FxArena Mystery Trade

Some Zulutrade users have reported trade disputes - situations where stops were not honored or something went amiss that ended up costing them money. I had a related issue this week.



I was watching my account pretty closely on Wednesday after the Pro-B5 blowup. All of the sudden I saw a loss for $-84 come out of nowhere. This struck me as strange since this wasn't close to my stop of -150 and providers generally avoid losses like the plague. I checked the trade history, open positions, and could find no public evidence of this trade anywhere.

I sent an e-mail support@zulutrade.com and they gave a short reply about a stop being hit. I replied that this was nowhere close to my stop level. They came back the next morning asking for the broker ticket # (which I had already sent them) and then heard nothing back.

To this day I still don't see any evidence of this trade in the public record. I suspect it was a mishap where the trade went into the system and got lost. It didn't appear anywhere until it got closed out.

Anyway, be aware that this is one of the risks of dealing with Zulutrade, that their system could screw up and you could loose money as a result and they have no obligation to reimburse you. Fortunately, it doesn't happen often and my other signal providers quickly made up for the loss.

Shaken out of Pro-B5

After last week's revelation that Pro-B5 was the conservative arm of "Probability Based Wave-5", I added Pro-B5 on Monday with one lot and 150 pip-stop

He scalped me a few pips on Tuesday and all was well in Zulu-land.

Then came Tuesday and he did it to me again! He went long GBP/JPY at 141.70 at the worst possible time. To add insult to injury, he added positions on the way down. Fortunately, I was limited to 1 lot, so damage was minimized. My 150-pip stop was hit later that morning. This was eerily reminiscent to a recent trade he made by going short GBP/JPY at 118.95 (at the exact bottom) under the provider Probability Based Wave-5.

I went back and checked subscribed counts and Probability Based Wave-5 has only 38 subscribed users, while Pro-B5 has almost 300 subscribed users! Naturally being drawn to the account where he's going to make 10 times the profits, he migrated his aggressive strategy over to this supposedly conservative account! Goes to show you what a minefield picking providers can be!

Lesson learned is that this provider is too risky for me. I want to have open a most 2 lots per provider with a 150-pip stops so Pro-B5 is not for me. I removed him on Thursday. He did make a few other winning trades, but overall this provider cost my account -80 pips.

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Signal Providers revelation

This past weekend Zulutrade activated a feature that let's you see what signal providers are using multiple names. This is important because it easier to really know who's who.

The biggest find was the following:

4X Finance, 4X World, FxMarkets, GBP$, GBP/JPY Club, JackPot, Never Lose$, PipGenerator, Pound Cake, Scalpers GroupClub4x

Are all the same provider!

This is significant because these are among the top providers in all of Zulutrade historically. This provider is almost exclusively a GPB/JPY seller and will do well when GBY/JPY is in a downtrend - which it was for much of last year.

Beware, however, because this provider likes to keep large open losses (as large as -1000 pips) to keep his win % so high. So don't use this provider unless you can stand large open losses. You may make money short term, but eventually, you will go into an extended drawdown.

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Selected Signal Providers - 02/22/2009

Here are my currently selected signal providers:

Live Account
Oxford Gobal Fx Fund
JzFx
High Rollers
FXArena
HomerPoet

All providers set to 2 lots max except for Oxford and JzFx set to 1 trade open max. Stops set to 150 pips on all providers.

Demo268
FxCompass - FX Compass has done well
Averaging - not so well

Demo664
OneSignalOneProfit - Climbing out of a drawdown impressivly
Forex Builder - Loosing
FXArena - Looking good

Demo067
Shorttrade - Shortrade is a winner
10pips - nothing doing

Demo761
Forex Guru - Can't figure this person out its a guy, girl what

Demo814
Never Lose$ - Same as FXMarkets
No Drawdown - Both had a good week

Demo033
Cobotan - Very consistent but drawdowns too large for my taste

Demo150
Homerpoet very consistent

Demo746
High Rollers rules supreme

Demo226
Firepips doing nothing

Demo130
Mayfair swing
Magic FX both not impressive

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Provider selection criteria

Here are my critera for selecting signal providers. I'm a relatively conservative investor and I want to grow the account, as safely as possible with capital preservation a high priority:

1) No large, open drawdowns.

I avoid providers that hang onto large, loosing positions for weeks or months. Ideally the provider should have no open trades, since I usually do my analysis on the weekends.

2) Consistent effort

I'm okay with part-time traders, but I need to see at least one trade every 2 weeks or I assume the provider is disengaged.

3) 85% or better winning percentage

4) No "Painting the Tape".

Whenever I see an entire screen worth of the same trade, I assume the provider it taking multiple open positions. I'm limiting my trading to 2 open lots per provider at one time, so this is a negative.

5) No large drawdowns in History

Whenever I see multiple trades going more than -200 pips, in the account, that's bad. My stops are set to about 150 and those trades would all be loosers for me. Plus, I can't understand the fact that a trade would go that far against the provider without them closing it. I can't take those type of drawdowns.

6) Must have at least 3 weeks history.

7) Must have live, subscribed users.

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Top 10 things you need to know about Zulutrade

Top 10 Things you need to know about Zulutrade:

1) Most of the providers are trading demo money.

They can afford to sit out large losses because they don't feel the pain.

2) Profits will likely be 1/10th of the demo account.

Demo accounts use full-size (100K) position size. Unless you will have 50K to invest, you will be using a Mini Account (10K) and the profits (or losses) will be 1/10th of the demo account.

3) The size of the loosing trades (amount lost) in most cases will be larger that the size (amount won) of the winning trades.

This doesn't mean you can't make money. As long as your winners outnumber your losers, you will be in the black! For example, you may have series of winning trades, and you are up 160 pips. Then a trade could come along where you loose 120 pips, and you are now back down to +20 pips.

4) Drawdown is inevitable.

Trading forex is extremely unpredictable, and even the best good traders will have loosing trades.

5) Beware of providers with very high % profitable.

They often leave trades open for as long as it takes for them to become profitable again.

6) Some providers trade under multiple names.

Zulutrade recently added a feature now where we know who is really who which is extremely helpful.

7) The Zulutrade platform has had some history of issues where trades were not placed or execute properly. If you loose money because of a glitch in Zulutrade's system, Zulutrade will not reimburse you for funds lost. This has not been a issue for me.

8) Currency trading is stressful and every unpredictable. If you are going to invest real money, start small and slow.

9) Zulutrade support can sometimes be spotty and I get the sense that is an extremely bare-bones operation.

I'm not too concerned about this because my money is with the FCM in my case FXCM which is safe.

10) Picking signal providers is a lot of work, and that's where I will try to help with this blog!

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Welcome

Welcome to my blog regarding Zulutrade!

Zulutrade is a fascinating on-line economy that makes it easy to trade foreign exchange, without having to do to the trading yourself. Instead, you pick amongst Zulutrade's 100's of experienced Forex traders, and they do the trading for you. Best of all, its totally free to the investor and there are no maintenance, performance or other fees of any kind.

Imagine for a second the Zulutrade dream - people all over the world working hard to stuff money into your pocket while you go on with your life!

Well it sounds amazing, and it is. But of course, there are always "gotchas", things they didn't tell you ahead of time that you would only know having gone through it yourself. We'll i've been through it and this blog is dedicated to making it easier for you to be successful with Zulutrade. I'll tell you the low down and share my latest provider picks.

That's enough for now - may the pips be with you!

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