Bigwin is back!

Welcome back Zulutraders!

After a 2-month hiatus, Zulutrade provider Bigwin is back!

Bigwin disappeared from the Zulutrade scene after that nasty GBP/USD breakdown that occurred at the end of September leading to my post Bigwin Blows up, skips town. I was disappointed at the time because of all the providers on Zulutrade, I made more from Bigwin than any other provider. The graph above shows his total affect on my account. At one point he was up over 1000 pips, but gave it back on a nasty GBP/JPY trade.

Its good to see Bigwin sticking to the GBP/USD and EUR/USD which are his core strengths. When he starts trading GBP/JPY it gets a little dicey.

Looking at Bigwin's trading history across all timeframes, he positive in every timeframe from 3 days up to one month. The 3-month history looks nasty and shows down about 5,800 pips. Then he's positive in the 6-month and every other timeframes out to his 8-month history on Zulutrade.

The difficulty is that at times he opens a large number of positions which exaggerates his returns, both good and bad. It would be handy to see how he did if I could limit it to 2 lots with a 180 pip stop. Its so frustrating that Zulu doesn't give you the ability to see how the provider would have done with a 2-lot limit, and some type of reasonable stop loss. I have to get that query going, stay tuned.

For the time being, i'm thinking of dropping Coolie and going in one lot on Bigwin. We'll see.

Tcxmon

Zulutrade - Coolie 1997 - What's the Deal?

Greetings Zulu-traders.

We've seen a marked difference in trading behavior and results of our recent favorite Zulutrade provider Coolie 1997 in the past few weeks.

In response to my post Zulutrade Provider Coolie 1997 responds! back on 10/13, we had a lively exchange with 14 comments where Coolie responded to various questions and described his method for his Zulutrade positions. Based on his performance, and degree of loss control, we went live with Coolie back on 10/12. From there, he went onto a high of +59 pips on a max drawdown of -89 pips.

That was the end of his run and now i'm down about -500 pips on Coolie not counting the -100 pip open loss in an EUR/USD position. Every trader goes through drawdowns and that is to be expected. But this is an outright change in behavior. Here is some hard data to back up that observation:

From his start on Zultrade back on 6/29 through 10/13 Coolie had an average high of 49 pips, and average max drawdown of -41 pips and an average profit per trade of nearly 26 pips. Since 10/13, he's had an average high of +48 pips, an average max drawdown of -103 pips and an average gain of -79 pips.

Also, Coolie hasn't closed a trade since 10/22. In term of his open trades, here are the stats:

AUD/JPY 10/27 - 1 BUY at 84.14 - now 80.99 down -315 pips
EUR/USD 10/27 - 1 BUY at 1.4813 - now 1.4712 down -100 pips
EUR/JPY 10/27 - 1 BUY at 136.864 - now 132.38 down - 448 pips
USD/JPY 10/23 - 1 SELL at 91.93 - now 89.98 up +195 pips

Overall, he's down about -668 pips on open positions. Generally, I don't have a problem with that except for the sharp difference in trading behavior. Many of these positions moved in and out of profitablity (within past profit-taking behavior anyway) but these trades seem to be abandoned overall.

I don't know what's going on with Coolie, but here are my theories:

1) He's decided to revert to his own trading style (long term position based on fundamentals) he uses for his own real money and eschewed his prior Zulutrade trading style (aka 6th sense).

2) He's no longer engaged with Zulutrade and busy with work, personal or other family matters.

We're not due an answer, but Coolie, if you are reading, please give us an idea what you are doing. Absent your response we have to conclude you are not longer engaged and have to go onto to find other providers who pay more attention to our money.

To Coolie 1997 and all our readers - hope all is well with you and your family.

Best regards,

Tcxmon

Zulutrade - Range based stops by pair

Greetings from the land of Zulu.

As a follow-on to my post about stops a few weeks back, I took a look at daily ranges for the top-10 pairs on Zulutrade.

To find the top-10 pairs, I ran a query against my new MS-Access based database of Zulutrade history which has contains over 100,000 trades over about 400 providers. The plan is to update the data once a week after the close on Friday and see what intesting facts and trends that we can glean from the data.

