Welcome back to the Zulu-jungle.To your left please find the top 20 Zulutrade providers by Live Trade for trades closed from 12/06/2009 through 12/11/2009.
Wintrade moved up to position #4 and almost quadupled his live trade volume from the prior week.
Build the case made a first-time appearance on the list and has the distinction as the only provider on the list of top 20 who actually trades his own real money!
Let us know if i'm missing any interesting providers or observations here and have a great week of trading.
Bummer about the drawdown Chris, been there, don't want to go there again.
ReplyDeleteI note that LowestDD has recovered from most of his underwater positions (still got a few), and I find that just fascinating. You know, if I had just stuck with him alone, using very small position sizing I would be way further ahead. Hindsight is perfect I guess, but Forex is interesting in that you can have positions for weeks that are underwater, and by-and-by they come back into profit. This is certainly true for 'grid' type currency pairs like EUR/CHF and AUD/NZD because there is a high correlation between the components of the pair. But it also applies to the biggies most of the time, unless there are secular changes in the relationships. The dollar went up against all currencies early this year, and has retraced most of those gains, so holding a position thru the year, while not the best use of funds, is possible if leverage isn't too high.
My point is that stop losses killed me with LowestDD, whereas simply enduring the drawdowns with small positions would have been a big winner. Same with many other providers, such as KillerZ, Cheetah, etc. As Happy (at happytradersfx.com) always hammers home - this game is all about money management / position sizing. My experience with Zulu has finally taught me this critical lesson. If you check Happy's tradelog, you'll be hard pressed to find any losses (there are one or two a month). But he does keep some positions for months, positions that are under water. He calls these 'danglers', but remarkably they usually come back into profit over time. Again, it's because of position size that he can deal with the drawdowns.
We all want to trade one full lot or more on a limited bankroll, and this can indeed work if you are trading one, two or perhaps three lots at any one time, but the Zulu providers, being the forex cowboys they are, force us to really think about money management / position sizing, and also force us to think about stop losses, and whether stop losses are the best way to proceed. I think this exercise has convinced me that tiny position sizes, forgoing the home-run winners, is best. Under this scenario, I believe it possible to profit from the best traders at Zulu, just not too many at a time.
Redford-
ReplyDeleteExcellent comments, and I couldn't agree more. Zulu for me has been 'death by a thousand stops' and agree that position sizing is key to survival in Forex.
Looking back on my post "Lot Loss and Limit results" most of the providers in there had total drawdowns less than 1000 pips. What are the odd's i'm going to handle a 500-pip drawdown with a Mini-size account containing $2000? Unlikely to say the least. With micro-lots, that's only $50 and much easier to handle with a micro account versus a mini-account.
Another thing small lots allow you to do is add to a position as it moves against you without getting blown out. So instead of taking a stop at -180 pips, how about adding one lot for a maximum of 4 or 5 lots? Then once that currency comes back (as it does most of the time) you will still be in the game when it does.
So while I agree that most positions in forex will eventually come back into profit, it can be a long, long time. So I agree that small lot sizes allow you to hang in there longer, you eventually have to take a loss at some point otherwise the leverage is going to eat up your account.
Also, you are correct about the lack of stops. Some EA's i'm looking at don't use stops at all and that last they want to do is broadcast the stop value to the broker.
Again thanks for the great comments,
Chris