ZuluTrade: Lessons Learned

Trading Systems Expert Advisors and Automated Trading
1

I’ve previously participated in a few threads here regarding ZuluTrade. I know I was very intrigued by ZT when I first discovered it… I saw the returns and percentages, and my eyes just glazed over. I made a killing on ZuluTrade for almost a month, before losing all of that and enough of my own hard saved money to buy a decent car.

It’s now several months later, and I’ve had time to reflect on all of this. At first I wanted to blame ZuluTrade completely, but in the end I had to take responsibility myself for being greedy and stupid. The reason I am posting this thread, is to hopefully educate anyone new to ZuluTrade, so perhaps they can avoid making the mistakes I did. Here are some guidelines that I think would have helped me when I first discovered this site, and perhaps they can help you:

  1. If it looks too good to be true…

The ZuluTrade website is very slick. It shows you exactly what it wants you to see, and hides so many of the things that will blow up your account. For example, there are many thousands of signal providers. The “Top 100” that they love to show off has the longevity of the latest pop music hit. Not many signal providers (SPs) can remain at the top for long- They crash and burn, and you’ll never see them again.

This is what burned me, and a lot of other followers. We see a guy in the Top 10 with a 100% success rate, and just assume he is some kind of brilliant trader. Then one unlucky day, 11 months into his ZuluTrade career, the trader screws up and takes his first loss… Only he has a 100% success rate, so he refuses to close the position as the loss grows. You watch in horror, as it goes down 20 pips, 50, 100, 200, 500! Margin call! This is exactly what burned me a few months ago. I overlevereged and simply refuses to believe that the signal provider could lose, but he did! And they always will, eventually.

  1. YOU need to manage the positions and risk/reward, they aren’t going to do it!

While you’re following a signal providers trades, this doesn’t mean that you shouldn’t have an active role. Remember, this is YOUR money, not theirs. Most of the SPs out there are using demo accounts. They’re doing this… to make money, not to help you protect your savings!

My suggestion is, if you’re going to follow somebody on ZuluTrade, become familiar with their trading style… Figure out what their worst loss is, their average loss, their average win, and look for their weaknesses. You need to compensate. Set your own stop loss overrides to be safe, and take profits if you think the SP is being greedy or if the price reverses 5 pips from their target. Don’t let a winning trade turn into a loser! That’s a golden forex rule. I like to follow them with 1 microlot, and then execute trades manually with larger lot sizes so I have complete control. I like to use the signal providers as “guides” towards solid trading. This is where I think ZuluTrade shines. You can review everyone’s trading history and performance, and decide on what strategies you want to follow.

  1. Always Have a Plan…

Use the signal provider’s history as an indicator of their normal trading behavior. What does their typical trade look like? Do they go way into the negative before winning a trade? Is this normal for the SP? Or are they very meticulous about entries and rarely go into the negative? Do they take 10 pip wins, or 100 pip wins? This is all important in having a plan for every possible scenario. Your plan will be far different for somebody who’s worst low is 400 pips, than it is for somebody with a worst low of 50 pips. Make sure you know exactly when you’re going to leave a trade if it’s a loser… And make sure you’re not overleveraging. If you know you’re going to close at -50 pips (regardless of what the SP does), make sure you can tolerate such a loss (and multiple losses such as this!)

Well, I hope that somebody can get value out of this thread. I know a lot of people go to ZuluTrade and see dollar signs. My friends and I all did, and most of us lost a lot of money there initially. I do believe that you can be profitable on ZuluTrade, but you need to be careful, and have a good plan/strategy. It’s an opportunity, but it’s also a risk. And Forex is a risky business. Good luck to all!

2

Thanks for the great info on ZuluTrade. I looked at them briefly, but never really paid attention. I personally believe that you should learn to trade for yourself, but I agree with you that it could be profitable to follow one of these people on ZT, as long as you do some very in depth homework first.