Anyway, back to the issue of stops. I concluded in the other post that you need to look at the range of the pair. The table above shows the Average True Range (ATR) for the top-10 pairs. The second column is 1.5 time the ATR. The idea is that if your stop value is less than 1.5 times the ATR, you are likely to get stopped out based on nothing more than average daily movement.

To get these values, I used the free charting available at http://www.dailyfx.com/charts/. Select your pair, then switch to Daily time frame. Add the ATR study with a lookback of 14 bars. Click View, Information and you can see the latest ATR value as well as see its historical trend.

It makes sense to revisit these values about once a week. I read a while back that the legendary Turtle Traders were provided a printout of ATR values for each major commodity pair once a week on Mondays. The point is there a solid historical precedent for using ATR to determine stop values.

I currently use a fixed stop of 180-pips. Based on the table above, my stops are probably too tight for about half the pairs and just about right for the others. Zulu has a feature where you can set custom stop values by currency. I haven't gone as far as setting up custom stops by pair, but that's the next logical step.

That's all for now, have a great day.

Zulutrade - Profit to Drawdown provider analysis

Welcome back to the Zulu Jungle.

Here's an analysis of the providers I identified in the 'Profit to Drawdown' scrub posted 2 days back. One common theme is that most of them appear to be runing some type of Expert Advisor system implemented in MetaTrader 4.

NewForexAge has 10% of his total profits in open losses and has positions open for more than 79 days, doesn't appear to be able to take a loss.

Isunia -Test system using 1 and 4 hr systems, has open positions over 90 days. This provider is #6 in terms of total users on ZT. Despite over 90-days open position, i'll give this provider a try.

cp-novafx - this guy has a bunch of open accounts, all with Nova in the name. Thinks of Forex as an investment, not a speculation. Recommends Micro lots with $4300USD deposit. Looks interesting, but i'll take a pass for now.

Romeda This guys smells like a provider I used a lot earlier this year called HomerPoet. He later morphed into mmtwta, and the EURGBP-Scapler. I'm concerned this could be just HomerPoet with a new e-mail address. Also, he's got -2000 pips in open losses for +9000 pips in open profits, so i'm not convinced he's got any sell discipline.


Student True to my analysis, this guy seems to take pretty good size profits for very little drawdown. When does drawdown, he does so big, but that can be addressed with a stop loss. I would say he's demo-worthy although he's got only one user following him (presumably himself) with no live users. Giving him a try on a demo basis.

Sophistication - This guys appears to have some following and also trades British Pound which was featured in a recent Zulutrade Newsletter. According to the description, this is a sentiment-based indicator based on SWFX sentiment indicator. This guy is definitely demo-worthy along with British Pound.

Fairtrade It takes a careful eye to notice that even though this guy shows a profit of ~ +9000 pips, he's actually lost money as a provider! How is that possible? Interest roll perhaps? Yet another pitfall in the Zulu jungle.

ok798 Too much drawdown for me. I think the only way he made the screen is that he's opening 10's of lots per trade. Sure, he's make 176,000 pips, but on -195,000 pips of drawdown. He's having good fun playing with funny money. I'm not amused. Next.

OranjFx This provider could be a contender for a Micro account. This user appears to be unique, but I don't know I can get a realistic test with a 50,000 full-size demo account. A 10,000 micro account perhaps..... Next.

JLOFX French provider trades stricly EUR/USD. Appears to have reasonable drawdowns and a solid system. Definitely demo-worthy.

wqq899 GBP/USD - Looks demo worthy.

zulu888 Has positions open +56 days. next.

YasuM Has actually lost money even though he's made positive pips. Must be the Interest roll again.

New demos:

Isunia, Student, Sophistication, JLOFX, wqq899

Zulutrade - Profit to Drawdown

Greetings and welcome back to wild world of Zulutrade!

When evaluating Zulutrade providers, it helps to pick providers with a high profit-to-drawdown ratio. This ratio measures the amount of profit you experience for a given amount of drawdown.

