Zulutrade news and views with Tcxmon

Zulutrade - Last Post

2010-01-01T05:36:00.001-08:00

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!

MetaTrader - MQL4 programming - Part 3

2009-12-30T12:42:00.000-08:00

Welcome back Forex fans.

Here's my 3rd installment on programming MetaTrader. In case you missed my prior posts, you can find them here MetaTrader programming part 1 and MetaTrader programming part 2.

In this post, we'll take a look at the MarketInfo() function. This function pulls some necessary information from the broker's about the symbol in question. Go ahead and create a new EA file called MarketInfo. Paste the following code above the init() function:

string sSymbol;

Now paste this code into the init() function:

int init()
{
// Grab current symbol
Print("Marketinfo Startup");

// Grab current symbol
sSymbol = Symbol();

// Print it out and finish up
Print("Symbol: ", sSymbol);

return(0);
}

Now setup your Start() function as follows:

int start()
{
double dRetval;

dRetval = MarketInfo(sSymbol,MODE_LOW);
Print("Days high: ", dRetval);

dRetval = MarketInfo(sSymbol,MODE_HIGH);
Print("Day low : ", dRetval);

/* Skip Bid, Ask, Point, Digits, they pre-defined variables */

dRetval = MarketInfo(sSymbol,MODE_SPREAD);
Print("Spread: ", dRetval);

dRetval = MarketInfo(sSymbol,MODE_STOPLEVEL);
Print("Stop Level: ", dRetval);

dRetval = MarketInfo(sSymbol,MODE_LOTSIZE);
Print("Lot Size: ", dRetval);

return(0);
}

/* Skip these
MODE_LOTSIZE 15 Lot size in the base currency.
MODE_TICKVALUE 16 Minimal tick value in the deposit currency.
MODE_TICKSIZE 17 Minimal tick size in the quote currency.
MODE_SWAPLONG 18 Swap of a long position.
MODE_SWAPSHORT 19 Swap of a short position.
MODE_STARTING 20 Trade starting date (usually used for futures).
MODE_EXPIRATION 21 Trade expiration date (usually used for futures).
MODE_TRADEALLOWED 22 Trade is allowed for the symbol.
MODE_MINLOT 23 Minimal permitted lot size.
MODE_LOTSTEP 24 Step for changing lots.
MODE_MAXLOT 25 Maximal permitted lot size.
MODE_SWAPTYPE 26 Swap calculation method. 0 - in points; 1 - in the symbol base currency; 2 - by interest; 3 - in the margin currency.
MODE_PROFITCALCMODE 27 Profit calculation mode. 0 - Forex; 1 - CFD; 2 - Futures.
MODE_MARGINCALCMODE 28 Margin calculation mode. 0 - Forex; 1 - CFD; 2 - Futures; 3 - CFD for indexes.
MODE_MARGININIT 29 Initial margin requirements for 1 lot.
MODE_MARGINMAINTENANCE 30 Margin to maintain open positions calculated for 1 lot.
MODE_MARGINHEDGED 31 Hedged margin calculated for 1 lot.
MODE_MARGINREQUIRED 32 Free margin required to open 1 lot for buying.
MODE_FREEZELEVEL 33 Order freeze level in points. If the execution price lies within the range defined by the freeze level, the order cannot be modified, canceled or closed.
*/

As we can see from the code, the MarketInfo() function allows us to pull the day's high and low when using the MODE_HIGH and MODE_LOW parameters. This could be useful when coding an Expert Advisor. The daily high/low counters reset when the daily interest rate roll occurs which is at 5PM EST.

Calling MarketInfo() with the MODE_SPREAD parameter pulls the current spread for the pair which you can get just as easily by subtracting the Bid from the Ask and dividing by Point.

The MODE_STOPLEVEL parameter returns the number of pips away from the current price at which you are allowed to place the a stop order or take profit order. In the above example, the Stop level value is 4 so if we went long the market at an Ask price of 1.4340, the closest that we could place a take-profit order would be 1.4344. If the current Bid price were 1.4338, the closest we could place a stop-loss order would be 1.4334.

When I first found out about this, I thought was kind of unfair. I suppose it prevents the market maker from constantly getting scalped and ensures that on trades that go against the customer, they make at least the spread plus the stop level. Of course, there's nothing preventing you from entering market orders to close a position within the StopLevel.

