events can cause 50 to 100 pip swings and professional day-traders normally close their positions instead of taking a 50/50 gamble (especially since the odds may be different depending on the price level before the release in comparison to the stop level). In the case of this signal provider it’s fairly clear they don’t take into account scheduled news events since they leave their trades open. A good way to try and spot this is by looking at the times when the -90 stop levels were hit. If these are round minutes, i.e. 00 or 30, it normally means the trade was closed as a result of the news event. A recent example here was the trade closed at 12:30:01 (GMT time) on Oct 22nd 2013. This was the (delayed) monthly release of the US non-farm payroll numbers. The trade was actually closed at -100 at 1 second after the release because the trade even spiked through the stop level. I.e. during the spike your broker will give you the best price they can get but they cannot guarantee the stop level. There’s a good chance some of the followers may even had worst closing levels, depending on their broker. There’re some other examples too for One Trade Longterm in their historical trades which certainly make it seem they don’t take into account scheduled news releases.
In summary, while One Trade Longterm certainly had some excellent early results their performance has stagnated in recent months while they got more followers. It’ll be interesting to see over the next 3 to 6 months if they can regain their early form and prove that they weren’t just lucky at the start with this signal provider account. The fact that they don’t trade with their own money and have exhibited some trading behaviours not expected with professional traders certainly raises some doubt on whether they will.
Please note that any ZuluTrade reviews are included here for informational purposes only. They do not constitute investment advice. Trading on leveraged Forex instrument can be highly risky. Never invest money you cannot afford to lose.