For example, a provider that takes a 40-pip profit after a 40-pip drawdown should be considered above a provider that takes a 40-pip profit after a 300-pip drawdown. This measure helps to distinguish between providers that have good entry points versus those who just enter, then wait as long as it takes for a position to come back to show a profit.

To do this calculation, I analysed the top 400 Zulutrade providers using a system I developed earlier this year that surfs over to the Zulutrade site, downloads data for a whole load of providers, and builds a local database of provider trade histories. The system uses a combination of "web scraping" via VB-Script and XML parsing inside of MS-Access to populate the database.

To calculate the drawdown ratio, I summed up all the pips earned and divided by the sum of the maximum drawdown for those same positions. The higher the number the better, it means the more profit generated for a given amount of drawdown.

The results are shown on the left. I filtered out providers that didn't trade in the month of October or had less than 50 trades total.

This screen doesn't mean that all these providers are good, it just means that they produce more than one pip of profit for each pip of drawdown on average. I will analyse this list of providers and pick a new set for demo accounts in a future post.

I should also point out that some providers might have profit-to-drawdown ratios less than 1 and still be perfectly good providers.

While i'm on the topic, here a few other popular providers and their profit-to-drawdown ratios:

GasCan69 - 0.72
Coolie 1997 - 0.46
LowestDD - 0.46
Hehehe - 0.34
Pro-B5 - 0.29
TrendCatcher - 0.22
AkhterFx - 0.20
Davincy - 0.16

Again, the higher the number the better. More to come in a future post.

Open a free Zulutrade account at http://www.zulutrade.com/ but please be careful before you commit real funds!

Zulutrade Weekly Update - 10/23/2009

Welcome back Zulutraders.

Since Zulutrade demo accounts only last 29 days, we have to extract whatever useful information we learned from the demo before the accounts disappear. So here's are the results of our demo accounts started back on 9/27/2009:


Coolie 1997 came out on top +223 pips. At one point he was up almost 500 pips, but 2 of his trades hit my 180-pip stop in the past 2 weeks of the test period.

In my real account I wasn't as fortunate since I joined him right at the top (talk about top-ticking a trade) and took a nasty drawdown pushing my real account to fresh lows. But I don't want that to take away from Coolie since he's had a pretty solid record so far in his just over 3 months on the Zulutrade. Thus far his max drawdown has been -431 pips.

One truism of trading and growing your account is that there's always a bigger drawdown coming your way. So don't be surprised when it happens and realize its just a part of trading. After that you just have to pick yourself up and do what it takes to get your account back on an upward trajectory.

Next up on the demo accounts was Trendcatcher who was up +52 pips over the demo period with a maximum drawdown -120 pips. Trendcatcher does have a way of keeping his losses down and he hit my stop of -180 pips only once in the demo period. He was then able to come back from that loss which is a good sign. I'm going to follow Trendcatcher going forward.

Next up was TheKillerz who was down -158 pips of the 3-week period this demo account was active. His profitability remains lumpy with regular 200-pip drawdowns interspersed with consecutive gains of 50, 90 and 120 pips. Overall, remains worthy of further demoing and we thank Mr Rabea for reading this blog and commenting. BTW i'm listening to "Everything will be all right" from The Killers Hot Fuss and I have to say its wierding me out a bit.

Next up was Zun who was down -182 pips over the demo period with a max drawdown of about -280 pips. I don't think i'll be following Zun going forward because he seems to trade mostly the GBP/JPY and tends to take small profits which in my experience is not a good combination.

Last up was AkhterFX who turned in a disatrous -943 pips. Akhter recommends against using stop-losses on his profile page. He's currently showing -538 pips of open losses, so he's clearly in favor of riding out losses. That might work for him, but it doesn't work for me, so I will not be following Akhter going forward. However we wish him well and we thanks him for reading the blog and commenting.

There's a lot of other cool stuff going on on Zulutrade, so stay tuned for updates. Enjoy your weekend.