The MODE_FREEZELEVEL parameter returns the number of pips away from the current price at which limit orders are "frozen" and cannot be changed. For example, if the FREEZELEVEL were 5 and the current Bid/Ask was 1.4356 x 1.4358 and you had a limit sell order at 1.4360, you would not be allowed to modify or cancel your limit order since it was within 5 pips of the Bid price.

On my terminal FREEZELEVEL came back at zero, so i'm not sure its enforced with FXDD on their Metatrader platform.

Now save and compile the EA and drag it onto a chart of EUR/USD. Now drag it onto a few other charts such as GBP/USD and GBP/JPY to get a feel for the different Spread and Stoplevel values.

That's it, come back later for more MT4 programming.

MetaTrader - MQL4 programming - Part 2

2009-12-29T13:05:00.000-08:00

Welcome back, fans of Zulutrade and automated forex trading.

Let's continue our look at programming Expert Advisors in the MetaTrader platform. At this point, you should know the basics of MetaTrader and how create an apply an Expert Advisor. If you need a refresher, see my prior post MQL Programming Part 1.

Now open up MetaTrader and create a new EA called welcome.mq4 and save it in the Experts folder under your MetaTrader install folder. Then exit MT4, and restart it and you should see your new Expert Advisor called Welcome on the left side under the Expert Advisors folder.

Now open up the Welcome.mq4 folder and add these 2 new variables in the header section before the init() function:

// Total bars on the chart
int nTotalBars;

// Number of bars to look back
int nLookBack = 5;

Now complete the Init() function as follows:

int init() {
datetime dNow;
string sDate;

string sTime;
dNow = TimeCurrent();
sDate = TimeToStr(dNow, TIME_DATE);
sTime = TimeToStr(dNow, TIME_MINUTES);

Print("Initializing Welcome EA");
Print("Server time: ", sDate, " ", sTime);

// Grab total bars
nTotalBars = Bars;
Print("Point: ", Point);
Print("Digits: ", Digits);

return(0);
}

In the Init() function, we grab the server time using the TimeCurrent() function and use TimeToStr() to convert it to its date and time components and print them out. The print output appears on the "Experts" tab and are a convenient way to interact with the user.

We also grab the values of the Bars pre-defined variable which return the total number of bars on the current chart. We also print out the value of Point variable which shows the point size of the current pair. With FXDD and the EUR/USD pair, the Point equals 0.0001. and Digits equals 4.

With that behind us, we know all the real action takes place in the start() function which gets called each time a new tick arrives at the terminal. Let's take a look at now to access price data from inside the Start() function.

Pre-defined variables Bid and Ask return the current market prices for the pair.

Pre-defined variables Time High, Low, Close and Volume return the values of the bars on the chart. Each variable is really an array, and the 0th array value (High[0] for example) shows the High for the current price bar currently being formed. High[1] refers next oldest bar. Close[10] would return the closing bar value 10-bars back from the current bar.

With that, let's code a Start function that prints a message to the Experts tab each time the pair makes a new n-bar high. For the purposes of this example, let's use 5 for the bars to look back.

Now let's code the start() function as follows:

int start()
{
// Use to index into price array
int i = 0;
bool bNewHiLo = false;

// Zero's bar is the bar current in the making
double dAvgPrice0 = (High[0] + Low[0]) / 2.0;

Print("Avg/High[0]/Low[0]", dAvgPrice0, ",", High[0], ",", Low[0]);

double dAvgPriceN;
double dAvgPriceHi = 0.0;
double dAvgPriceLo = 999999999.0;

// Calculate N bar high and low for this bar
for (i=nLookBack; i>0; i--)
{
// Calculate average price for this bar
dAvgPriceN = (High[i] + Low[i]) / 2.0;

// Save new high and lo
if (dAvgPriceN < dAvgPriceLo) dAvgPriceLo = dAvgPriceN;
if (dAvgPriceN > dAvgPriceHi) dAvgPriceHi = dAvgPriceN;

}

if (dAvgPrice0 > dAvgPriceHi) {
Print("New ", nLookBack, " bar high at: ", dAvgPrice0);
bNewHiLo = true;
}

if (dAvgPrice0 < dAvgPriceLo) {
Print("New ", nLookBack, " bar low at: ", dAvgPrice0);
bNewHiLo = true;
}

if (bNewHiLo == false) {
Print("No signal ", nLookBack, "-Bar Hi/Lo/Current: ", dAvgPriceHi, ",",dAvgPriceLo, ",",dAvgPrice0);
}

return(0);
}

There's a lot going on here, so let's go through it one line at a time.

