We’ve been asked the question on whether ZuluTrade “is safe” a few times, so based on our knowledge and experience as a customer, I thought I’d write down my opinion on this.
ZuluTrade Inc. is incorporated and registered in Greece and fully compliant to all EU regulations for financial companies. Their CFTC, NFA Member ID is 0389149 and to our knowledge this is a totally legit business.
Is my money safe?
To answer this question you must first understand that ZuluTrade is “only” the social trading platform which connects traders (aka signal providers) with investors. As an investor, your actual money is kept in the broker account you use to connect to ZuluTrade. There’s a choice of over 50 brokers from all around the world, so how safe your money is will depend on the financial stability of the broker and the regulations of the country they’re registered in. E.g. UK residents are protected and their capital safe up-to £50,000 in case they invest with a UK regulated broker which goes out of business. Hence the liability here is not with ZuluTrade but with the broker.
However in the case of AAAfx, which is ZuluTrade’s own broker, the case is obviously slightly different. AAAfx was founded in 2009 and is registered in Greece and fully compliant to all EU regulations.
Moreover, AAAFx investors are protected by the Greek Guarantee Fund according to the European Directive 93/22/EEC. In the event of an Investment Firm’s bankruptcy or failure to fulfill its obligations from the provision of investment services, this Greek Guarantee Fund will act in order to reimburse the investors and/or any of the contracting parts. The maximum amount of compensation is €30,000 per investor (more information can be found here).
Is my investment safe?
The safety of your investment all depends on yourself, and in particular on which traders you decide copy and your risk management settings. If you invest $1000 with ZuluTrade and select to copy a trader with a history of drawdowns larger than 1000 pips, you pretty much will lose your full investment and hence your investment clearly isn’t safe.
However, ZuluTrade provides a wide range of tools to help you protect your investment. E.g. you can set the maximum you allow a trader to lose before you automatically stop copying them (e.g. $200 if you only want to lose a maximum of 20% of your investment from the previous example). Or you can set the maximum amount of positions you copy for each trader in your portfolio. In addition you may find our ZuluTrade tips on selecting traders and money management settings useful too.
I hope this clarifies the question on how safe your money and investments are with ZuluTrade. As always, trading leveraged Forex instruments is considered high risk, so never invest money you cannot afford to lose. No “safe” trading system has ever been made, so there’re no guarantees of future profits or lack of losses.
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.
HighProfitFactor ZuluTrade Performance until 26th July 2013
Ayondo are running a new promotion for UK and Ireland residents. Whether they’re totally new to Ayondo or just want to turn their demo account into on a live account. With a minimum investment of £100 or €100, they’ll will give you a £25 Amazon voucher* for opening a live ayondo account. This offer is valid until 31st August 2013. Click here for the full terms and conditions of this offer.
Ayondo is a leading platform for social trading which connects top certified traders with active private investors. The ayondo traders trade in liquid markets such as forex, precious metals, commodities and indexes. Investors can automatically copy the trades from up to 5 Top Traders in their accounts. For more info you can have a look at our ayondo review or visit the ayondo website.
* subject to T&Cs
This ZuluTrade trader review was written on July 22th when T.C.Y. was ranked 8th in the ZuluRanking and had just over $710,000 of real money following their signals. T.C.Y. has been trading for on ZuluTrade for 71 weeks and based on T.C.Y.’s ZuluTrade trade history, here’s our review of this Singapore based provider:
- fairly consistent returns so far
- low-ish historical drawdown (low risk strategy)
- automated system
- does not trade with own money
- low returns when compared to historical account drawdown
T.C.Y.’s profit graph, see below, shows an overall slow increase over time. Of the previous 16 months, 13 were profitable, while 3 ended in losses. Average monthly profits have been very modest, about 75 pips per month. However, this has been achieved against a maximum open trade drawdown of 59 pips, but a maximum account drawdown of 246 pips. So, while the returns on ZuluTrade are ok when compared to the open trade drawdown number, the maximum account drawdown is 3 times more than the average expected returns.
The strategy description for T.C.Y. mentions they trade the EURUSD pair only, using tight stops and a maximum of 2 open positions. From the updates it’s clear that this is an EA (i.e. trading robot) running which gets adjusted over time. The maximum stop level isn’t mentioned, though looking at the individual trades T.C.Y.’s stop levels range from 10 to 50 pips, though more often it’s in the lower range. Profit targets seem to be higher than the stop levels and looking at T.C.Y.’s historical trades seem to be 3 to 1 or 2 to 1. Best trade so far returned 163 pips.
The average trade duration of T.C.Y. is 4 hours, meaning this is pretty much a day trading system. It also means your overall risk is lower since trades are normally closed at the end of the day, and open positions aren’t carried over week-ends. The average return per trade for this ZuluTrade signal provider is 4 pips, which is very modest. In case you’d follow T.C.Y. with a live trading account, it’s worth checking the slippage you get since with low average returns it may significantly impact your returns.
In summary, T.C.Y. seems to use a fairly low risk strategy which so far has produced some consistent but fairly modest returns. While open trade drawdown is very small, T.C.Y.’s strategy will sustain losing trades and hence account drawdown is something to be considered and monitored closely. The low average return per trade also means slippage (depending on your broker) may significantly impact your returns too.
Please note that any ZuluTrade trader reviews are included here for educational purposes only. A review of a trader or signal provider isn’t an endorsement. Trading with leveraged Forex instruments can be high risk. Never invest money you cannot afford to lose, and always consult an independent financial advisor if you’re not sure whether investing on ZuluTrade is right for you.
TCY ZuluTrade performance until July 22nd 2013
Today, eToro announced that they’ve added more individual stocks and shares to their social trading investment platform. eToro was already the first social trading network to offer this capability to their customers. So far social trading networks mainly focus has been on Forex instruments with some offering trading on the main indices and commodities as well. eToro’s initial list of individual stocks was limited to hand handful of names, though now they’re increasing this to 60.
The list of stocks is pretty interesting too. eToro didn’t just pick the world’s largest companies in terms of market capitalisation, but went for popular brands which will be very recognisable to most retail investors. E.g. you’ll find today’s major technology and media companies like Google, Apple, Facebook, Microsoft, IBM and Walt-Disney as well as consumer brand names like Coca-Cola, PesiCo, McDonalds, NIKE, Wall-Mart and Procter&Gamble. Financial institutions are represented by the likes of HSBC, CitiGroup, Bank of America, Visa and Mastercard. You can also trade telecommunications (e.g. Vodafone and AT&T), car (e.g. Honda and Toyota), pharmaceutical (e.g. Merck and Pfizer) and oil companies (Exxon-Mobil), as well as one football/soccer team (Manchester United). Click here for the full list of eToro stocks.
eToro users can invest any amount they which in these stocks and leverage on the price movements (i.e. they don’t need to pay the price of the individual shares). This therefore opens up trading these popular brands to a larger community of smaller everyday retail traders to whom this was previously inaccessible.
We believe that this move will be beneficial to both the “traders” on eToro’s social trading network as well as for the “followers”. Until now social trading networks attracted mainly traders with experience in Forex. However, experienced stocks and shares traders can now also share their trades with other traders and make additional money when people decide to copy them on eToro. For the followers this will hopefully attract a host of new experienced traders they can copy and from whose wisdom they can benefit. Adding specialist shares traders may also help them diversify their “people-based” portfolio.
eToro is the world’s largest investment network, with almost 3 million registered users in over 200 countries. Their community powered network enables every investor to see, follow and automatically copy the trades of other investors in real time. Their aim is to make people’s trading experience more social, enjoyable, simple and transparent.
