Zulutrade meets Twitter

Greetings fellow Zulu-traders. A few Zulutrade signal providers have set themselves up on Twitter, here are ones I know about:

Pro-B5

FxFilapea

This is a great way to get more information about your signal providers - and what's going through their heads. Also provides a medium for signal providers to communicate with their subscribers. While Zulutrade may not be 100% happy about this - as Zulutrade customer I think its great. The more we know about signal providers the better!

If anybody else knows of any Zulutrade providers posting on Twitter, please leave me a comment or leave a tweat with "Zulutrade" in the text. Cheers.

Bigwin goes into drawdown

Zulutrade Provider Bigwin broke his recent low-drawdown streak today. He sold a whole bunch of GBP/USD (almost 17 lots) between 1.6226 and 1.6254. Unlike recent trades - which he was able to close at a small loss - these ran away and I was able to close one lot at a -48 pip loss and another at a -73 pip loss. I turned around and went long GBP/USD and picked up a quick 13 pips in the other direction.

Nothing surprising here since Bigwin was due for a pullback. The only thing that bugs me is the Show Current Signal Providers' Trades view on the positions tab shows all the open positons (last 8 on the left). the Open Positions line item on the performance tab shows no open trades.


By the time I got this post done, the open trades showed up on the P&L summary on the left (shows -1599 open trades). This is important since while the winning trades show up right away on the performance tab, the open failing trades don't show up immediately.

Just one more thing to be aware of - what you see on Zulutrade is not always what you get!

Bigwin on a Big Roll

Provider Bigwin is on a major roll. Since adding him as a signal provider back on 6/4, he has pulled in over 450 pips. Better yet, he seems do be able to do so without any significant drawdowns.

Bigwin seems to be able to let a profit run, unlike any other Zulutrade provider I have ever seen. In my second trade (back on 6/8/2009) we were in the midst of a major rally in GBP/USD, he picked up 259 pips on a single trade. Shortly after that, he had a pair of losses (-91 and a -55 pips). Since then it has been onward and upward with 40 trades with 36 winners and 8 losers. The biggest loser in that 40-trade run was -17 pips!

The only fly in the ointment with Bigwin is that since he trades 10-20 times per day, the Zulutrade "Margin-Call -o -meter" gives him a high-risk rating. I have him set for 2 lots with a 500-pip stop for each position. With $7500 in my account, you would think I can handle a 500 pip-loss times 2. But in the strange world of Zulutrade, he has a risk of blowing up my account. How is that possible? It goes something like this. Signal provider puts on 10 simultaneous trades - typically all the same currency in the same direction. Currency gaps -500 pips against the position. A technical glitch occurs where the stop loss is not honored, or the Zulutrade's signal to FXCM to close the position is somehow rejected by FXCM. As a result, my account is now socked with a -500 pip loss times 10. While is doesn't seem likely, its possbile and is clearly part of Zulutrade's thinking when they put this meter together.

For now, i'm not too concerned about the Margin call - o - meter. I am concerned about the fact that Bigwin has 708 users following his signals. Let's estimate that 500 of them are with FXCM. That means that every time Bigwin trades, $5 million dollars of positions get put on for every lot that Bigwin trades. Multiply that times 10-20 lots and Bigwin has the potential of causing some large losses for FCM if they are unable to offset those trades in the Interbank FX market. Since these trades tend to be scalps (take positions only for short periods of time), its more difficult for the FCM to offset those positions. Thus Bigwin has the potential of causing the FCM's to loose money and hence pressure builds to for some big price move to occur in which the FCM's get even for all those losses. One way to avoid this is to keep positions open only for short periods of time and to trade only during active hours (2AM-12 Noon EST for the GPB) which Bigwin has been doing. Its harder to manipulate currency prices when all players are active, much easier after hours.

For now, i'm sticking with Bigwin, 2 lots with a 500-pip stop loss. Stay tuned for updates.