At the top of the start() function, we calculate the average price for the 0th bar - the bar currently in the making. I decided to go with average price for the bar so I don't give any additional credit to the opening or closing price for the bar.

Next, I declare variables dAvgPriceHi and dAvgPriceLo to hold the high and low prices for a given lookback. I initialize dAvgPriceHi to 0.0 and dAvgPriceLo to a high value so that first real price that comes along will get saved as the high or the low.

After that, the for loop is used to step through the price bars starting with 5 bars back and stepping forward until we reach bar 1. I calculate the average price for each bar and compare it with the previously saved high or low. When that loop finishes, dAvgPriceHi has the highest average price for that 5 bars and dAvgPriceLo as the lowest average price for that 5 bars.

Finally, I see if the average price for the currently forming bar (bar 0) is higher than the highest high (or lower than the lowest low) across the lookback period. If so, I print an alert out to the Results tab.

You can probably see where I'm going here. I'm working toward an expert that buys on breakouts of a n-bar high or sells on breakdowns from the n-bar low. I can make the value of N a variable and use the back-testing and optimization feature of Meta-trader to find good values of N for a given tradeable and bar pair.

Now compile the EA and fix any syntax issues. Now drag the EA onto a 1 minute chart of EUR/USD and watch it go to work.

That will form the basis of my first EA which is based on Donchian channels.

Finally, I realize there are limits to including the code itself in the blog. I'll figure out a place where I can publicly post the EA code as its developed and just highlight the interesting parts in the blog.

Zulutrade - Top Providers by Live Trade 12/24/2009

2009-12-28T13:53:00.001-08:00

Welcome back Zulutraders and Forex fans.

To your left, please find the top 20 providers by live trade for trades closed from 12/20/2009 through 12/24/2009.

Overall trade volume was about half the levels of the prior week indicating many traders are taking a break from trading for the rest of the year.

Our favorite Cheetah moved up to the #4 spot from #5 last week. The other 4 traders just swapped positions with Surfing and LowestDD getting bumped out of the top positions and being replaced by sharp forex and smart forex.

Former favorite Bigwin had a big week, raking in a bunch of pips and moving from position #26 the prior week up to #17 last week.

That's all for now, check back later for more updates on automated forex trading.

Zulutrade - Accounts Update 12/24/2009

2009-12-26T08:00:00.001-08:00

Welcome back Zulu-fans. Here's a recap of the week's action.

Things were quiet in the live account. Cheetah picked up 3 pips and that was fine with me. My live account now has just about 380 pips left, so we'll see if Cheetah can pull it back from the brink. On the demo accounts side...

Blinov was looking sharp and picked up 105 pips with 6 straight winners with only a 64-pip draw down. Blinov has now picked up 330 pips on 17-straight winners since adding him on a demo account back less than 2 weeks ago. He has about -394 pips in open losses, so we may have just been lucky not getting stopped out.

Next up is Missforex who picked up 48 pips on 4 straight winners. He is up 392 pips since the beginning of the demo period only 2 weeks back with 10 straight winners. Unlike Blinov, Missforex has no open positions.

Ferrari was down 14 pips on the week in quiet action.

Hayate had exactly one trade and hit my 180 pip stop. Ouch.

kingtrade didn't trade last week and has only traded 4 times in the month of December. Zulutrade shows he has in the neighborhood of 70 live followers, just waiting for him to spring a trade.

280pips.com is down -44 pips on the week, but I can't blame the provider since I had him reversed.

Student picked up 12 pips, but now has 6 open EUR/USD positions in the red. This is uncharacteristic of him, since he usually takes his losses. At this point is is painting the tape to keep his performance graph on an upward trajectory.

That's all for check back for more updates on Zulutrade, Metatrader, and automated Forex trading.

MetaTrader - MQL4 programming - Part 1

2009-12-25T09:39:00.000-08:00

Welcome back Zulu-traders and fans of the Forex.

Here's wishing you a Merry Christmas and all the best for a healthy and prosperous New Year!