This review of OS.PA. Long Term ST (aka OSPA) was written on July 12th when this ZuluTrade signal provider was ranked 2279th and had just over $300,000 of money following their signals. OSPA had been trading for 31 weeks on ZuluTrade and based on OPSA’s ZuluTrade trade history, here’s our review of this Italian based provider:
OS.PA. Long Term ST Pros:
- send signals from a LIVE trading account
- fairly consistent returns so far
- low-ish historical drawdown
OS.PA. Long Term ST Cons:
- maximum stop level unclear (hence total risk unclear)
- pure automated system – no manual interventions
- system can get into trouble around major news releases
When we look at the profit graph for OPSA (see below) we notice an overall increase, though the increase is all but smooth. So far every month on ZuluTrade has been positive, though July has been poor so far. Average monthly returns are about 180 pips, which is not much, though this has been achieved against a relatively low account drawdown of 212 pips and open trade drawdown of 178 pips.
The strategy is described as a system based on price action with a maximum of 3 open trades. Maximum stop level is however unclear from OPSA’s description, though the strategy description mentions their system automatically applies stop levels. Looking at the actual trades in the ZuluTrade interface it’s clear stop levels are used and applied since many losing trades are closed out at their lowest level (i.e. stopped out). Levels seem to vary from 100 pips to 20 pips, though more often than not small stop levels are applied. The size actually seems to depend on the volatility of the market (EURUSD) at the time the trade was opened.
What’s clear though is that this is a pure automated system (EA) something which OSPA also mentions in their communications. The EA seems to look at the market every 15 minutes and make a decision whether to open a trade or not then, as those seem to be the time intervals trades have been opened in the past. Personally we’re never a massive fan of EAs unless the trader uses them as a guidance but still apply their own trading skills based on current market conditions or for example to intervene before, during or after major news events. From the communications and some recent individual trades we looked at it doesn’t look like OPSA intervenes with the EA, though they’ve suggested making some amendments to it as a result of a recent poor run.
OPSA also mentions they don’t intervene with the system during news events and expect the system will perform well over time independently of its behaviour during news releases. However, personally we feel that someone considering following this type of ZuluTrade provider (and someone with some basic trading skills) may outperform the automated system by looking at the position before major news releases (i.e. the ones where 50 or 100+ pip moves are expected). E.g. better results may be achieved in the long run by closing positions if a few points from profit target or by turning the system off for a few hours (if no positions are open) to let the markets settle so the system doesn’t react to the sudden spikes. As we mention in our ZuluTrade tips though, overall we prefer to follow traders where we don’t have to intervene since after all, that’s what social trading is about (and why you pay the small commissions to ZuluTrade and the traders you copy on each trade).
On a positive note OPSA do send the signals from a live account. Hence they risk their own money (very commendable) and so fully trust the system themselves. You’d therefore also expect them to track the performance on a daily basis. On the other hand, the number of followers and the amount of money people have made so far from the system is still very low.
In summary, while the results of OS.PA. Long Term ST so far have been fairly consistent for relatively small drawdown, it’s clear this is a pure automated trading robot. While it’s proved to be doing well in the market conditions of the past 6 months, an EA is only as good as the trader managing it. And while OPSA does trade the EA with their own live account, it doesn’t look like they intervene themselves (and hence may require close management by the follower).
Please note that any ZuluTrade trader reviews are included here for informational purposes only. A review doesn’t constitute investment advise and is neither an endorsement of the trader. Trading with ZuluTrade can be very risky. Always consult an independent financial advisor if not sure and never trade with money you cannot afford to lose.
OS.PA. Long Term ST ZuluTrade performance until July 12th 2013
This review was written on July 8th 2013 when Chaoeur was ranked 54th in the ZuluRanking and had just under $650,000 of money following their signals. They’d been trading for 32 weeks on ZuluTrade and based on Chaoeur’s trade history, here’s our review of this China based trader:
- send signals from a LIVE trading account
- consistent returns (only 1 small losing month out of 8)
- trades and specialises in 1 currency pair
- clear stop levels
- low historical drawdown
- good historical risk/reward ratio
- limited strategy description & no communications
- maximum number of open trades unclear
- not traded yet for many followers
The profit graph for Chaoeur (see image below) shows a fairly gradual increase, albeit with a 3 month plateau in the middle (March to May 2013). Of the 8 months trading on ZuluTrade, 7 ended in profit, and only 1 in a small loss. The average return is almost 400 pips per month, which is very healthy considering this has been achieved by Chaoeur for a maximum drawdown of 285 pips. I.e. the maximum drawdown is less than the average monthly returns, meaning good reward for the risk taken.
Chaoeur’s strategy description is unfortunately very limited (maybe to do with the fact that there’s a language barrier and they tried to use Google translate). There’re also no further communications, so we’ll have to look at the actual ZuluTrade trade history for Chaoeur to get a better idea of the trading strategy and principles. They only trade the EURUSD pair and apply a maximum stop level of 100 pips per position. When more trades are opened, they’re all opened in the same position. However Chaoeur doesn’t hold onto losing positions until they eventually turn positive (or hit their stop levels). On a few occasions Chaoeur closed their trades for small losses and opened trades in the opposite direction (obviously because they believed the market direction had changed). It therefore looks like they trade manually and adjust their positions based on the current market conditions.
Unfortunately there’s no mention in the strategy of the maximum number of open positions required to follow Chaoeur’s system (which isn’t very useful). So far a maximum of 8 positions were opened once and 6 on another occasion. So, risking 8 trades with stop levels of 100 pips would mean a total risk of 800 pips per trade cycle, which is not small and double the anticipated monthly returns. However the maximum drawdown so far was only 285 and from Chaoeur’s trading style so far, there’s no indication this ZuluTrade trader would let 8 trades run to their 100 pip stop level at the same time. I.e. so far they’ve managed the risk and drawdown appropriately, and as mentioned above, closed trades in small losses to avoid potential larger drawdowns or losses.
Chaoeur also sends their signals from a live trading account, meaning they trade with their own money. Hence you’d expect that this would also ensure they keep to their existing strategy and money management principles, and don’t increase risk/drawdown unnecessarily.
In summary, until now, this trader has generated some healthy returns for a relatively small drawdown. The fact that Chaoeur trades with a live account is very positive and should hopefully mean this ZuluTrade provider maintains their current risk management approach. However there’re never guarantees and so far this trader hasn’t traded for many followers yet (which has made some popular traders on ZuluTrade change their strategies and trading behaviours in the past).
Please not that this review was included here for educational purposes only. Investing on social trading networks can be very risky. Never invest money you cannot afford to lose. Always consult an independent financial advisor if you’re not sure whether this type of trading is right for you.
Chaoeur ZuluTrade performance until July 8th 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.
Eustar performance on ZuluTrade until July 5th 2013
At the time of writing (June 21st 2013) this review, which was also suggested by one of our visitors, BREYYY had been trading on ZuluTrade for 90 weeks (so fairly seasoned). They’re ranked 104th and have just over $540,000 following them. Based on BREYYY’s ZuluTrade profile and trade history, here’s our review of this Bulgarian based trader:
- fairly consistent returns (19 out of 21 months profitable)
- apply clear stop levels and close trades in loss if deemed necessary
- trading on ZuluTrade for almost 2 years
- did not panic/overtrade after a run of losing trades
- do not trade with their own money
- maximum number of open trades or maximum stop level unclear (hence total risk unclear)
- no communications
When you look at BREYYY’s pips profit for the past 90 weeks (see below), you’ll notice a nice steady increase for the first 9 months, followed by a dip, but a nice steady recovery after that. When looking at the performance per month, 19 were profitable so far, with only 2 losers. However, July 2012, with -585 pips was a significant loser, seeing as the average monthly returns are only slightly over 150 pips. While the gains for the 2 months after these losses were fairly small, looking at the trade volume will tell you that BREYYY actually hardly traded those 2 months.