Zulutrade demo results - Week 3

Welcome back, Zulu-traders. Here's an update of my various demo accounts after the third full week of demo trading.

Its important to test signal providers in your demo account because 1) You can limit the number of open lots and 2) You can see the affect of stop-loss values. Without these controls, its too easy to be deceived in terms of how well or poorly the provider will do once you put your real money to work. Believe me, i've learned this lesson the hard way.

For my demo trials, I limited each provider to 2 maximum open trades with a stop-loss of 180 pips. The only exception is the TheKillerz which I set to a stop of 300 pips per his advice.

The best performer of the week was Zulutrade provider TrendCatcher who netted 87 pips. In addition, he's come back into profitability and now has earned a total of 85 pips after returning from a 120-pip drawdown. His performance graph for the 3 week period is shown above.

The second best performer for the week was AkhterFx who netted 14 pips on the week. Unfortunately, he's still down -579 pips since the start of the demo period. This was caused by a couple of EUR/USD trades that hit my -180 pip stop back in the last week of September. In his profile page, Akhter recommends that users DO NOT set their own stop-loss value. Signal providers can make statements like this since they don't trade with real money and can tolerate very large drawdowns. But this approach doesn't work for me because I trade with real money and can tolerate only limited drawdown.

Next up was provider Coolie 1997 who lost -104 pips on the week. I felt the pain in my live account on this one. See my blog post Coolie takes a hit for some discussion and reflection on this. As of now, i'm still live with Coolie-san and he has an open long position in EUR/GBP which is showing about a 90-pip loss as well.

Last up was TheKillerz who was down -131 pips on the week. This account had a tremendous run starting-up with almost 2000 pips profit but seems have run into some trouble this past week. One good thing was that he limited his losses to under -150 pips, but that said, his winners didn't add up enough to overcome the losses.

There were a few other interesting development on Zulutrade this past week, but i'm out of gas for now. So stay tuned for future updates and have great week.

Coolie 1997 takes a hit

Welcome back to the Zulu-jungle.

Our favorite Zulutrade provider Coolie 1997 took a bit of a hit this week. After pulling in 96 pips between Monday and Wednesday, I woke up on Thursday to find him short GBP/USD and long EUR/GBP, both essentially short GBP. These trades faded in and out of profitability, but both ended up going into drawdown. Coolie closed out GBP/USD down-168 pips (just short of my 180 pip stop) and as of now is still long EUR/GBP which is showing a -90 pip loss. Perhaps that one will come back next week on some EUR strength or GBP weakness.

Looking at the demo account, he's still up +332 pips for the 3 weeks he's been in demo mode account, less the -90 pip open loss.

More depressing is the fact that I added Coolie to my live account last week. So the GBP/USD loss hit my live account hard sending it once again to fresh lows. Disaster seems to follow me around and as soon as I start blogging about providers, things seem to go bad and they blow up. I haven't given up on Coolie yet. But I ask myself - after 20 straight wins without more that a 100-pip drawdown, what did I expect?

Anyway, Coolie-san has been very forthcoming in his comments to my posts, and here's his recent comments:

"As I wrote before, Zulu is not my real trade. My real position aims profit of swap-point in a long run.The current position component is as follows:Long AUD:98%, NZD:2%Short JPY:69%, USD:31%The oldest pair is AUD/JPY opened in 2002. Accumulated swap-point is 2,940 pips.It is easier for me to predict which currency becomes higher after a year, rather than after one day.That is the reason I am not confident on myself for a short-period trade (that I wrote this too) and I may not be a good signal provider.The purpose of this comment is to tell the readers the fact. Of course I will try to make profits in ZuluTrade as much as possible as I did in the past.Regards,coolie1997"

I believe he's referring to the fact that in some countries you can hold cash position in other currencies directly in your bank account. Its unlike the highly-leveraged CFTC-regulated accounts we have here in the US.

Anyway, I think its worth noting that Coolie-san himself does not have much confidence in his Zulutrade positions. Short-term trading is a tricky business and (as Coolie himself indicates) its much easier to make money with long-term bets than short-terms ones. I find that to be the case in the stock market as well.