Let's take a look at programming in MQL4 - the language of MetaTrader 4. Even if you don't plan to write your own Expert Advisers, its good to understand how they work. So how do you go about learning MQL4? You read the book, of course, which is found here.

I got through about half of the book and the author spends a lot of time on programming basics. If you've ever done any programming, the language looks pretty familiar and is probably closest to the C language. I'm not going to attempt to teach you programming here, so I'll just extract the most important concepts to get you started.

Anyway, there are 3 basic things you can program and execute inside the MetaTrader platform. To execute one of these items, simply drag it from the navigator on the left and drop it onto a price chart. Here are the 3 things you can program:

1) Expert Advisor (EA) - An MQL4 program used for automated execution of trading strategies. The EA is called automatically by the MQL platform at every "tick" or change in price from the quote server.

Only one EA can be attached to a given chart, but you can apply multiple EA's to a given currency pair by opening multiple windows for that pair and dragging a different EA onto each window. It's typically advisable to run only one EA on a given account at a time, otherwise it becomes too much to keep track of.

Most MT4 users address this issue by installing MetaTrader into different folders (you get prompted for the folder at install time) and running multiple instances of MT4 on your computer. This would allow you to run 3 different EA's against 3 different demo accounts all at the same time.

Expert files get placed into the Experts folder under the folder where you installed MetaTrader.

2) Script - An MQL4 program to automate a series of operations involving price or trading. Scripts are allowed to call trading functions. A good use for a script would be to close all open trades. Scripts are executed only once on the chart at the time it script is dragged onto the chart.
Script files get places into the Scripts folder under the folder where you installed MetaTrader

3) Custom indicator - An MQL4 program to calculate technical indicators on the current price chart. Custom indicators calculate values to be drawn on the price chart (such as a moving average) or in a separate windows such as an oscillator. Indicator scripts are called automatically by the MT4 platform at each tick. Trading functions cannot be called from inside indicators. Multiple indicators can be applied to a chart at a given time which distinguishes them from EA's and Scripts.

Script files get placed into the Scripts folder under the folder where you installed MetaTrader

Each of the above types of program contain 3 pre-defined functions:

init() - called only once when the Indicator, Script or EA first starts. This is a good place to do any first time operations in your programs.

deinit() - called only once when the Indicator, Script or EA ends. This is a good place for clean up operations.

start() - called each time a new tick arrives at the platform for both EA's and Indicators. This is where most of the action is. I believe start() is called only once for scripts.

Now that we have that behind us, let's write our first program in MQL4.

From inside the platform, click on 'Custom Indicators' on the left side and press the Insert key.
At the wizard which appears, select 'Custom Indicator' and click Next.
For the name, call it first.
Complete the rest of the screen with your name, copyright and blog if you have one and click Next.
Leave the following screen unchanged and click next.

Once the program appears on the screen, setup the init function as follows:

int init()
{
Alert("Hello MetaTrader");
return(0);
}

Alert() is a simple function that pops up a message on the screen.

Once you are done coding, click the Compile icon at the top and fix any syntax errors which appear. Once the compile is clean, select File, Exit and notice that the file will be saved in your indicators folder.

Now exit the MetaEditor window and return the MT4 platform window. Now select File, Exit to exit Metatrader.

Now start MetaTrader again and your new indicator (called first) should appear under the Indicators folder now. Now simply drag the new indicator onto a price chart and you should see the alert.

Congratulations, you just wrote your first MetaTrader program!

That's enough for now, check back later for Part 2.

MetaTrader - Intro to back testing

2009-12-23T13:46:00.000-08:00

Welcome back Zulu-traders and forex fans.

Let's take a look at backtesting with the MetaTrader 4 platform.

Backtesting is the first step in evaluating an Expert Advisor. After all, if the robot doesn't make any money in backtesting over a one year period (for example), why consider it any further? More important, backtesting allows you to get a realistic idea of the amount of drawdown to expect.

To learn the basics, check out this 3-part video series YouTube Backtesting Videos.

Disregard the part about downloading data from the Alpari Website. You can pull down updated data inside the MT4 platform by going to Tools, History Center, double-click your pair, select your timeframe and click download.