3

Absolutely, it’s better advice to learn to trade yourself. I’m trying to do that myself and it’s coming along…

5

This is indeed not only an issue with zt. It’s an issue all over the world, where ppl buy into quick rich schemes. You can also find a lot of “systems” in forums and they are designed to win more than they should. After some months those systems will just lose. It’s sometimes not very obvious, because systems can look pretty good over a period of some months. Even with losses. So, always be careful and yea, better trade on your own! :slight_smile:

6

I tend to hold a different opinion. if you invest a small amount your deviation of winning and loosing will be small as well. if you do a good portfolio management before the system looses you can manage to win some good lump sum. It suits me better than handing day and night in front of the mt4 screen and watch the sticks. I personally got tired. If you guys are really good at manual trading …why don’t you join zulutrade as providers, i will easily give some of my capital.

7

Sort of a fund of funds…that could work too. Great idea!

8

Those who know how to trade give signals, others less knowledgeable (like me) follow with their capital, that’s why its Zulu - autotrading :slight_smile:

9

Those who know how to trade, trade. Some seek outside capital and apply that to more trading.

Those who think they know how to trade but somehow don’t make enough money with their allegedly successful systems sell signals to make money in the short term prior to blowing up or while still refining promising (years of good backtest but partial forward live evidence) systems.

Those who commit real, hard earned money to follow other individuals that are putting in major time and losses towards developing practical and effective trading systems - well, forex and capital markets in general is such that many will find it impossible to really explain exactly what happened to their capital when they come out the other end.

If zulutrade superstars can GIVEAWAY (it’s not a loss unless it was a sudden spike in price) 500 pips then most folks are better off putting their money in a professional pooled fund and sticking to annual withdrawals if they’re reluctant to learn trading. I mean how on earth - actually backing strategies that ride out a position 500 pips south. Seriously?

10

Those professional funds you are talking about usually require a large amount of capital; needless to say they are not accessible geographically to all countries - e.g. I live in Russia and would hardly access some fund trust in the UK for example. And it is not about reluctance but more inability to get involved deep in the trading business in general.We are talking here about two different financial instruments, so I am sure there would be many of contradicting opinions.

12

Fully agree. Have had similar experiences where SPs with 50+ week decent track records have imploded taking our trades with them.

Currently we are whittling down to some reliable SPs and also trying to build a set of reliable SPs of our own for others to follow.

It is critical to understand the SPs strategy: otherwise you can’t get lot size right for your own fund base. Case in point: Richter is very reliable but scales into trades. Unless you give him >=10-15 open positions he will often lose money for you on the first 1-2 trades of the pile. On the other hand we have earned a decent return from Richter over a number of months by allowing 15 open positions each of the same modest size.

So if you do your homework zulutrade can be a way to diversify your strategy and save some time at the screen. We can trade (through SPs) market sessions which occur during the night where we are.

13

I know it is some time ago dating your post, so, hope you can manage to reply, but are you still following the traders on zulutrade?

14

It’s been a long while Dima :slight_smile: I have completely stopped trading Forex. After years of trying many different EAs, manual trading techniques, and automated systems, I came to a simple conclusion: This is an EXTREMELY difficult market to trade in. EVEN IF you find a profitable system, chances are it will crumble after x amount of months/years and you’ll lose it all. I believe that in Forex, only a very small percentage of people can succeed… People with rock-steady discipline, extreme attention to detail, and insane patience.

Forex isn’t a get-rich system. It’s a lose-all-your-money system unless you are extremely skilled. I feel really bad for naive people who have to go through this learning process and lose a lot of their money, as I did. If you truly believe you have the determination and skills needed to win in Forex, I’m happy for you. Most of us don’t. The automated systems and EAs simply cannot be trusted. As I’ve seen time and time again, they succeed for x amount of time before crashing and burning. What you really have to think about, is why would those people creating the EAs be selling such a system, if it was so profitable? They wouldn’t, because they would be rolling in cash from the actual profits.

15

I completely agree with you, mate. Btw, have you tried to actually follow? Maybe you will be able to get better results, more stable results i mean.

16

If I were a signal provider I would tell my followers to use 2% of their risk and use fix lots instead of increasing them.