Looking at the actual trades which caused these relatively significant losses in July 2012, it’s interesting to notice they were caused by 3 separate trade cycles of respectively 2, 3 and 3 concurrent positions. I.e. those losses weren’t caused by opening lots of positions in the same direction. They were just caused by trades being stopped out at still respective stop levels of between 90 and 130 pips. So what does this tell us about BREYYY’s trading style and strategy. Firstly that they apply stop levels and will close trades in a small-ish loss before creating large drawdowns and potential exponential losses. Secondly, when they had 3 losing trade cycles in a row, they didn’t panic and start opening lots of extra positions or over-trade to try and quickly recover. If we ignore the 2 subsequent months when BREYYY didn’t trade then they gradually recovered over a 3 month period. This looks like a sound and positive trading approach in the sense that this ZuluTrade signal provider stuck to their principles and continued with the same strategy they were using before.
The maximum drawdown for BREYYY so far was 615 pips on open trades and 761 pips at account level. That’s about 20% of the profit generated to date (which is fairly healthy) but at the time it occurred was more like 40% of the profit generated at that time on ZuluTrade.
BREYYY describes their strategy as “using mostly chart geometry with underlying market psychology and fundamental analysis”. The fact that they mention the words fundamental analysis in the description makes us believe that they don’t just purely use an EA (trading robot) as suggested by the ZuluTrade EA icon in their profile. BREYYY’s trades also seem to be entered within similar time-frames which also supports the view that they trade manually and not just automated.
The strategy description is however lacking any information on the maximum number of trades required to follow BREYYY or the maximum stop level they apply. So far the maximum trades opened at the same time was 14 in April 2012. While these were in 5 different pairs, they were all in the same direction and the worst trade went to -59 before the market reversed. There were also 9, 11 and 13 open trades at the beginning though for the rest the maximum seems to be 6 with 7 only occurring once this year. Mostly 2 or 3 concurrent trades are opened by BREYYY per trade cycle. The worst a single trade was drawdown before reversing was -170 and the worst level a trade was stopped out at by this ZuluTrade signal provider was at -169 pips.
The reason for mentioning all these numbers is that without being given any indication of maximum open positions and maximum stop loss, in case someone wants to follow this ZuluTrade trader, they need to make some assumptions if they want to protect their account. For example, you might assume a maximum stop level of 200 and allow 14 open trades (since this was the maximum so far). While this sounds fairly reasonable as approach based on the historical figures, it would mean a risk of 14×200, or 2,800 pips if all trades were opened and stops were hit. I.e. that risk would be very high for the expected returns. Allowing 6 or 7 open trades would reduce that risk but not clear if that matches BREYYY’s strategy (even though not more than 7 were open in 2013).
In summary, so far BREYYY has made some fairly consistent returns for a relatively well managed drawdown. They proved that after a losing run they didn’t panic and were gradually able to recover. However, their lack of indication on stop levels or maximum open trades means followers would need to put a lot of trust in this ZuluTrade signal provider since the losses if they abandon their current approach would be very large compared to the anticipated returns. The fact that they don’t trade with their own money, don’t communicate and haven’t traded for many followers yet (which has led quite a few traders to change their behaviours on ZuluTrade) means attaining that critical trust level is much more difficult.
Please note that any ZuluTrade trader reviews are included on the Social Trading Guru website for educational purposes only. The inclusion of a signal provider is not necessarily an endorsement of this provider. Trading on ZuluTrade and with leveraged Forex instruments can be very risky. Never invest money you cannot afford to lose. Always contact an independent investment advisor if you’re not sure whether these types of investments are right for you.
BREYYY ZuluTrade performance graph up to June 21st 2013
A review of SteadyCapture (v) was kindly requested by one of our visitors. At the time of writing this review (June 18th 2013), this trader had been trading for 60 weeks on ZuluTrade. They’re ranked 48th and had just over $1.1 million of real money following them. Based on the historical ZuluTrade trade history of SteadyCapture (v), here’s our review of this Canadian based signal provider:
SteadyCapture (v) Pros:
- very consistent returns (13 out of past 14 months profitable)
- follow their own signals with a demo account
- seem to trade manually and have applied solid money management approach so far
- over 1 year trading history
SteadyCapture (v) Cons:
- not clear what stop levels are applied – total risk unknown
- historical risk reward not great
The overall profit graph (see image below) shows a fairly “steady” increase for SteadyCapture (v) with two large-ish drawdown periods. Of the past 14 months on ZuluTrade, 13 were profitable with an average return of about 135 pips per month (i.e. consistent monthly returns). These results were achieved for an open trades drawdown of 542 and an account drawdown of 620. So while the drawdown figures are not that high, in the context of the average returns, they actually are a bit high since they’re more than 4 times the expected monthly returns. This is important to consider when evaluating risk reward for this trader.
SteadyCapture (v) describe their strategy as trading a variety of currency pairs using high probability trading systems (though which ones isn’t mentioned). This ZuluTrade trader mentions their experience as a professional trader, their money management skills and the fact that the main aim is to deliver consistent returns over time while trying to keep drawdowns shallow and short. Looking at the actual trade history, it’s clear SteadyCapture (v) trades about every single pair available including the Mexican Pesos on one occasion. The maximum open positions recommended in the strategy is 7 and this occurred one time so far. Nevertheless, regularly 3, 5 or 6 positions are opened at the same time. While they’re normally not all in the same currency pair, they’re normally in the same direction. So with 6 open positions, a sharp move in the market can mean a significant drawdown or loss.
With regards to stop losses, there’re no fixed levels mentioned in SteadyCapture (v)’s strategy and the trading history also doesn’t give much insight into this. The worst level a single trade went into drawdown was -345 pips (before rebounding into profit). In fact, we could hardly find any trades which were closed at their lowest level (which would indicate they were stopped out). It certainly looks like this ZuluTrade trader watches the market and when they mention “keeping drawdowns shallow and short” they achieved this by monitoring the combined trades and the market real-time. We notice some ‘trade cycles’ were actually closed in a loss, i.e. this ZuluTrade signal provider doesn’t leave trades open indefinitely until they get back into profit. This also seems to indicate that SteadyCapture (v) applies money management principles since in the past they protected their account from higher potential drawdowns and losses by booking some smaller losses.
While so far this strategy has proven to be fairly consistent, for a follower you need to have a high level of trust in SteadyCapture (v) because their full money management approach seems to be based on them watching and trading the markets live. I.e. there’re no prescribed stop levels at trade or account level, and so far, during the times when the highest drawdown levels occurred the markets turned in the favour of this trader (i.e. trades were not stopped out). Hence it’s unclear how far SteadyCapture (v) will let the drawdown go before closing all trades. This makes it difficult for a follower to protect their ZuluTrade account. With a lowest previous single trade drawdown of -345 pips, do you add a maximum stop loss per trade of -400, though with a maximum open trades to 7 that would mean risking 2,800 on a single trade cycle if this ZuluTrade trader blows all stops. Or, do you protect your account with ZuluGuard for a maximum capital loss, and if so, at what level. Some indication on this in the strategy would be helpful.
The fact that SteadyCapture (v) follow their own signals with a demo account is however a positive sign (and may built some level of trust). They also communicate with their followers (e.g. currently they’re mentioning one of the open trades in drawdown should be considered a long term trade). SteadyCapture (v) is also known as 3 other signal providers on ZuluTrade: Strict Income, SteadyCapture and Shortbread. All are in profit though some not actively traded anymore.