The Expert Advisor evaluated here is called Framework and can be downloaded for free by clicking on the link. This EA uses crossovers in the Commodity Channel Index (CCI) which is an oscillator whose values typically range between -100 and +100. This system uses 3 separate CCI values with parameters of 5, 25 and 125 representing short, medium and long term values of the CCI indicator.

The trading logic is relatively simple. Take a long positon when the medium CCI is below the zero line and when the short and long term CCI's are both above zero. Take a short position when the medium CCI is above the zero line and when the short and long term CCI's are both below zero. The system uses a take proft of 255 pips and uses no stop loss.

While there is no stop loss, the system will close out all open positions and start to trade in the other direction once it gets a signal opposite any open trades. The system also pyramids (adds to) positions in the current direction as long as trades are open once a certain number of bars have elapsed.

The results from testing were pretty impressive across multiple pairs when tested on a daily timeframe from 1/1/2009 through today. Here are ending, high and low values on a $10,000 account over the test period:

Pair, High, Low, Ending
USD/JPY - $14,962, $8324, $10,606 (big drawdown from the high)
EUR/USD - $12,252, $10,244, $12,252 (all winners)
GBP/USD - $10,705, $8947, $8947 (ended at the low)
GBP/JPY - $14039, $8888, $11865 (stomach churning)

Overall drawdowns from the entry were contained to under 20% from the initial deposit. But there were some roller-coaster changes in account equity for example with USD/JPY going as high as almost $15,000, then drawing down to under $9,000 to end up at $10,606.

In summary, this robot isn't for me but is an interesting learning experience. The drawdowns can be large and (unlike Zulutrade History), all open positions are closed out at the end of the test period, sometimes ending in a sudden closing loss such as the GBP/USD example above. This trades might eventually work out, but I would rather know the closing equity than leave open trades off the grid - like Zulutrade does in their test results.

Also, there are issues with the quality of the test results as shown by the modelling quality metric on the results tab. There are many issues to consider when testing robots, and i've learned alot from this exercise. I've also started to work through Daniel Hernandez's e-book from http://fxreviews.blogspot.com/.

Long story short (and confirmed from Daniel's e-book) if you think MetaTrader expert advisors are an easy path to riches, think again! Enjoy some time off and check back later.

Zulutrade - Top Providers by Live Trade 12/18/2009

2009-12-21T06:57:00.001-08:00

Welcome back Zulutraders and a happy winter solstice to all!

Those of us in North America still have a few nasty months of winter ahead, but summer is now officially on the way!

To your left please find the top 20 Zulutrade providers by Live Trade for trades closed from 12/13/2009 through 12/28/2009.

Our favorite Cheetah dropped to #6 on the week down from the #4 position last week.

Sharpforex moved up to the #3 position from #14 last week. This provider, along with Build the Case are the only providers on the list who are trading their own money on Zulutrade.

Finally kingtrade moved onto the list for the first time since i've been posting the list. We picked up kingtrade as a demo provider since he was recommended by reader Rossco and reviewed in my post Review of Rossco's picks. This provider has an awesome record with only one loss (-2 pips) out of 263 trades since appearing on the Zulutrade system back in August 2009.

Good trading and have a great week.

Zulutrade - Demo Accounts Update

2009-12-19T09:43:00.000-08:00

Welcome back Zulu-traders. Here's weekly recap of demo accounts I'm following.

Most of the providers came from my query Consecutive Trades with Low Drawdown posted back on 12/8/2009.

Missforex was the screaming winner on the week who picked up 347 pips in 6 straight winners. The last 2 trades came very close to souring and got as far as -172 pips into drawdown before coming all the way back. If this were real trades, there is a good chance those -180 pip stops would have gotten hit.

Next up is Blinov who picked up 225 pips on 11 straight winners with a maximum drawdown of -35 pips. Blinov appears to have one live follower who has gained 239 pips.

Next up is kingtrade who picked up 32 pips on the week and has now made only 4 trades in the month of December. But they were all winners and he's up 97 pips so far.

Next up is Ferrari who picked up 26 pips on the week. At one point, he was up 81 pips but got knocked down by a -56 pip loss. Ferrari has the distinction of trading his own money on Zulutrade which is rare.

Next up is 280pips.com who lost -108 pips on the week. His performance was case of cutting the winners and letting the losers run. I'm toying with the idea of reversing some providers and this provider could be a candidate for that strategy.

