Zulutrade and Case Sensitivity

Greetings fellow Zulu-traders. One thing that surprised me about Zulutrade is that Signal Providers names are case-sensitive. To see how confusing this can be, consider the fact that there are 2 signal providers, one called Bigwin and another called bigwin. Let's take a look at the 2 providers to see how much difference one character can make.

First let's look at bigwin. My first impression is that he has a lot of aliases. This means he has a lot of experience, but also has tried a lot of different things. The other thing I notice is that he previously traded under the provider name auto-fx which I previously blew out of because he would enter positions and just wait for them to come back.

You can see this behavior right away in the performance results. For three month's activity, he has +400 pips closed profits, but he has -600 pips in open positions.

Finally, scroll down (not shown on the left) and he has 98% winning trades. In fact, he has 99 total trades and only one loosing trade, minus -993 pips. A signal provider that does not take losses is a red-flag. This is because since he's not playing with real money, his only objective it to "paint the tape" with winning trades. Sadly, this will draw the unsuspecting Zulu-novice and trash their accounts.

Next, let's take a look at Bigwin. Notice straight-away that he has only one alias. There was a time (prior to Q1 2009) when providers could open accounts under many different names and we had no way to tell who was who. The fact that this provider has only on other account is a good thing.

Next, notice that he has no open losses. This means that he either makes good trades with minimal drawdown, or takes losses when they occur.

Finally, scroll down (not shown) and notice that he has a more reasonable 82.5% win rate. This means that he a high win rate, but not unreasonably high.

Does Bigwin always make money and never loose? Let's take a look and some other time-frames. He has no trades in the past 3 days. But he has shown positive returns in the 7-day, 3-month and 6-month time frames. He has lost money only in the 1-month time frame, and this was on the GBP/USD move up to 1.70 which has since re-traced, but not without doing some damage.

In summary, pick your signal providers carefully. Also, i'm going to take a look at Forex Bridge alter-ego of Bigwin who also looks promising.

More on the Margin Call -o- meter ™

Many thanks to Digian and James over at
http://www.zulutradeblog.com/ for bringing up the issue of the Margin Call -o- meter ™. I must confess James is the originator of the Zulutrade blog concept, and i'm just a wanna-be.

Anyway, the Margin Call -o- meter ™ is a quick, graphical way of letting the user know how likely they are to blow-up their account based on their provider and account settings. The data appears as a thermometer-like zero to 100 scale. They even color-code it so that low numbers are a nice soothing green and the higher-risk values are a high-blood-pressure inducing orange to red. As you can see above, the meter shows my current odds of blow-out at 82.8% which is pretty high for a conservative guy like myself.

By way of background, Zulutrade updated the o'Meter in the past few months to include a calculation regarding the number of open positions each provider is likely to open. To prove this, let's take a look at a few sample setups.

First, setup your account for provider Bigwin. Click the Advanced link and set him for 1 Max total open trades with a Stop value of 180 pips. The screen will look like this:






Next, setup your account with provider Pro-B5. Click the Advanced link and set him for 1 Max total open trades with a Stop value of 180 pips. The screen will look like this:






That's a pretty big difference, 58% chance of blow-up versus 2.1%. What's the difference? You can't see it on the setup screen but its the number of concurrent positions opened by the provider.

Why should Zulu so strongly consider the number of open positions? Its because Zulutrade is merely an interface which passes orders to the FCM for execution.

Consider the scenario where ZT sends a trade to the foreign currency merchant (FCM). FCM executes the order but for whatever reason the confirm doesn't make it back to ZT. Signal provider sends another order, but ZT's order limits are not honored because as far as ZT is concerned, you don't have a position open. From there it gets ugly and you can imagine what happens next.

I've had some minor issues with Zulutrade executions, but nothing that bad yet.

What's the moral of the story? Don't bet your mother's, grandmother's or your kid's college fund on currency trading. And btw...

Cheers to James and his Mrs for their new arrival!