In summary, while the results of SteadyCapture (v) have been fairly consistent so far and they seem to have applied a solid money management approach to date, the risk reward for this ZuluTrade trader needs to be seriously considered. Without knowing how much you risk per trade cycle, a lot of trust is being placed on this trader’s real-time trading skills to keep the drawdowns and potential losses under control. In addition, so far they’ve stayed out of the ZuluTrade limelight, having traded for a still fairly limited number of followers. As we all know, there have been plenty of examples on ZuluTrade of trader’s who faltered and abandoned their money management principles once they got to the top regions of the ZuluRankigs.
Please note that this ZuluTrade trader review is included here for educational purposes only and does not constitute investment advice. The inclusion of a trader isn’t necessarily an endorsement of that trader. Trading leveraged Forex instrument on ZuluTrade can be highly risky. Never invest money you cannot afford to lose and always contact an independent financial adivsor if you’re unsure whether this type of investing is right for you.
SteadyCapture (v) pips profit ZuluTrade performance graph up to June 16th 2013
We’ve seen quite of few people asking or questioning whether eToro is a scam. With over 2 years first-hand experience investing and trading with eToro with a live account I thought it might be useful to share my opinion on this subject. For the purpose of this article, let’s assume we use the official dictionary definition for “scam” which is “A fraudulent business scheme; a swindle”.
*All trading involves risk. Only risk capital you’re prepared to lose. Past performance does not guarantee future results.This post is for educational purposes and should not be considered as investment advice
eToro is a highly regarded brokerage that has revolutionised how retail clients trade the financial markets. The simple yet innovative approach eToro has taken involves attracting both experienced and beginners to their platform. Experienced investors can be paid to allow beginners to follow their trades and beginners can follow professionals to generate impressive returns, it’s a win-win.
Firstly, as a business how reliable is eToro?
We don’t consider ourselves business analysts, so all we can write here is based on information we’ve found which is publically available. eToro was founded in 2007 and is fully regulated by the Cyprus Securities Exchange Commission (CySEC), which is where they’re based. They’re also fully compliant with EU MiFiD regulations and their American version of their site compliant with US finacial services regulations. I do not know what the impact was of the Cyprus crisis on the company though at no stage did I receive any indication that my investment was impacted (e.g. in case I wouldn’t be allowed to take my funds out).
Is eToro a scam from point of view of investor?
The purpose here is to ascertain whether eToro presents their data or service in such a way as to purposely deceive or scam investors. A key point are the performance metrics and the information of how much the traders you can copy have made in the past, since this is the main information investors will use to make decisions (even though as with any investment, past results don’t necessarily guarantee future earnings … yep, you know the tag line). As per our detailed eToro review, we do not feel the data eToro provide is very transparent. I.e. you cannot download or view the full trading history of the traders you may want to copy and the performance statistics only go back for 1 year. Their performance metrics (gains %) are also based on the Modified Dietz formula and because of the lack of data you cannot replicate the calculation of these numbers. Hence this makes us a bit suspicious and difficult to trust those numbers.
Our experience of using an eToro demo account
However, and here’s what I believe is the interesting part, from a test on eToro practice accounts for 1 year, we’ve found no evidence that the numbers are actually inflated compared to the actual results you would get yourself (even on the contrary). We started 2 demo accounts on May 1st 2012 and June 1st 2012 in which we allocated a $1,000 of the $10,000 available to us in the 10 most followed gurus/traders at the time. At the end of each month we took a screenprint of the account status. We did the same after 1 year and then compared the actual performance of the allocated $1,000 (including open positions) with the gain % reported in the eToro interface. To my surprise, from the traders for which a comparison was possible (some left eToro in that year) over both accounts, a total of 8 results were better in our account. You can see the full eToro performance comparison here, and we’ve included the screenprint for May 2013 below. It’s worth noting that one reason why the numbers are sometimes impacted is that traders may add money to their balance during the period (often via bonuses they receive from eToro see below). This makes it more difficult to compare ‘like-for-like’, though at least it was sobering to notice the numbers weren’t necessarily inflated and on this basis difficult to call them a scam or swindle.
Please also note that the results you get in a demo account with eToro are the same you’d get with a real money account (mainly because they’re the broker for everyone so trade prices are pretty much the same). We’ve checked this with some separate tests as well. And on the subject of demo accounts, it also speaks in eToro’s favour of not being a scam in our view that a demo account is offered and you can try and keep that demo account open indefinitely (i.e. you can try before you buy).
*All trading involves risk. Only risk capital you’re prepared to lose. Past performance does not guarantee future results.This post is for educational purposes and should not be considered as investment advice
Yes, there’re and have been quite a few traders or gurus on there who blew their accounts, and hence follower’s allocations by taking high risks (and yes, it happened to us too). However it’s up to the investor to try and evaluate how risky a trader is and decide whether to invest in them based on that. It kind of would be the same as calling the stock exchange a scam for listing companies who’s share price plummets or who go out of business. It happens and no-one can predict for certain a trader’s future behaviour (even big investment banks cannot – e.g. Nick Leeson or Jerome Kerviel) in the same way as no-one can predict a company’s future results.
eToro marketing and transparency
On the point of the marketing materials and tactics eToro employs, one can perhaps have a better argument that this the approach is slightly scam-y. They do make it sound as easy as ‘select a few traders, sit back & relax and watch your money grow’. But again in, eToro’s defence, they allow people to try with a practise account first and only allow people to allocate 20% maximum in 1 trader (to avoid people losing all their money in 1 rogue bad trader). And yes, their editors are effective at keeping the eToro forums and trader comment feeds clean from any remarks which are too inflammatory or too negative. But probably most businesses do this I guess (hence why people can vent their feedback on other sites like this one). eToro also tries to entice people to invest more by regularly offering bonuses for depositing more money. However in order to withdraw these bonuses a minimum number of trades are required in your account. But if this is considered the scam then all brokers are scams (hmm, maybe food for another article) but seriously, that’s the way all deposit bonuses work in this industry. They’re not just gonna hand you the money and let you close your account the next day.
In the past we must admit that the way in which eToro presented their rankings surely might (and should?) have been considered a bit scam-ish. They actually ranked traders based on the number of profitable trades, meaning traders with a 100% profit success rate were always top. As any seasoned trader or investor however knows, this only happens if you leave your trades open indefinitely (until they get into profit), but in the long run some trades will however deplete your margin and you’ll be stopped out. This practise did stop though and currently traders are ranked by gain%.
Is eToro a scam from the point of view of a ‘guru’ trader?
If you consider yourself to be a good trader, you can make some extra money from your trading skills by becoming one of eToro’s ‘best traders’ (previously called gurus). For every investor who copies you with at least $100 from their live account you get $10 bonus at the end of each month. But … here comes the part which might look a bit like a scam. You actually cannot straight away withdraw all these bonuses (only a small part) and to ‘unlock’ the rest you have to trade more. While overall we don’t like this commission structure for traders and think it’s probably one of the worst in the social trading industry (it makes it feel like a computer game with paper money) we kind-off understand the reasoning for locking in the bonuses. If a trader follows you with only $100, it’ll be fairly hard for eToro to make $10 commission on spreads in 1 month on the trades executed on that $100, particularly since the trades are executed proportionally on that allocation. Hence they’d pretty much run out of business straight away if they’d be handing out the money like that. In addition if a trader actually invests more real money themselves it’ll be quicker for them to unlock the bonuses too (since eToro makes more on the spreads).
So yes, the model is not ideal, and as a guru trader you might think it looks like a bit scam-y that all your bonuses cannot be unlocked straight away. The fact that you can start trading and attract followers with only investing $100 of your own real money and earn $10 per month even if they invest only $100 in you means you should make the expectations a little more realistic. Other models are available though on other social trading networks if you want to compare (see our ‘Be The Trader’ section).
