Welcome back Zulu-traders and Forex fans.Happy New Year and best wishes for a healthy and prosperous New Year.
Well its been said that the very definition of insanity is when you keep doing the same things over and over expecting a different outcome. In my case, that means Zulutrade which has done nothing but loose me money. So as of January 1, 2010, I'm done with Zulutrade.
When I first saw Zulutrade, I thought - what could be easier? Experienced Forex traders all around the globe competing to rise to the top of the Zulu-food chain. All I had to do is pick a few signal providers, throw them a few dollars and the cash would start rolling in. And its all free. What could be easier?
Well of course it didn't turn out that way and this blog is a chronicle of my money-loosing experience with Zulutrade.
We all know the flaws of the Zulutrade platform, but since I'm winding down, let's go through them here:
1) Signal providers don't have to trade their own real money - its all funny money to them
2) Signal providers have unlimited capital and can keep adding to loosing trades indefinitely. This has made many an equity curve go from the lower left to the upper right - when in reality the actual customer experience is another story
3) Signal providers are compensated by transaction and not by the profitability of their signals.
Zulutrade management is well aware of these flaws and they could easily correct them. But they don't correct them and why? Because the real records of the signal providers would be exposed and they wouldn't look so good. And once the the real records were exposed, they would stop suckering in new money - just like I got suckered in.
Anyway, I don't regret the experience because I've learned some valuable lessons and made some great relationships.
You can follow my further experiences with Forex trading on my new blog over at:
http://fx-mon.blogspot.com/.
I'm also continuing to blog my equity trading at:
http://tcxsystems.blocks.com/
And you can follow my tweets at:
http://twitter.com/tcxmon.
All the best to you and your family for a healthy and prosperous new year!
I wish I could say you were wrong Chris, but you can't argue with the results. :)
ReplyDeleteI lost a whopping $1800 using zulutrade in 2009, the only good thing is I can use that in my taxes.
As time has gone on in using Zulutrade, these last few months have been a depressing reality to the 3 points you mentioned above and a few other points we have posted about in the past. In fact the results have been so hard that I went through an effort to find out my own method. I trust myself and my research more than someone else whom is trading Forex without any risk to themself.
I am not going to bag Zulutrade 'just' yet. I suppose I love pain... There are three aspects to a good method. Larger gains, smaller losses (with stop loss control), and win percentage based on those gains and losses. These three thing require proof in history, and a large history at that. I think some day one or two on Zulutrade maybe will have this.
However logic would say, and I have brought this up before "Why would a person with good profitable method care to put themselves on Zulutrade? They can make a lot of money without the need of Zulutrade platform with thier method, right? They would in fact probably already be weathy from the method, so why would you care to make others wealthy?" Once a good idea to make money, or in our case a working money making method, is exposed it eventually it will no longer work because it gets saturated.
At any rate I will not be putting any real money into Zulutrade signal providers unless there is very strong data of 6 months or more, no multiple open trades, larger gains on the wins, a controlled stop on the losses, and I can calculate the win percentage will work based on those points.
I am guessing that Cheetah's bad trade recently was the final straw. I had a feeling he would eventually fail, too many signs showed he would despite his longer winning streak.
All in all, it was an experience, and I am happy to have met you Chris and like to think you are a interent friend to me. I will follow your new blog.
I will keep you and others up to date every now and then on how I am doing with my new method(I don't think I will be sharing it on Zulutrade). On a good note, FXDD gave me a free $100 promotional bonus with my deposit.
Talk to you later and good luck in your new ventures in Currency market.
JT-
ReplyDeleteThanks, i'm glad to have met you and consider you to be a friend as well.
I agree that a good long history is required to evaluate any trading method. Daniel Fernandez from Fxreviews recommends testing an EA over a 10-year period to get a good feel for its performance.
What sunk me with Zulu was that that the providers would trade a certain way for months, then start to behave differently. I suppose you could argue that 3-4 months is not enough history. You can also argue that I never really understood the providers and their methods enough to understand and be able to handle the drawdowns when they came along.
That led to be latching onto a providers who were on a roll and ride their success for a time, then blow up and follow them into the hole. I could understand this happening once or twice, but it happened with EVERY provider I picked. Maybe my provider selections were poor, who knows.
But one thing I can say is that there were times when providers should have just taken a loss and walked away from the computer for the day. But instead they just came back and kept trading. I blame the structure of Zulutrade for that, because (again) they are compensated based on transactions and not based on performance. Therefore the incentive to avoid losses is greater than the incentive to preserve capital and therein lies the flaw. I didn't think it was a serious enough flaw to make the difference between success and failure, but it I was clearly wrong about that.
Anyway, thnaks for reading and have a great and profitable 2010!
Chris
Good commentary to start the year. I think we need to accept the fact that drilling down to the raw, and at times ugly truth does take time and effort. Finally we've figured out what it takes to win at Zulu. After all this time, I believe that there is only one guy who would interest me and who could make me money without blowing up, and that is Surfer as I explained in an earlier comment in December. I won't go over that ground again.