Last up is Hayate who picked up 82 pips with 6 straight winners, then gave it all back and then some with a 186 pip loss.

Finally I would like to that all of my readers who come back to this blog often and visit the sponsor links. My Zulutrade experience has been discouraging to say the least, but your comments and feedback have lessened the pain and turned it into a learning experience.

Also, we have had some really excellent comments from Townjet (JT) Redford and Dazzer just to name a few. The last few comments by Redford alone have summarized many months and years of experience in a few paragraphs, and we really appreciate it.

Zulutrade - Live account update

2009-12-18T10:09:00.000-08:00

Welcome back Zulu-traders.

It was another bruising week in my live account and my live account is now nearly wiped out.

The week started out on a bright note (and I breathed a sign of relief) when I saw the bulk of my remaining funds were successfully withdrawn leaving just over $500 or 500 pips remaining. I'm still waiting to receive the check, but I'm not too concerned about that since I've withdrawn money successfully from FXCM in the past.

Before I get too negative, there was some good news. Cheetah had a decent week and picked up 35 pips on 4 straight winners with a max drawdown of -18 pips. Cheetah was back in his old form (after a rough week last week) and was carefully picking trades with low drawdown. Cheetah is now the only live provider remaining in my account.

Now back to TheKillerz who had another rough week. I had a feeling his trading would continue to be rocky, so I was quick to hedge or second-guess his trades. He was inactive until noon EST on Monday and it was looking like he was taking the week off. He then went short EUR/USD and I hedged that trade quickly. TheKillerz closed that trade with a -67 pip loss, and I was able to take a 13-pip profit on that hedge. On Tuesday, TheKillerz went long GBP/USD and I closed that trade out with a -25 pip loss and he ended up taking a 30-pip profit.

I then took the controversial step of reversing TheKillerz signals for Thursday. He came in and bought GBP/USD and Zulu did the opposite and sold. I also hedged this trade and ended up taking a 3-pip profit on my hedge and a 25-pip loss on my reversed signal. At that point, I decided second-guessing the provider was a bad idea and removed the reverse.

Well Friday came along and I woke up in the hole -50 pips. That trade continued to go the wrong way and TheKillerz ended up taking a nasty -126 pips loss on that trade. Had I kept my reverse in place, I probably could have closed the week in the green. But it shows the slippery slope of trying to second-guess your provider.

So this drubbing puts me close to out of the Zulutrade game. I still have a few hundred pips left and Cheetah on the live account, so let's see where that takes us.

Finally, some of my demo providers had good weeks. But it shows the difficulty of the Zulutrade game - if a user has an excellent record in the demo account, how do we know that performance will carry over to the live account? In almost every case Ive seen, the provider works for some period of time, then goes into drawdown and wipes out whatever gains they made and then some.

I can't get over the feeling that the behavior of the providers is influenced by the number of live followers they have. That's may be tough to prove -but it does show a fundamental flaw in the Zulutrade model - that providers are compensated by transaction and not on the profitability of their own subscribers.

That's enough pain for now, check back later for updates on my journey to profitability in the forex markets.

Intro to MetaTrader 4

2009-12-16T06:12:00.000-08:00

Welcome back Zulutraders and Forex fans.

Its no secret that the MetaTrader platform is taking the forex world by storm. Even forex giant FXCM caved recently and started offering their own customized version of MetaTrader. And a growing number of Zulutrade providers are now using MT4, even if just to trade their signals manually.

Meta-trader is definitely the future of Forex trading and here's why:

Contains full-featured charting and free real-time data provided by the broker
Open demo accounts of any size with the click of a button
Integrated reporting, news, Alerts, Broker mailbox and best of all ..
Integrated automated trading through "Expert Advisors" - computer programs that trade your account 24x5, around the clock, tick-by-tick without you having to watch every hour of the day and night.

This last one is huge because (due to the 24 hour nature of forex) you can only be up and paying attention to the markets at best half of the trading day before you have to spend some time with the family or go to bed. Plus with features like automated trailing stops, you can have the technology edge you need to make money in this ultra-competitive arena.

Also, there's a growing industry of expert advisor programs competing for your trading dollar. Most of them have a one-time upfront charge for unlimited ongoing usage. Its become a war of technology between the EA developers and in some cases the Forex brokers themselves who stand to loose money when a really good robot stats chipping away at their dealing desk.