Open a free account on Zulutrade at http://zulumon.zulutrade.com/

Bigwin stumbles - gets back up

Back on 8/4, I took some heat in an anonymous comment regarding my support for Zulutrade provider Bigwin. The criticism compared him to FxMarkets, a provider who whacked my account with a 600-pip loss (in almost no time) back on 1/5/2009.

Later it was revealed that FxMarkets was one and the same as about 1/2 dozen other providers on Zulutrade who were among the best performers and had the biggest followings. I found out the hard way that this provider tended to open many GBP/JPY positions, let them run into the red and then wait for them to come back. Check out my blog entry for 2/22/2009 for more info.

Anyway, I don't think the comparison is warranted and here's why.

Bigwin took a hit on the recent run in the GBP/USD up to 1.70. He went short at the breakout point at 1.67 and at one point he had almost 86 positions open at once which is clearly unrealistic. I stayed with Bigwin during that period with a 2-lot limit and a 180-pip stop thanks to feedback from Zulutrade provider Pro-B5.

The performance graph from above shows that at one point I was up almost 900 pips using Bigwin. His recent stumble cut those gains in half, yet he was able to come through the period and sustain and upward trajectory. Some of the gains he made on the rebound came from a later short he put on after I got stopped out of one of his earlier positions in that same run.

Of course, you could make the point that the only thing that bailed out Bigwin was the fact that the breakout failed, and GBP/USD moved back toward 1.67 and below in his favor.

In his performance last week, Bigwin managed to pull in 46-pips even though he didn't trade at all on Thursday and Friday 8/20 and 8/21. So for the time being, i'm still sticking with Bigwin with a 2-lot limit and 180-pip stop.

Open a free Zulutrade account at: http://zulumon.zulutrade.com/

Pro-B5 responds

Zulutrade provider Pro-B5 has generously responded to my post and has some interesting things to say about the Zulutrade platform. His whole response is below, but here are my key takeaways:

• I reduced my stops from 500 pips to 180 pips
• Pro-B5 communicates regularly with ZT founder Alex Leon regarding allocating a fixed amount of capital to each provider. This would result in realistic performance history and address the fact that the performance on the site is purely theoretical - since its based on unlimited capital.
• Technical problems with trade opening and closing are an ongoing risk with the ZT platform are solely at the risk of the ZT user. I knew this already, but since it hasn't happened to me in a while and I needed a reminder.

In summary, Pro-B5 is a real asset to the Zulutrade community and we are grateful for his efforts! Full text of the reply is below:


Hi TCX System

Interesting Post, just as a guide, I have to be careful about the daily range on the GBP-JPY which is about 280 to 326 pips per day. Only after having study that will I place a trade.

This is why some time I will not trade on Zulu if the price action is at the extremes. Since I will not risk a big stop or put the client’s money at risk in such a foolish trade.

I will let the other providers play games. I am here to win, and yes I will lose. But I will get back my losses in an orderly fashion like you seem that I have done, One trade at a time MAYBE 2 lots but never will I go nuts trying to keep a "green Tape" ever again. I leave that to those others that call themselves traders.


I know that Zulu has had problem and I took the heat from the users that did not have their trades close in profit and suffered on a winning trade of 23 pips a lose of close to 200 pips.

They take there anger out on (me)the signal provider at times when it is out of my hands That is why I think the rating is nothing more than a place to vent anger and means nothing to me. Also I e-mail Mr. Leon almost 3 times a week and I know for a fact biased on his e-mail that Zulu is addressing the problems with painting the tape and will put a fix amount of capital on every signal providers to match a real demo . This will keep them from opening so many trades. To me people blame Zulu for their own acts of greed and foolish mistakes. I am sure if the problem was on Zulu they would make it “good” and correct it” . But they sometime also take heat when say the API for FXCM goes off line and trades will not close. They have problems we all do.

