System Hour Signal Review ZuluTrade SP October 2012
At the time of writing this review, October 24th 2012, this Chinese based signal provider is ranked 2nd in the ZuluTrade ranking and joint 9th in terms of the amount of money invested in them. System Hour Signal has been trading 58 weeks on the ZuluTrade platform. Based on the historical System Hour Signal trading history (click here to view on ZuluTrade) here’s our review:
System Hour Signal Pros:
- no losing months to date
- strategy described in profile
System Hour Signal Cons:
- do not trade with their own money
- fairly large historical drawdown (i.e. higher risk)
- almost no communications
- only 2 star rating
- also known as a number of other (losing) SP names
At the time of this review, System Hour Signal had made a return of almost 8100 pips or almost 600 per month. With no losing months posted to date, these results are pretty impressive. The maximum drawdown (and hence risk) was 2227 pips, which at the time of this drawdown was about 33% of profits. Hence while the results are certainly very impressive there’s certainly some risk which needs to be considered.
The strategy System Hour Signal used is described in their ZuluTrade profile as “based upon integrated, adaptive trend-system which analyses the currency price on 15 minute, 1 hour and 4 hour timeframes. The key is following the trend and using stop loss for capital protection. …”. Looking at the historical trades this does seem a fair description of the strategy which should certainly be considered a longer term. Trades can be left open for quite a few days and the worst level a single trade has gone into negative is -276 pips. With up to 15 open trades it’s easy to see why the drawdown can get fairly high. Arguably, System Hour Signal’s latest communication on ZuluTrade seems to mention they’re moving to a strategy of 5 open trades, though as this was only 11 days ago it’s difficult to quantify the value of this statement (especially with limited other communications to date).
While this signal provider is ranked 2nd and has a fair amount of live followers, their feedback rating is only 2 stars. Most of this in our view was triggered by their latest drawdown in September 2012 of 2227 pips, which was almost double their previous maximum drawdown of 1119 pips reached in May 2012. Hence many followers will have been caught out by this because (wrongly) some people use the previous drawdown level as their potential maximum level. In addition, to recover from this drawdown, System Hour Signal opened 15 trades, while up to that point only a maximum of 10 trades were opened. Since we cannot find any historical notification from System Hour Signal to their followers on increasing the number of open trades we assume most followers would have only allowed 10 open trades in their ZuluTrade account for this SP (a fair assumption based on the historical data at that time) and hence they would not have made the same recovery from the drawdown as this signal provider. I.e. their results would be much worse and hence the probably very justified poor feedback score.
While the results to date have been positive (no arguing with all profitable months) the fact that the number of open trades changed (without notification) to make a recovery makes this a risky SP to follow. Time will tell whether System Hour Signal’s new strategy of only allowing a maximum of 5 open trades will be maintained and generate the same returns. Below is an example of some account settings which can be used when you consider following System Hour Signal in your ZuluTrade demo account. These were generated using our ZuluTrade risk & account settings tool using historical data.
Please note that historical results are not necessarily indicative of any future result. This review is included here for informational purposes only and does not constitute investment advice. When we review a ZuluTrade signal provider this is in no way an endorsement of this signal provider. Investing in ZuluTrade is risky, so please consult an independent financial advisor if unsure whether trading in high risk Forex instruments is for you.