Realizing that this information is old news to some of you, this post is to get the rest of you folks up to speed. For those of you not already running MetaTrader, do this.

To Do List
1) Download MetaTrader from your favorite broker. Here are a few links to get you started:

FXCM UK-based MT4 page
FXDD MT4 page
Forex.com MT4 page
Alpari UK MT4 page

2) Get familiar with the major parts of the platform, charting, order entry, etc.

There are some excellent videos on Youtube to walk you though at:

Metatrader videos

Take your time to get to know the platform, there's a lot to it.

3) Learn how to setup Expert Advisors by going through the above videos.

4) Finally download some EA's and play around with them in demo accounts.

To find some free EA's, go to Google and search for "free expert advisor download"

Eventually, I would like to program my own Expert Advisors, and i'm now heading in this direction.

Also, if any of you have been using a particular EA and having some success, please share that with us and we'll demo them along with you.

Okay, get busy and check back later for updates and good trading,

Tcxmon

Zulutrade - Top Providers by Live Trade - 12/11/2009

2009-12-14T06:39:00.001-08:00

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.

Zulutrade - Demo accounts review

2009-12-12T08:22:00.001-08:00

Greetings Zulu-watchers.

Here's a review of open demo accounts.

On top (and expiring today) is TheKillerz who lead the pack of all the demo providers, up +400 pips. In fact, he was the only provider to show a much of a profit during the demo period.

TheKillerz was up over 800 pips at one point, but went into a nasty drawdown with a series of loosing trades. Even so, he had an incredible run with 28 consecutive winners trades, picking up 685 pips in a 3-week period. But all runs come to an end and this one did in spectacular fashion. All eyes will be on the TheKillerz next week to see if he can bring my and JT's accounts back from the brink.

Next up is EliteCapital who is down -8 pips since the beginning of the demo period. He hit my -180 pip stop 4 times during the demo period and he had a good number of winners, but they were relatively small in size and not enough to make up for the stops hit.

It was a similar story with PraetorianGuard who was down -100 pips on the demo period and hit my stop 3 few times during the demo period.

Next up is Coolie1997 who is down -76 pips since the beginning of the demo period. Coolie hasn't traded in the month of December and is either on hiatus or taking the holiday period off.

Next up is king trade who didn't trade at all last week and remains up 64 pips since the start of the demo period making only 2 trades.

Last up is Student who lost 23 pips over 4 trades since being added last week. At least he can cut his losers.

Check back later for some new demos and enjoy the rest of your weekend.

Zulutrade - Live account shredded

2009-12-11T11:34:00.000-08:00

Welcome back Zulu-traders.

I was hoping to have a better update for you this week, but it didn't work out that way. This week my live account was crushed.

Before you read any further - don't invest any funds with Zulutrade that you aren't prepared to loose. Zulutrade looks like such a great concept from the outside, but from the inside I can tell you that all its done for me is loose money.

I sent a funds withdrawl form over to FXCM for the remaining funds in my account except for about $500 or about 500 pips. So i'm giving Cheetah and TheKillerz one lot each and one more shot to keep me in the Zulutrade game, and then i'm done with real money. I might keep blogging about Zulutrade though since I find it to be pretty interesting. Better yet - I should find some other way to make money with Forex that actually works (like Metatrader 4 Expert Advisor's perhaps) and blog about that.

First, let's review the week's action.

It all started out well on Monday when TheKillerz came in and picked up about 110 pips in less than an hour on 2 GBP/USD sell trades. Tuesday also went well for TheKillerz when he picked up a quick 45 pips on a pair of GBP/USD sells. I was feeling good and confidence was high as they say in civil defense.

Meanwhile Cheetah got into some trouble on Tuesday just before I was about to post Consecutive Trades with Low Drawdown - which showed that Cheetah had over 400 consecutive trades with less than a 100-pip drawdown. Well he made a liar out of me and hit my 120-pip stop on a GBP/USD buy that went the wrong way.

I ended up sticking with Cheetah and he recovered from his drawdown and ended up picking up 27 pips on the week. Altogether, he's added about 33 pips to my account total since adding him back on 11/30/2009 which is not much considering the drawdown.