But the Zulutrade community seems to have a lot of confidence in Coolie, since he's #4 in terms of total users behind only Lowest DD, The Hunter and Pro-B5. So i'm sticking with him for now and let's hope we have better results to show next week.

Coolie 1997 and Relative Currency Movements

Welcome back, Zulu-fans.

Since Zulutrade provider Coolie 1997 appeared on our blog, we have had a great response from our readers and Coolie-san has been very generous in responses to questions from our readers.

Coolie-san has provided the graph above which shows relative currency movements on the majors on a year-to-date basis.

Our first take-away is that AUD, NZD and CAD are up for the year and GBP, EUR, CHF, JPY and under water. Leading the swan-dive down is USD.

There's no shortage of fundamental reasons for USD's weakness and the US government is almost encouraging that with near-zero interest rates. USD based multi-nationals (KO, MSFT etc) get an earnings boost from a weak USD providing further incentive for a weak USD.

So how does the above graph help us make money?

Coolie-san and most Zulu-providers are essentially day-traders. So long positions in the weak currencies face significant headwinds and are fighting the trend. Coolie-san's tact has been taking long positions in AUD and NZD versus the weaker currencies and this is helping his performance versus Euro-zone based traders.

That said, keep in mind that currency trading is a 3-party affair. The 3 parties are Asia, Europe and Americas. And whatever fundamental move is made in one market tends to get reversed (at least short-term) in the next market upon which the sun shines.

So beware of any breakout, particularly news related. I learned something important from Zulutrade provider Bigwin. That is that he fades (goes against) almost every significant currency move and usually turns a profit within an 8 to 16-hour period.

The point is that any signifcant move will be reversed (short term) by another set of traders who are influenced by another set of fundamental (and earth-based) factors within a 24-hour period. If the move does not get reversed (as expected) then you have the makings of a trend and its time to stop fading the trend and get on board.

Let us know what you think of that. Cheers and thanks for reading.

Zulutrade provider Coolie 1997 responds!

Welcome back Zulu-traders.

If you've been reading this blog lately, its turned into a bit of a love-fest for Coolie1997. Until now he's been a bit of a mystery with no presence on Twitter or elsewhere.

Anyway, he's now surfaced in some comments to my post below "Coolie 1997 rises to the top". We can't be 100% sure its him - but he seems genuine enough

Here are the detail of the exchange:

Anonymous said...
I also like to continue winning for all of you, but it depends on my sixth sense（笑）.

October 11, 2009 7:17 AM
Tcxmon said...
Anonymous-

Okay, I get the reference to your sixth sense and the funky characters.

Coolie - if that's you, drop us another hint or something. The more we know about you, the more confident we are in your abilities. Your record is impressive, but your description doesn't give us much to go on.

Cheers, Tcxmon

October 12, 2009 6:05 PM
Anonymous said...
My Japanese profile says the same thing in detail.
Tonight I will tell you some more things... using an English dictionary.
Please wait till then. Bye now.

October 12, 2009 9:14 PM
Anonymous said...
Coolie is not me. It's my son born in 1997（笑）.

You may not see （笑） right in your screen. It means sort of lol, but not so loud.

Anyway, I am not a professional trader. My real trades are swap-point purposed long-term ones. Zulu trades are not real because I am not confident in my abilities as you are.

My (almost) only strategy at Zulu is to increase real users. For example, if users don't like me to hold two or more positions of the same currency pair at the same time, I will not.

And of course users like such signal providers who make profit constantly. So I'm trying to do that.

My profile of Zulu is basically true. I don't believe that you can forcast future rate by analysing past movement. So I am not interested in technical analysis and don't have knowledge of that. I don't use any systems either.

Then what are grounds for me to buy and sell? Sixth sense is not 100%（笑）.
I'll tell you some more about it tomorrow.

If you have any questions, please ask me. I will answer almost anything.

See you tomorrow. Father19??