The Bottom Line: Is eToro A Scam?
So in summary, I don’t believe or see eToro as a scam. We’ve found no evidence that they purposely deceive investors by deflating numbers to show unrealistic profit targets. Yes, there have been and I’m sure there will be some poor traders who lost a lot of their capital after early promise, though that’s the risk you take when investing. Because some of the potential gains which can be achieved with margin trading can be high, the risks are high too (and that’s explained in the risk disclosure of any broker and eToro as well). Of course, they want to get as many people trading as possible, but so does any broker, that’s their business model. It’s up to the investor to decide how much to invest and what risk to take (yes, not always easy, but perhaps our eToro tips will help).
eToro Performance Comparison 1st May 2012 to 31st April 2013
*All trading involves risk. Only risk capital you’re prepared to lose. Past performance does not guarantee future results.This post is for educational purposes and should not be considered as investment advice
At the time of this review (June 3rd 2013), Poisonfx had been trading on ZuluTrade for over 100 weeks, making them pretty much a Zulu Veteran. They’re ranked 18th and had just over $320,000 of real money following their signals. Based on Poisonfx’s historical ZuluTrade trade history, here’s our review of this Pakistan based signal provider:
- follow their own signals with a live account
- profitable overall and on profitable run past 3 months
- long trading history
- high historical drawdown and high anticipated future drawdown
- strategy description doesn’t fully match trading style
- stop levels not identified (pretty much unlimited)
- max open positions unclear
- high risk/reward
If you look at Poisonfx’s overall profit graph (see below) you’ll notice an overall increase over the past 2 years, though most of the profits have been achieved in a number of bursts. However, a lot of the gains were achieved over the past 3 months, which is why it’s interesting to review this signal provider now. Because most of the pip gains pre December 2011 were achieved trading gold, and Poisonfx mentions they changed their strategy after 1st December 2011 we should kind-off ignore that initial period for our analysis.
Hence if we just look at the past year, Poisonfx has made a profit of just over 17,000 pips, for a maximum drawdown of almost 4,000 pips. Since during that period only 2 trades were in gold for small profits these results weren’t therefore impacted by the larger gold pip movements. While 17,000 pips is obviously a very good return, a drawdown of 23% is certainly on the high side as well, and hence a serious concern in terms of risk/reward.
Poisonfx describe their strategy as trading multiple pairs looking a 15 and 30 minute graphs. They mention a maximum of 2 positions per pair will be opened and a maximum of 5 in total, though looking at their trade history this is clearly not the case. Historically up to 29 concurrent positions have been opened and even over the past year a maximum of 24. While not all positions were in the same pair, they were in the same direction. Poisonfx’s winning percentage is also over 85% which means most trades are left open until they turn into profit. There’re no clear stop levels with some trades running over 500 pips into negative before rebounding, some being closed around the -500 pip level and some closed over -600 in loss. All this obviously means Poisonfx’s ZuluTrade strategy can lead to high drawdowns, which has clearly already occurred in the past
While just over 25% of trades were in the major EUR/USD and GBP/USD pairs, Poisonfx has traded about every single available pair in the past. Hence they clearly don’t specialise in trading short term on a specific pair and with positions open on average 1 day, it’s certainly a medium to longer term strategy which is applied. This trader does however seem to follow their own signal from a live ZuluTrade account, which is a positive factor.
In summary, while the overall profits and specifically the profits for the past 3 months have been good, with no clear stop levels and multiple open positions this is clearly a high risk and long term strategy. Poisonfx mentions that followers might want to try following them from a demo account first and that’s certainly sound advice as most ZuluTrade followers wouldn’t be confident carrying the large drawdown levels which are inevitable with this strategy.
Please note that our ZuluTrade trader reviews are included here for educational purposes only. The inclusion of a signal provider should not be considered as an endorsement of this provider. Trading on ZuluTrade and Forex can be high risk. Always consult an independent financial advisor if you’re not sure whether this type of investing is right for you. Never invest money you cannot afford to lose.
Poisonfx ZuluTrade Profit Graph up to June 3rd 2013
Already one of Europe’s fasted growing social trading networks, Ayondo now became the first network to offer UK and Irish customers the ability to copy their Top Traders via a spread betting trading account. In fact they can follow up to 5 Top Traders at once, and the trades of the traders they follow will be copied real-time and proportionally in their Ayondo Markets spread betting account. Top Traders on Ayondo can trade in multiple instruments, including forex, indices and commodities, as well as an increasing selection of single stocks. They go through a number of career levels with Ayondo, which are not only based on their overall performance, but also on their risk management approach.
Any interested investors can try the Ayondo platform for free with a fully functioning demo account. Live Ayondo accounts can be opened from 100 GBP or 100 Euros, which means you can start copying their successful traders with very little initial investment. Live accounts are opened with their own broker, Ayondo Markets.
UK and Irish Spread Betting account launch bonus:
With the launch of the Ayondo spread betting account, Ayondo are offering the first 500 customers from the UK and Ireland who open a live account before 1st July 2013 a bonus of 100 GBP or Euro (depending on the base currency of their account). Please note that some T&Cs apply to the offer, such as a minimum number of trades to be completed (full details can be found on the Ayondo website).
Cartesian was brought to our attention this week by one of our visitors. While 26 weeks history on ZuluTrade is still pretty and they’re not in the top 100 ranking yet, at the time of writing this review (31st May 2013) they did have just over $350,000 following them. Hence it might be a good time to have a closer look at them and based on Cartesian’s historical ZuluTrade trade history to date, here’s our review of this Latvian signal provider:
- profitable every month to date
- smooth profit graph
- specialises in 1 instrument
- reasonable low historical drawdown
- strategy not clearly explained
- no communications
- stop levels unknown and hence potential future drawdown unknown (and high)
- still limited history and not been trading with many followers (i.e. commissions)
- known as 4 other systems (while profitable unknown why)
- unclear if automated or manual trading style (though looks automated)
- do not trade with their own money
When looking at the profit graph for Cartesian (see image below) you’ll notice a very gradual increase, which is normally a good sign. Profit per month has also been pretty consistent, averaging almost 200 pips per month without any losing months to date. The open trade drawdown to achieve those results so far has been 305 pips, which is reasonable, though still 50% more than the average monthly profits (so not perfect in terms of risk reward).
Cartesian describes their strategy as looking for “high probability Price Action” set ups on 1 hour charts, using existing techniques which they perfected. However, this is unfortunately the only information provided, and there’s no information on stop levels used or the maximum open trades the system uses. There’re also no other communications on their ZuluTrade profile over the past 26 weeks.
Hence we look at Cartesian’s actual ZuluTrade trading history to give us more clues on that. So far the maximum number of open trades was 4, though this was really at the beginning and since then it’s been maximum 2. So perhaps we can assume 2 is the maximum. It’s also clear they only trade 1 pair, GBP/CAD. With regards to stop levels it’s actually more difficult to identify what level Cartesian uses. If we look at the time of the maximum drawdown, one of the 2 open sell trades reached -250 pips, while the other reached -55 pips. At that stage the market turned and eventually this trade cycle was closed with one trade loosing -124.8 pips and the other gaining 70 pips. So while this makes it clear that Cartesian is ok to close some trade cycles in loss (i.e. they don’t leave trades open until they eventually get back to break-even or profit), it’s not clear what stop levels they use. Clearly 250 was not a stop level, since the trade wasn’t closed out. In fact we cannot see any trade which hit a level at which they got stopped out, since none were closed at their worst level.
This is a bit worrying since, even if we assume maximum 2 open trades, with no clear stop levels, the future drawdown is totally unknown. And with average returns of 200 pips per month, it’s difficult to justify large drawdown levels.