I agree.Honestly,I wish many people don’t enter this business because its a highly risky business.People tend to trade with greed and without good money management.I’m staying in this field maybe because I’m just addicted to Forex

17

I have zero faith in any of those signal providers. Some of you might remember “Zulumaster1” from a few years ago. The guy had well over a year of perfect performance on a scalping style. He had something like 20 million dollars in followers. One day USD/CAD made a huge move, and he refused to close out his positions (down ~100-200 pips). He held onto the positions. They ended up at -500 pips. It destroyed his reputation and bankrupted his followers, who were leveraging their money based on his “low risk” scalping style.

The ONLY reason I didn’t lose most of my money is that I closed my position out at -150 pips and didn’t hang on with a lot of other people. A major trend line was broken on USD/CAD but Zulumaster refused to close it out and lose a trade.

Yet it’s Zulutrade, and guess what? Tomorrow there will be a new “Top 100” with people who will do the same exact thing one day, and new naive traders will come along seeing dollar signs… Until the next big event. That’s why I feel so bad for people who see a site like that, and are blinded by the money. They’ll have to learn the hard way after a gigantic loss, or maybe multiple gigantic losses, until they realize it’s all a fantasy.

18

[QUOTE=“TehCount;595460”] I have zero faith in any of those signal providers. Some of you might remember “Zulumaster1” from a few years ago. The guy had well over a year of perfect performance on a scalping style. He had something like 20 million dollars in followers. One day USD/CAD made a huge move, and he refused to close out his positions (down ~100-200 pips). He held onto the positions. They ended up at -500 pips. It destroyed his reputation and bankrupted his followers, who were leveraging their money based on his “low risk” scalping style. The ONLY reason I didn’t lose most of my money is that I closed my position out at -150 pips and didn’t hang on with a lot of other people. A major trend line was broken on USD/CAD but Zulumaster refused to close it out and lose a trade. Yet it’s Zulutrade, and guess what? Tomorrow there will be a new “Top 100” with people who will do the same exact thing one day, and new naive traders will come along seeing dollar signs… Until the next big event. That’s why I feel so bad for people who see a site like that, and are blinded by the money. They’ll have to learn the hard way after a gigantic loss, or maybe multiple gigantic losses, until they realize it’s all a fantasy.[/QUOTE]

Watch out, the Zulutrade Gestapo will pounce on you.

19

Hey if people can successfully make money on ZuluTrade, good for them and as I said in my original post, I blame myself for the losses I have taken, not ZT. This is all just my personal opinion and people need to do their own due diligence. It doesn’t matter whether it’s ZuluTrade or one of the other signal provider sites, or an EA, or even manually trading. New traders need to be careful and realize this isn’t a get-rich-quick idea. It’s a profession and like any profession, you need the right skills to succeed.

20

I think this is one among the best comments that I’ve read in a long time!!
I seriously cannot agree with you more. Are you still trading on zulutrade, tehcount?

21

I totally agree here with you mate. I’m a signal provider on zulutrade too. My description says that every follower have to use the 2% money management rule. If everyone would do that there would be no harm but a lot of people are to greedy and set there lot sizes to high which can reflect in huge losses when the market turns against them. People have to do their homework and don’t look at the pips but at the whole statistic page like drawdowns etc. I trade my self with success but not many can do the same and that’s why I’m signed up at zulutrade. I want to make money for other people and what I earn is only a detail. I earn enough by trading myself!

https://www.zulutrade.com/trader/169063

22

[QUOTE=“thejoery;598087”] I totally agree here with you mate. I’m a signal provider on zulutrade too. My description says that every follower have to use the 2% money management rule. If everyone would do that there would be no harm but a lot of people are to greedy and set there lot sizes to high which can reflect in huge losses when the market turns against them. People have to do their homework and don’t look at the pips but at the whole statistic page like drawdowns etc. I trade my self with success but not many can do the same and that’s why I’m signed up at zulutrade. I want to make money for other people and what I earn is only a detail. I earn enough by trading myself! https://www.zulutrade.com/trader/169063[/QUOTE]

Good advice, but should you not follow your own advice? Do you use the 2% money management rule? It appears not. What’s your strategy, let trades run until they go your way? Your account shows a 79% drawdown and a loss where the trade went 1200 pips. Where was the stop loss?
Thanks for the input though.