October 13, 2009 4:18 AM
-------------------------------------------------------------------------------
An interesting response to be sure. Okay here's what we know:

1) He's from Japan and the funky characters in his profile are Japanese characters not redendering properly in my browser

2) Coolie is his son and he was born in 1997

3) He's agnostic about both fundamental and technical analysis and instead relies on his 'Sixth Sense" for trading.

This last one is both reassuring and scary at the same time.

How can someone without a system make 574 pips with 20 straight winners across 10 different currency pairs with no drawdown more of more than 100 pips?

I don't know and I suppose that's the point. Its pretty hard to out smart the crowd in currency trading competing with the likes of Barclays and Goldman Sachs just to name two.

He might as well be counting tea leaves or duck feathers. In any case, he meets our criteria for a signal provider, so what else do we need know?

Let's face it, trading on Zultrade is a leap of faith and they only thing we have to go on is his record. And unlike the victims of a Ponzi-scheme, we have the stop-loss in place to protect our capital.

In any case, Coolie 1997 is open for questions. So readers, if you have any questions please feel free to leave a comment below and perhaps Coolie will be kind enough to answer. In the meantime, let's hope he keeps up his winning ways.

Zulutrade demo results - week 2

Greetings Zulu-traders.

Zulutrade provider Coolie1997 had another smoking week. He pulled in 162 pips on 6 trades with a maximum drawdown of -62 pips. Since I added him in demo mode 2 weeks ago, he has 12 straight winning trades with a maximum drawdown of -77 pips.

I couldn't take the wait any longer and added Coolie1997 to my live account on Thursday evening with a maximum of 2 open trades with a 180 pip stop. He layed low all day Friday but surfaced just before the close and went into the weekend long NZD/USD at 0.7344. He did the same thing last weekend going long AUD/USD on Friday.

The remaining providers each had positive weeks, but are still underwater since the start of the demo period 2 weeks back.

TrendCatcher gained 72 pips and won on 8 out of 10 trades. He brought his overall performance back for the 2 week period to -2 pips, so he's just about back to even.

AkhterFx pulled in 102 pips for the week with 27 trades. But I realized after the fact that he had many over lapping trades and this wasn't a realistic test. So I went back and set all my demo account at a maximum of 2 concurrent trades which is what I would do with my live account. Even with the boatload of trades, Akhter is still down -593 pips since the start.

Zun pulled in 43 pips on 3 trades and all were all GBP trades made within a 2 hour period on Wednesday 10/7. Zun is down -182 pips since he started the demo period 2 weeks back. He also makes references to a 3-lot position so i'm not sure he's going to work for me since I have a 2 pip-limit.

Finally we heard from Gascan69 that he switched accounts early in the week to a new account called TheKillerz. I was slow is setting up this new account, so I setup the same account that had Gascan with TheKillerz with a maximum of 2 lots and a 300-pip stop which was per his advice. We'll get some good realistic results next weekend.

Looking at his new account TheKillerz is off to a strong start with a 97% win rate and an average win size of just over 50 pips. I ran my stop grid from yesterday's post on a 300 pip stop and found he has to be profitable just over 80% of the time for this strategy to be sustainable.

Based on what we've seen so far this shouldn't be an issue. One reader asked him why he opens so many trades and his response was that he needs to get over the 30 trade threshold before he's visible in the Zultrade system.

His 97% win rate (so far) may be a big deceiving since many of the trades were really just the same trade many times over and wouldn't come out that way with a 2 lot limit. When he was GasCan69, he had about a 79% win rate with an average win of about 94 pips per trade which certainly appears to be sustainable using the table above.

The concurrent position limit of 2 lots could make a huge difference in results. That's one of the most deceiving things about viewing public Zulutrade results. Its difficult to see how they will do with your position parameters until you get them in a demo account.

One final point - The Killers is a great band. If you haven't heard their song Human check it out. Its a bit disco, but not too much for this rock and roll fan. Somewhere in the same rock and roll genre is The Airborne Toxic Event with their hit Sometime around midnight. If you haven't heard that, give it a spin, its powerful and emotional.

See you next time in the land of Zulu.

Zulutrade stops

Welcome back to the land of Zulu.