Cartesian also doesn’t make clear in their strategy description whether they trade manually or use an automated trading robot. However, the fact that the EA symbol is displayed in their ZuluTrade profile and that the entry times of the trades are spread across 24 hours, means we can pretty much assume they’re using an automated system.
Because Cartesian doesn’t have many live followers yet, there’s no slippage info available yet. Because they trade the GBP/CAD pair it’s however important you check the slippage if you would follow a trader like this on your live account. This is because the GBP/CAD pair is considered a more exotic Forex currency pair and the spread can range from 3 to 15 pips (yes really!) depending on which broker you use.
Another interesting thing we noticed is that Cartesian is also known as 4 other systems on ZuluTrade: Gordian, Tellus, Zennon and Cyrillus. We had a brief look at them too and all of them trade the GBP/CAD pair, have been running similar number of weeks and have generated almost the same profit. However not all had the same positions open at the time of writing. We don’t see much difference between them and don’t know why 5 similar systems are managed, though it justifies the point that it looks like these are automated trading robots.
In summary, Cartesian has shown some early promise with some very consistent results for a reasonably low drawdown. However, the lack of stop levels, lack of communication and the fact this looks like an automated system, makes it still a fairly risky signal provider to follow (especially in terms of risk reward), even with a maximum of 2 open trades. Also, as we mentioned many times before, 26 weeks is still very short period to evaluate a trader or system, especially since they also haven’t been trading with many followers on ZuluTrade yet.
Please note that this ZuluTrade signal provider review is included here for information purposes only. Our reviews should not be considered as investment advice and inclusion of a trader should not be considered as an endorsement. Trading Forex is very risky. Always consult an independent financial advisor if you’re not sure whether this type of trading is right for you.
Cartesian ZuluTrade Performance Graph up to May 31st 2013
Currensee have just released some new functionality on their platform to allow customers to manage open positions through their interface. When customers click on the ‘Investment Dashboard’ tab they’ll see a new section called ‘Open Positions’ (see image below). In that section you’ll see all your current open trades grouped by currency pair. You click on the currency pair to expand the selection and display every single positions. You’ll also see which of your chosen Trade Leaders has each position open. And more importantly, you can now close every individual position from this page as well, or close all positions for a given currency pair. I.e. you can close trades early to book wins, or avoid further losses. Obviously in an ideal world you wouldn’t need this functionality if the Trade Leaders would apply appropriate money management principles, though in our experience with Currensee (and other networks) it can be a pretty necessarily piece of functionality to have, as there’s no guarantee traders will keep to their principles when the markets turn against them.
Currensee Open Positions Screen Example
We mentioned in our Currensee review before that this functionality was a major omission from the Currensee platform and Trade Leader Investment Program interface. In fact, the only way you could view or close individual open positions before was directly via the interface from your broker account. However, if you followed more than one Trade Leader it would be impossible to know which positions belonged to which trader. I.e. you could only stop following a Trade Leader completely, which would close all their positions, but you could not close individual ones. We actually wrote in our review that “… in our experience because the trading behaviour of some of their Trade Leaders … it would be useful if the tools were available to monitor and close current open positions”, and it clearly demonstrates Currensee have improved their platform.
While Kama-spot managed to get to the number 1 position in both the ZuluTrade ranking and in terms of popularity within its first 4 months, we held off on writing a full review because we clearly felt not enough data was available yet. They now have a history of 32 weeks, and while this is still fairly short, their recent trading history has provided some additional insight to make a full review worthwhile. At the time of this review (May 21st 2013) Kama-spot was still 7th in terms of money following them (over $4,400,000) though only 2019th in the ZuluRaking. Based on Kama-spot’s ZuluTrade history to date, here’s our review:
- overall profitable
- reasonable communicator
- strategy not clearly explained (i.e. stop levels incorrect in description)
- stop levels set at arbitrarily levels (i.e. not based on the market conditions)
- increased maximum number of open trades over time (adding to losing positions)
- used end-of-month adjustments (to safeguard commissions for next month)
- relative high historical drawdown and with additional open orders potential for higher drawdown
- performance and strategy significantly impacted after first losing streak (disregarding original principles)
- do not trade with their own money
Kama-sport describe their strategy as technical analysis, using an automated advisor to tell them the direction of the trade, entry points and duration. But they mention they personally adjust the system and trades based on fundamentals and market conditions . While they mention in their strategy description that they use a 35-55 stop level, it’s been clear from their further updates and trading history that the actual stop levels are set at 250 pips (though some trades are closed before those levels). While use stop levels is key to a long term successful strategy we often argue that professional traders normally put their stop levels dependent on the market conditions (e.g. above or below resistance levels) and don’t use some arbitrarily number.
For the first five months Kama-spot’s results were pretty exceptional though (see graph below), with returns of almost 1000 pips per month for relative low drawdown. Within 3 months they were among the most followed ZuluTrade signal providers and in 4 months Kama-spot managed to get to the top of the ZuluRanking as well.
Their strategy of trading the major EURUSD and GBPUSD pairs with a maximum of 5 open positions and targeting on most occasions between 10 -25 pips per trade (though sometimes > 50 pips per position) proved very effective. Hardly any trades until then were closed in a loss and the stop loss level of 250 was never hit.
As we keep mentioning though, no system or trading strategy is successful all the time (just not possible) and any system will at some stage incur some losses. It’s whenever this happens that you can learn a lot about a trader in the sense of how they recover from the poor trading run. In the case of Kama-spot the poor run started in the beginning of April when SELL positions were taken on the GBPUSD and EURUSD pairs, though the pairs moved in the opposite position. At that time, with 250 stop levels and 5 open trades, the maximum losses you would normally expect from this ‘trade cycle’ would be 1250 pips, which is slightly higher than the average monthly returns up to then, so overall still not that bad (i.e. if you’d followed Kama-spot for 2 months you’d still be in profit).
However looking at the actual ZuluTrade trade history for Kama-spot, you see that once some of these trades were closed at 250 stop level, Kama-spot almost immediately opened a new trade in the same position. It’s very questionable whether it was their ‘system advisor’ telling them to open these positions or whether at that stage the trader took over and thought that since already so much was lost, the market would turn so they tried to make the losses back as quickly as possible, ignoring their usual strategy. Clearly this approach proved to be wrong since all of these additional trades resulted in further losses (some hitting the 250 stop level again).
Another example of where Kama-spot clearly stop following their approach is at the end of April. Having already incurred significant losses for the month, they decided to close all their open losing positions on the last day of the month. We assume the reasoning behind this was that because they were not getting their commissions anyway for that month, by closing those positions they could at least start the next month with a clean slate (we already mentioned in our ZuluTrade signal provider selection tips for over a year to be wary of this kind of trading behaviour).
Even further proof that Kama-spot seems to be disregarding their original strategy and principles is occurring in May, where they’ve increased their maximum number of open positions to 11. Because these extra positions are added to already losing positions (in the hope the market turns) this obviously means almost doubling the potential drawdown and losses.
As we keep on mentioning in these reviews, successful traders are not only identified by how they perform when the market goes well for them, but even more so when they have a bad run and they need to recover from that. The strategy/system Kama-spot was using was obviously performing very well for them for 5 months and hence they didn’t need to react and it was easy to keep to their principles. The key test came the first time some trades hit their 250 stop level and Kama-spot started to disregard their original approach. We’re not saying they did this on purpose as it’s often a natural human reaction to try and recover as quickly as possible from some losses, normally by keeping on adding more and more to the losing positions in the vein hope the market will turn quickly. Obviously the fact that Kama-spot had a massive ZuluTrade community commenting on every trade (even if some losses were to be expected) surely didn’t make this easier.