Now what happens when there is a tech mistake? People do not want to hear the excuse. We all risk money when we trade. I risk a trade that is positive going into a loss because Zulu has a problem. But I deal with it and move on to the next trade. There is no need to cry about it .That will not get back my loss. I am reasonable and I will get my loss and my clients. Zulu can correct the problem which I have witness this first hand.

We all have seen when people are on a roll with “painting the tape” they feel they got the next Holy Grail and can do no wrong, but when they give back all the winnings and all their trading capital it is to late. But since most of Zulu’s clients are retail traders they just never learn.

The world 4 top hedge funds one binging Paul Tudor ( Tudor Fund) which avg a yearly return of 58% and one year made 98%, What makes people think they will make 50%+ per month is beyond me. Again it shows they know very little about trading and are hoping to get rich quick,

Also there is NO need to use a 500 pip stop NEVR set it at 180 max. Because bet your lost damn dollar I will close the trade unless God take my life at the moment I am closing it. Other wise it will get done , and” no if” about it.

This is an open source e-mail post it if you like,

If you or any one suffer losses because of my wide stops 9 months ago .I am TRULY SORRY. This will never happen again .Watch my actions not my words.

No one is prefect but a real trader must stand by his belief and I will stand by mine. Even if I lose 90% of my people because other make more pips by “painting the tape” or using 500 to 1,000 pip stop lose .Than I really do not need user like that . I want real investor large or small.

Thank you , and wish you all the Best

Pro-B5


Sincerely,Pro-B5

Risk Warning:The Off Exchange Retail Foreign Currency Market(FOREX)has opportunity for large potential rewards, but equal opportunity for large potential loss. Be aware of the risks and be willing to accept them in order to invest in the Forex markets. The possibility exists that you could sustain a loss of some or all of your initial investment and there for you should not invest money that you cannot afford to lose. Nothing in our e-mail or website shall be deemed a solicitation or an offer to Buy/Sell currencies ,we are not liable for any loss or damages. No representation is being made that any account will or is likely to achieve profits as past performance of any trading methodology is not indicative of futures results. Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed.

Open a free Zulu-trade account at http://zulumon.zulutrade.com/.

Pro-B5 - promises and delivers

Zulutrade provider Pro-B5 has been bringing home the pips since I added him as a provider back in early June. Even more impressive is the fact that he hasn't had a single loosing trade, and the largest drawdown I saw over the period was 50 pips! Since adding him back on 6/3/2009, he has netted me 138 pips with a single 10K lot allocated and a 500-pip stop which fortunately, he has come nowhere close to hitting.

Recall that I had some earlier mis-adventures with this provider under the name Probability Based Wave-5 - which has since disappeared off the Zulutrade system. See my blog archive for Feb 2009 for the gory details.

Since then he has changed his spots considerably and you can see that from his profile page. On his profile, he exposes the performance fallacy that often sinks aspiring Zulu-traders. Many providers open 15-20 lots at a time and "paint the tape" with successful trades - knowing full well that the Zulutrade performance history screen shows only 10-trades at a time. Paint that window with all green-pips and making money with ZT looks like a cinch! In reality, most accounts can open a most just 1 or 2 lots, so the performance numbers are greatly overstated. He avoids the pitfall that so many other providers fall into - since they get paid per trade - they tend to put on tons of trades and try to run up the score. But they eventually they come crashing back and often take their gains with them. No so with Pro-B5 who has so far stayed true to his low-risk, one-trade-at-a-time mantra.

As an additional bonus, Pro-B5 posts on Twitter at http://twitter.com/ProB5 and via yahoo mail at pro_b5@yahoo.com for live subscribers. This helps to lift the veil of mystery around him as provider. Anything Zulu-trade can do to de-mystify there operations is welcome, become sometimes I get the impression that the whole outfit is run out of a closet in a former Soviet republic.

The only caveat with Pro-B5 is that he sometimes goes days without making a trade and us Zulu customers like to see more of a daily effort, even if its just one or 2 trades. That said Pro-B5 is a winner and i'm sticking with him as a provider!

Open a free Zulu-trade account at http://zulumon.zulutrade.com/.