I was doing some thinking about stop values and wondering if its smart to use a stop value of 180 pips. Where did I came up with this number and is it the right value to use?

After all, stops are mandatory in currency trading because losses are inevitable. You have to have a good way to cut losses when things don't go your way.

One way to look at it is % of your account. $180 is 1.8% of a $10,000 account which seems a bit high. I've read that professional traders risk no more than 0.5% (one half of 1%) of their account on any single trade.

Another way to look at it is percent of the underlying. GBP/USD closed the week at 158.41 which if my math is correct is 15,841 pips in total value. 180 pips is 0.011% (slightly more than 1%) of the underlying. That means it would take just over a 1% move to shake me out.

Would I ever trade stocks on a 1% stop loss value? I'm not a day trader, but I would never consider using a stop that tight when trading stocks. Otherwise you are prey to the market makers and the slightest wiggle will shake you out.

Its even worse in current trading where the FCM's can see your stops. Any stop value less than 100 pips is likely to get hit. I've seen where a pair will trend in one direction, then suddenly have a 30-pip tick in the other direction, and go right back to where it was before. The FCM's will eat you alive on a stop any tighter than 100 pips. This is especially true outside of active market hours.

William O'Neil of Investors Business Daily regularly preaches at 8% hard stop-loss value for stocks. I find that that is too tight for stocks and frequently let positions go 10% or more before cutting my losses. I'm not sure how well that applies to currencies since currencies are unlikely to move 10% in one day like stocks do all the time.

Yet another way to look at it (and probably the smartest) is to look at the Average True Range of the pair.

To find this, bring up http://www.dailyfx.com/charts/. Bring up GBP/USD and go to the daily chart, then add the Average True Range indicator with the lookback of 14 bars. Now select View, Information and you will get the view on the left.

PS - Tried to to this with http://www.bestfreecharts.com and they didn't have enough precision to see beyond 2 decimal places. They are not used to dealing with small numbers you see in currencies.

Anyway, you'll notice (graph all the way at the top) that the range has been declining for the better part of the year. Back in Feb of 2009, the daily range for GBP/USD was over 400 pips. As of now, its about 175 pips. This means that on average, the difference between the high and low is about 175 pips per day.

I'm thinking the stop should be greater than the average daily range, possible between 120% to 150% of the average true range. So for GBP 1.2 times the ATR is just over 200 pips. So with my stop at 180 pips, i'm not too far off the mark.

Finally, the relationship between stops and % wins is a key factor. The table on the left shows, for a 180 pip stop and several AverageWin values, what is the required percent Win Rate rate to do better than breakeven. Good providers on Zulutrade have a better than 80% win rate. So according to the table on the left for an 83% win rate, the average win has to be about 30 pips or you can expect to loose money with a 180-pip stop.

That would explain why i'm not making money using providers like Pro-B5 whose average win is about 12 pips. Contrast that with Coolie 1997 who averages about 26 pips per win and an 86% win rate.

I don't want to disparage Pro-B5, because he's a really stand-up guy, but his trading style is like picking up nickels in front of a steamroller, you'll make some profits for sure, but sooner or later you will get steamrolled. Pro-B5 has made some changes lately and i'll do an update on him soon and review his recent performance.

Anyway, that's enough for now, i'll post results from my demo accounts over the weekend. Enjoy the rest of your Friday.

FreeStockCharts now has Forex!

Welcome back, Zulu-traders.

Don't know how many of you folks are stock traders also, but if you are, you should check out the free, real-time streaming charts in Free Stock Charts from Worden Brothers. I've been a Worden customer since the 1980's and have been a long time user of TeleChart and more recently StockFinder.

Anyway, in the past year, they re-rendered their Stockfinder interface into a Web-based product using Microsoft Silverlight technology. Silverlight delivers PC-like application performance through a Web-browser once you install the Silverlight run-time. Also Wordens have gone to a web-based model where the core product is free (with ads) and subscribers to their Stockfinder or TeleChart get the product without ads.