However this is where professional traders distinguish themselves from amateur traders. We also wonder if the same approach would have been used if they had been trading with their own money as well.
Having said all of this, there’re still many followers out there who made good money from Kama-spot (as displayed on their profile). Most got out as well without taking the recent losses and anyone who had been following Kama-spot for a few months before they started disregarding their principles would still have gotten out with a profit. As we mentioned before, with any new traders on ZuluTrade it’s important to monitor their trading behaviour closely. So, when would have been the best time to get out? In our opinion this would have been once the first trade hit the 250 stop level and another one was opened directly afterwards in the same direction. Reason for this is that at that stage they clearly broke their principles (a stop isn’t a stop if another trade is opened when the stop level is hot).
So in summary, while Kama-spot clearly had a system and strategy which worked well for 5-6 months, they’ve shown some poor trading behaviour after they had their first losses (by disregarding their principles, opening more trades, adding to losing positions and making end-of-month adjustments). Overall though Kama-spot is still profitable and there’s nothing to say that they cannot learn from their mistakes and get back to winning ways. However so far there’re no signs of this happening, so we like to see another 12 months of trading history before making a judgement on that.
Please note that this ZuluTrade signal provider review is included here for educational purposes only. Our trader reviews do not constitute advice and inclusion of a trader isn’t to be considered as an endorsement of that trader. Trading on social trading networks and Forex instruments is high risk. Always consult an independent financial advisor if you’re not sure whether this type of investing is right for you.
Kama-spot ZuluTrade performance graph up to April 21st 2013
At the time of this review (April 29th 2013), Fx Primus LIVE ACCOUNT only had a trading history of 15 weeks on ZuluTrade. Hence normally too short for us to consider a review, though there’re some interesting facts on this provider which make it worth to discuss them. The fact that they’re ranked 645 at the moment and have just over $100,000 following them is fairly irrelevant at this early stage. However, based on the limited Fx Primus LIVE ACCOUNT trading history on ZuluTrade, here’s our review:
Fx Primus LIVE ACCOUNT Pros:
- send signal from real money account
- positive results so far (4 profitable months)
- closely managed stops (normally at support & resistance levels)
- trade manually (i.e. no automated robot)
- so far, no overtrading
- professional set-up (own website)
- strategy clearly explained on own website
Fx Primus LIVE ACCOUNT Cons:
- limited trade history
- unknown if trading style will be effected when trading for others
- fairly high slippage
With only 15 weeks of results to work with it’s difficult to properly evaluate the performance of Fx Primus LIVE ACCOUNT on ZuluTrade. So far, results have been positive (see graph below), with a return of almost 1500 pips for an account drawdown of 341 pips and open trade drawdown of 264 pips. Stop levels seem to be carefully managed with maximum stop levels 80 pips away at the moment (though historically the worst trade was -93 pips). With a maximum of 8 open trades this does mean drawdown can be high-ish, though it’s worth nothing that when 8 trades were opened by Fx Primus LIVE ACCOUNT in the past, these were not all in the same currency pair and direction. While most of the time they trade the major pairs (EURUSD, GBPUSD and AUDUSD) they do on occasions trade the more exotic EURAUD and GBPNZD pairs.
What makes Fx Primus LIVE ACCOUNT stand out from the other new-ish ZuluTrade signal providers is that they send signals from their live trading account AND that they have their own promotional website with details about their strategy and approach.
The advantages of following someone who uses a live account are pretty clear. Your loss is their loss. Though in case of Fx Primus LIVE ACCOUNT, they’ve actually gone a step further and they’ve got their live signals from 2013 verified by 4 other independent companies: myfxbook.com, ForexPeaceArmy, Mt4i.com and ForexVerified.com. In fact at myfxbook you can see how much they invest themselves and how much risk they take themselves per trade in relation to their account balance. It’s actually very useful to visit that site (click here) since you’ll notice that at the moment they only risk about 0.13 lots per trade for a balance of $5000 (good example for those ZuluTrade followers who risk too much per trade). Fx Primus LIVE ACCOUNT’s page on myfxbook also shows some additional graphs and stats which are useful.
The advantages of having their own website are slightly less direct. It does offer Fx Primus LIVE ACCOUNT the ability to give more info on their strategy (click here to view their myliveaccount.com website). And yes, they use it to promote their favourite broker and different ways to follow their signals (of which ZuluTrade is one). Obviously as long as they produce positive returns for their followers there’s nothing wrong with them taking some commissions along the way (as long as this doesn’t need to become the key driver). Key here is that they’ve invested time and some money in developing this website and creating their own brand. One has to assume that this means that they’ll be less likely to deplete their account by irrational trading behaviour. While someone sending signals from a demo account can easily set-up another one, for Fx Primus LIVE ACCOUNT it would mean building a new website and getting their new account verified independently again.
Because they send signals from another 3rd party broker (FX Primus) it’s certainly worth comparing your results with theirs in case you follow them with a live account since some significant slippage may occur. We did some tests on 2 different live broker accounts and noticed slippage between 2 and 5 pips (which we consider very high).
So in summary, Fx Primus LIVE ACCOUNT is definitely one to watch over the coming months. Results so far have been good with a well managed risk strategy. A key confirmation point will be when they start getting multiple followers since it’s a different mindset trading with your own money instead of other people’s money (and dealing with their comments). Also the money they make from their own trades will (if they become popular) probably become less than what they make from commissions which has led some other traders change their strategies as well in the past. Again as with many traders with limited trading history on ZuluTrade … time will tell.
Please note that the ZuluTrade trader reviews are included on Social Trading Guru for educational purposes only. They do not constitute advice, and the inclusion of a signal provider shouldn’t be considered as an endorsement of that provider. Never trade with money you cannot afford to lose and always consult an independent financial advisor in case you’re not sure whether this type of investing is right for you.
Fx Primus LIVE ACCOUNT ZuluTrade Performance up to 29th April 2013
At the time of this review (April 17th 2013), EUReka V were ranked 153th in the ZuluTrade ranking but had already more than $675,000 following them with live account. They’ve only been trading for 20 weeks on ZuluTrade and normally we find this a bit too short to do a full review. However we’ve included them here as one of our visitors suggested them and their popularity is growing. Based on EUReka V’s historical trade data, here’s our review of this UK based trader.
EUReka V Pros:
- profitable 5 consecutive months
- follow own signals with live ZuluTrade account
- low historical drawdown
- manage risk by using close stops and limiting open orders to maximum 2
- clear strategy description
- specialise and focus on 1 pair
EUReka V Cons:
- still limited trade history
- unknown if trading style is maintained with many followers
While we have only 20 weeks to work with, the performance graph of EUReka V so far looks pretty impressive. It shows a very gradual increase. Every month so far has been profitable and especially the past two months have been very successful (which is unlike some other signal providers who’s performance tends to drop off after the first months).
EUReka V’s strategy is clearly explained. They trade the EURJPY pair with stops at 50 pips and a maximum of 2 open trades. Yes, their ZuluTrade graph below shows at 2 occasions 3 trades were opened, but the reason for that is clearly explained and didn’t impact results. In fact most of the time, only 1 trade is opened. Profits are let run and range from 50 to 300 pips. An average of 26 pips profit per trade is very respectable.
The maximum drawdown on open trades so far was 98 pips, which is pretty much what you’d expect with a maximum of 2 open trades and 50 pip stop levels. However, because this is clearly a day trading strategy and losses are taken, we have to look at the EUReka V account drawdown as well (peak to valley). This has been 303 pips so far. This is less than the profit booked per month in each of the past 2 months on ZuluTrade, though is about 17% of the total pips generated so far (and at the time it occurred 43%). So if you started following this trader near the end of January 2013 you’d have been down 303 pips before a recovery was made.