ReplyDeleteAs for Expert Advisors, well the comment from townjet also applies here, to the effect that why would someone sell a very profitable system when it could be used by the developer. It's evident to me that we should be either trading manually or building our own EA for personal use.
Here's an interesting UK website that has done some serious testing of a few EA's as well as some interesting manual methods. I really like the approach of giving a full and thorough live test and making a conclusion only after that is done. His forum members also provide lots of experience with these methods also.
www.systemsfortraders.com
Redford-
ReplyDeleteThanks for the kind words and quality comment.
Your feedback and comments have been outstanding. I've learned so much from Daniel over at http://fxreviews.blogspot.com, his e-book was really a bargain at $18.
And thanks once again for the tip on systemsfortraders. That looks like a great resource as well and i'll be spending some quality time over there as well.
Thanks again,
Chris
Hi guys... just dropping by before joining live with Zulu. Pretty scary I think. I admit that I interested at signal provider "The Hunter" which I tracked has most follower, less trades, only 1 trade at 1 time, and only 6 minutes average trading time at 39weeks.
ReplyDeleteFor other alternative at fund management, how do u think about Alpari-PAMM here: http://alpari-forex.com/en/pamm/rating/
The manager only can draw investor if they at least live trade 3k usd or 2,5k eur. And the performance provided is quite complete.
How do you think?
Anonymous-
ReplyDeleteI took a look and "The Hunter" looks pretty good. Consistent profits, low drawdowns, no major blow-ups in the equity curve. Looks good from what I can see.
Took a look at the PAMM account and what I want to know is:
- What's the management fee
- How is the manager compensated
- What's the minimum investment and 'lock-up' period.
I clicked on the link for 'FAQ about Pamm' and got an HTTP 404 - link not found.
Chris
I posted this on another Blog site and since I see you are talking about "The Hunter' I posted ithere too. This way you will have a more detail view of the short comings of this provider.
ReplyDeleteThis provider “The Hunter” is nothing more than a News Spike Trader, and all the work you have done trying to see if he is any good was and is just a waste of time. Anyone can clearly look at the trade log and see very clearly that he trades only at Major News release time, and it is impossible to get in (filled) at the price he does because of the delay at these high peak volume times. “The Hunter” has only has trade a total of 67 trades and you can easily tell he is no Tech Trader at all just by look at his other accounts.
This is not enough data for you to have done a proper evaluation of him. That was the point I was trying to make, and trust me I know my job very well.
On Jan 4, 210 for the First Time "The Hunter" went long on a TECH trade on the GBP/USD long at 1.6187, and to prove he is just a News Spike Trader, who would go long into a double top before it broke the Swing High of those same double tops? Anyway today is Jan 6, 2010 and the GBP/USD is trading at 1.5941 which makes "THE HUNTER" have a FLOATING DRAW DOWN of over 241 pips. But of course since Zulu does not update until every 24hrs you are only seeing a 203 pip of losses, but you can do the simple math.
This signal Floating Drawdown has an average size of being 5 times larger than his prior drawdown’s, still think he is a safe trader? That is like as an example “LowestDD” having a Drawdown of over 4,000 pips on just ONE TRADE. This is just so people get a perspective of “The Hunter” hidden danger, take a VERY close look at his other losing system, and user will start to get a “feel” how he handles losses ,
This system “The Hunter” was the system he was protecting and using the others to “Play” with now that he has exposed it to this large drawdown is when the real danger starts.
Since we have seen what he does when his other systems took their first Large Drawdown. This is the point when a traders mind set changes and becomes reckless, and we seen what happen to the other signal provider called “Cheetah” the last 2 weeks of December TOTAL BLOW OUT, I mean 30 open trades at once on the same pair (GBP/USD) against a STRONG UP trend only to reach a total Floating Drawdown of over 6,523 pip in losses in just 3 short days.
Now back to “The Hunter”, this single Floating Lose is just about 27% of his total account size since he only has made a total gain of 842 in the last 39 weeks. The real question is when does he cut the Floating Lose? Just think about it, you are down close to 30% of your TOTAL account balance (842 pips) in just 1 trade and with just 2 days, would you really keep that trade on?
This is why your analysis is a waste of time, it overlooks the obvious and fails to mention the fact that he is not a trader at all, what he does is called Arbitrage trading were he takes advantage of price differences in markets between Zulu’s platform and the link to the FXCM price feed to secure risk free “paper profits” .No amount of analysis will ever replace the one tool traders can use to analyze a trading log. THE TRADERS HABIT. Here comes the best part and the fun part, with a drawdown of over 241 pips as of today Jan 06,2010 when the GBP/USD made a low of 1.5936.
Which as I mention before is just about 27% of his total pips (account total gains). Zulu only shows "The Hunter" with just a 49 pip total draw down.
Anonymous-
ReplyDeleteAgreed all around about the psychology of signal provider, and that their behavior changes based on the number of live followers, etc.
When positions move against them, the last thing they want do is sell, so intead they double down and go into large drawdown and/or wait out the loss. And why shouldn't they, they have unlimited capital?
I agree its a waste of time, and that's why i've decided to bag Zulu and look at EA's instead!
http://fx-mon.blogspot.com/
Cheers,
Chris