Some of you might be thinking the last thing you need is another charting program. I currently use E-signal for real-time stock quotes (with charting) and for Forex, I used Powercharts from http://www.dailyfx.com. But I sometimes use Free Stock Charts intra-day so I can just hit the spacebar and rifle through a watch list of the IBD 100 looking for breakouts. End-of-day I use Stockfinder which is more fully-featured but with end-of-day data only.

Now that Free Stock Charts has Forex, I can create a watch list of my favorite currency pairs and rifle through that list with the spacebar looking for interesting patterns. Much better then Powercharts from DailyFX which was a few mouse clicks just to change pairs!

So give it a try - you might get something out of it - and you can't beat the price.

Happy trading.

Bigwin / Forex Bridge resurfaces as iso

Greetings Zulu-fans.

Okay - I can't prove it but I just spotted a provider on Zulutrade called iso that looks suspiciously like Bigwin/Forex Bridge. As you recall, Bigwin disappeared suddenly off the Zulutrade system after a recent wipeout caused by the crash in the GBP.

The reason why I think its the same provider is because the descrption is almost the same as Bigwin. This time he's trading the EUR/JPY which is different from his earlier behavior. But he performance looks equally solid to what I saw with Bigwin, high percentage win rate, with the occasional large drawdown. Also, he appeared on the Zulutrade system on Sept 18th, about a week before he dropped off as Bigwin.

Most users who've given feedback on Bigwin have dismissed him as a provider, but unlike any other provider i've ever used, Bigwin had a postive overall affect on my account. So i'm going be watching shortly and possibly dipping my foot in on the live account side.

Meanwhile Zulutrade provider Coolie 1997 remains on a terrific roll with 8 straight wins bagging 296 pips in my demo account.

Coolie 1997 rises to the top

Greeting Zulu-Traders. A quick word of thanks to our readers for the regular and top-quality comments! Also many thanks to my buddy Townjet over at http://zulutrade-top.blogspot.com/ for his quality blogging.

Anyway, here are the results from demo of 5 providers which started last Sunday. It shows once again the trecherous nature of provider picking. Be sure to scroll down and read the conclusion at the bottom.


Coolie 1997 came out on top with +246 pips with 5 straight winners. His maximum drawdown was -59 pips and only one open lot at a time. Even more convincing is that he traded 5 different pairs without a single overlapping trade! The only negative was that he closed out the week with an open trade -89 pips.

Next up was Trendcatcher who was down -100 pips on 4 small winning trades and one nasty -182 pip loss. These were all GBP/JPY long-side trades which doesn't show the degree of stabilty displayed by Coolie.

Third up was Zun who was down -246 pips on 16 total trades with 12 winners. Zun looked alot like the classic Zulutrade provider, trading only GBP/JPY and taking a lot of small profits and a few large losses. How else can you win on 75% of trades an still come out with a large loss?

Fourth up was AchterFx who was down a nasty -713 pips on 5 EUR/USD long-side trades. He started out with a 14 pip winner, then got into a string of 4 EUR/USD long trades and stuck with them all week before closing them out early Friday.

Last up was GasCan69, down a whopping -749 pips on 12 trades with 4 winners and 8 loosers. GasCan stuck close to the GBP pairs trading only the GBP/JPY and the GBP/USD pairs. He got badly whipsawed by the GBP, selling it, then buying it and selling it again with 8 straight loosers. Its hard to imagine how a user could tolerate 8 straight loosers and lost 20% of the account in only week. After all, it took me almost 10 months to loose 40% of my $10,000 account!

For the record - GasCan69's public record shows he was up ~+970 pips on the week. Based on his comments below, my record was dismal because my stops closed out at some of his loosing positions which later came back to show a profit.

To summarize, the providers as a group lost -1562 pips or an average of -300 pips per provider. And keep in mind these are the cream-of-the-crop in terms of Zultrade providers!

What's the takeaway? Be careful with real money. Use the demo accounts and get to know your providers in detail before committing real funds. Demo accounts are much easier and much less stressful way of watching the fascinating on-line economy which is Zulutrade!

Have a great weekend.