With this type of strategy, trade losses are inevitable but on the other hand, drawdown on open losing trades is limited. Using a 50 pip stop level means hardly any losing trades will be open for more than a day, normally only a few hours. As mentioned above EUReka V is trading the EURJPY pair and the daily movements of this pair are higher than those of the simple EURUSD or USDJPY pairs (since it’s derived from both the EURUSD and USDJPY pairs). On average the daily swings are about 2 to 3 times higher than the EURUSD pair so using a 50 pip stop level is already fairly close. It’s worth noting that the JPY has been fairly volatile (and weakened overall quite a bit) over the past 2 months, which may explain the excellent results over this period.
It’s not clear what strategy EUReka V uses for closing profitable trades (i.e. at what level do they take profit), only that they target more than their stop loss level (i.e. more than 1 to 1). Looking at the individual trades it does look however that they never let a 50 pip profit turn into a loss, as EUReka V seems to move their stop levels to break even once a trade is in 50 pip profit.
EUReka V also follows their own signals with a live ZuluTrade account, which is commendable. It’s also worth noting that this trader has another strategy running on ZuluTrade, EUReka III, which trades the EURUSD pair and while profitable, has by far not been as successful as their EURJPY strategy.
In summary, the results of EUReka V so far have been very good when you take into account the lower risk strategy of using a maximum of 2 open trades with 50 pip stop levels. It’s unlikely losing trades will be carried over so at the end of each day you pretty much know your position when you follow a trader like EUReka V. The main caveat is that so far the trading history has been limited and the recent volatility of the JPY may have been particularly kind to their strategy. So far EUReka V hasn’t gathered many followers yet (though the once they have gave a 100% rating). As many of us ZuluTrade investors know, there’re plenty of examples of popular traders and signal providers failing once they got to the top of the ZuluTrade rankings, often because they changed their strategies and started overtrading to get more commission. Hence only time will tell how EUReka V will fair in the long run, though if they continue the current form, their popularity will grow quickly and we’ll find out soon.
Please note that this ZuluTrade signal provider review is include on our website for educational purposes only. Trading on Forex leveraged instruments is high risk. Never invest what you cannot afford to lose and always contact an independent financial advisor if you’re not sure. Any reviews we include should not be considered as advice or endorsements of these traders.
You can always use our ZuluTrade account settings tool or signal providers comparison tool to assist you further.
EUReka V ZuluTrade Pip Performance Graph April 17th 2013
One of our visitors suggested a review of FX Dominus, a ZuluTrade trader ranked 11th in the ZuluRanking on April 8th 2013. At this time of writing they also had over $1.5 million following them with live accounts. They have been trading on ZuluTrade for 61 weeks and based on FX Dominus’ historical trade history, here’s our review of this Switzerland based signal provider:
FX Dominus Pros:
- overall profitable
- based on closed trades only, 14 consecutive profitable months
FX Dominus Cons:
- strategy not clearly described
- maximum SL not clarified and unclear
- high historical drawdown
- high potential future drawdown vs potential reward
- strategy of adding to losing trades (though only up to 4 positions)
Looking at the performance graph (see below) it’s clear FX Dominus has booked an overall profit with a maximum of 4 open trades, though with a few periods of high drawdown. In fact, the pip profit was 3,249pips against an open positions drawdown of -937 pips. At the time this drawdown happened it was equal to about 50% of the profit made. Hence it’s already clear the historical drawdown (i.e. risk) is fairly high against the historical profit (i.e. reward).
Looking at the results per month, FX Dominus closed every month to date, 14 months, with a profit. However, if we include open PnL (i.e. open losing trades), 3 of those months would be losers.
The actual strategy description of FX Dominus is pretty non-descriptive. It mentions multiple currency pairs are traded, though looking at the trade history, only the GBPUSD has been traded. Hence to understand the strategy we actually have to analyse the historical trades ourselves.
While doing this (either via the ZuluTrade interface or in Excel) it’s clear FX Dominus opens a position with the target to make about 13 pips. If the market goes against the initial position up to 3 additional positions are opened. Recently the second position is regularly opened 70 pips away (though it used to be often less). The distance between the first and 4th position seems to be around 200 pips, and at the largest gap was 361 pips. Once further positions are opened, all trades are closed when either together they make the 13 pips profit, or (often in case of larger drawdown) they just get back to break-even.
FX Dominus mentions in their strategy that stop levels are applied to every trade, though at which level is not mentioned and from looking at the ZuluTrade trade history is unclear. The worst single trade drawdown was -424 pips and this trade was closed at a loss of -190 pips, though together with the other 3 open trades at the time closed at break-even in total. I.e. this trade was not stopped out because it hit a stop level, but only because the market eventually turned and their ‘trade cycle’ of 4 trades could be closed at break-even. In fact, we couldn’t really find any evidence of trades being closed because they were stopped out. FX Dominus’ strategy is pretty much a 100% winning strategy if you consider every trade cycle of 1 to 4 trades as a single trade, because they always tend to be closed at worst at break-even. It’s therefore unclear how much the maximum drawdown will be unless the maximum stops are set at the default 500 pip level which ZuluTrade traders often apply. So with a maximum of 4 open trades this would be 2000 pips at risk.
It does look like the people following FX Dominus on ZuluTrade so far have considered the potential risk in their account settings. So far the maximum actual money a follower has made is $262, which is actually a very low amount considering more than $1.6 million is following this signal provider. Hence they must have applied some very conservative settings.
In summary, while overall it’s difficult to argue with the overall positive results of FX Dominus to date, anyone considering following this signal provider on ZuluTrade should seriously consider whether the risk they take on each trade (2000 or more pips?) is worth the small reward of 13 pips. Strategies of adding to losing trades in the hope the market turns will in the long run always lead to massive drawdowns (and potential heavy losses), especially when no stops are applied.
Please note that this trader review is included here for educational purposes only. Trading on ZuluTrade and on leveraged FX instruments can be very risky. Always contact an independent financial advisor if you’re not sure whether this type of investing is right for you. The fact that we review a ZuluTrade signal provider doesn’t in any way mean we endorse this trader or that we follow them ourselves. Reviews are only included to demonstrate our way of analysing traders (and it can therefore be applied to other social trading networks as well).
FX Dominus Performance on ZuluTrade until April 8th 2013
Until recently, Alpari UK was offering social and auto trading to their customer base via Tradency’s Mirror Trader platform. Earlier this year they decided to replace Mirror Trader with their own TraderConnect social trading network.
MetaTrader 4 (MT4) forex traders can connect their trading accounts with TraderConnect, allowing their account activity to be published in real-time for others to see, copy or comment on. Traders can also analyse their own or other traders’ performances with charts and graphs in the TraderConnect interface. You don’t need a live account, since both MT4 demo and live accounts can be connected and their signals copied. If you want to copy other traders using the AutoCopy function you will however need to keep your instance of MT4 running.
It’s certainly an interesting move from Alpari to replace the Mirror Trader platform, which has a much broader user base because it’s used across multiple brokers. On first glance TraderConnect adds a few more “social” features, such as comments on trades, which Mirror Trader was lacking (as its focus was mainly on autotrading). The focus is also more on the ‘traders’ instead of ‘automated systems’. However unlike on Mirror Trader or social trading networks like ZuluTrade or Currensee, traders on TraderConnect are not rewarded for their copied trades.
It does show however the growing importance brokers such as Alpari give to offering a “social trading” capability as part of their customer offering. In the first 2 months they managed to get a few hundreds of live account subscribers, though the social activity is still limited (no comments on trades yet). At the Social Trading Guru, we’ll keep an eye out on the further development of TraderConnect since it’s clearly only started and the real value will be on the quality of the traders it can attract over time.