Things got rough for TheKillerz on Wednesday when he had a pair of GBP/USD sell trades that he stopped out down -120 pips each. Just after that, he came back and went the other way and bought GBP/USD. These trades went almost 100-pips in his favor, but he rode them back down and closed them for +7 and +8 pips which i'm glad he did because I was about to do it myself.

This time he turned around and sold GBP/USD again and this time picked up 71 and 74 pips, making back the better part of the -120 pips losses earlier in the day. Overall Wednesday turned out okay and he was only down slightly on the week at that point.

Thursday, things really got ugly for TheKillerz. First he sold GBP/USD and took a pair of 100-pips losses. Looking to recover his losses, he went long a pair of GBP/USD. I didn't like the looks of this trade, but stuck with it anyway, and rode this pair down for another pair of 100-pip losses.

Not content with loosing 400 pips in one day, he came back and went short GBP/USD again, not far from where he went short earlier in the day. By this time I had had enough for one day and didn't like the looks of this trade either. So I closed the first one at scratch and hedged the second one by going long GBP/USD. This turned out to be a good move because TheKillerz ended up closing this last trade down -76 pips and I took a 49 pip profit on my hedge.

So overall, TheKillerz lost me over -423 pips on the week and it would have been over -500 had I not stepped in to limit the damage. So his overall affect on my account went from +100 pips to -320 pips in a matter of one day.

I understand loosing trades, and when things don't go your way sometimes you just have to turn off the computer, walk away and live to trade another day. But when you keep coming back for more when your obviously getting whipsawed is not good trading. If you walk away when you are up +100 pips on the day, why not walk away when you are down -200 or even -400?

It helped a bit that I had Cheetah in the mix because there were a few times in the week when Cheetah and TheKillerz traded against each other, one long GBP/USD and the other short. As I mentioned in a comment, I like these 'Delta Neutral' trades because there's a pretty good chance both trades will be closed out at a profit.

That's enough pain and suffering for now, check back later and enjoy your weekend.

Zulutrade - Comment on comments

2009-12-09T12:01:00.000-08:00

Welcome back Zulu-fans.

Thanks for all the great comments to yesterday's post Consecutive Trades with Low Drawdown.

Rather than adding on more comments, I thought I would just put in a quick post to reply to everyone's comments I haven't gotten to already. I already replied to Redford and townjet, thanks for the comments guys.

Setec - I haven't made any further progress on brokers that handle micro account with Zulutrade. Best of luck with yours and let us know how you make out.

Regarding the request for analysis on intra-trade drawdown - the original query in yesterday's post is based on providers that have a large number of consecutive trades with drawdowns less than 100 pips. In other words, the table shows the top 20 providers with the highest number of consecutive trades with drawdowns less than 100 pips (before Cheetah's blowup anyway).

Even with low intra-trade drawdown, you still have to consider the total drawdown you would experience with the provider when you run them with a given number of stops and lots. For example, if you were doing 2 lots with a 120 pip stop, and the user had 6 straight trades with -80 pip losses, that would be -480 pips of drawdown and you have to consider that. Let me know if you guys want to see a different type of query and and i'll consider running that.

Setec- Thanks for the data regarding the intra trade drawdown. I think what you are saying here is that The Hunter is a good provider because is average low (-7) is higher than the average low of TheKillerz (-52).

I tried that type of analysis Profit to Drawdown back in October and a later post where I picked some demo providers based on that Profit to Drawdown Provider Analysis. In fact, I found Student based on that analysis. As it turns out, I think that analysis was flawed because it was based on pips alone, and not based on number of lots opened. If I had to do it again, I would normalize it on a one-lot basis.

Dino - Right you are - Cheetah hit a -120 pip stop on Monday, and TheKillerz closed out 2 trades at -120 pips today. At one point, TheKillers was short 2 lots of GBP/USD and Cheetah was long one lot of GBP/USD at the same time. I actually like this situation because it lowers your overall risk, and if you can stomach the drawdown, its a pretty good chance you will make money on both trades.

Dazzer - Thanks for the kind words. I think you are smart to be slow to commit real funds to Zulutrade. I've lost a lot of money with Zulutrade and I think its a common newbie mistake with Forex to rush into any trading with real funds before you understand what you are getting into. I know because I've done it myself. The saying that comes to mind is:

"Good judgment comes from experience, and experience comes from bad judgement".

Thanks for the tip on Ferrari he looks like a winner - and trading with real money. What a concept!

Check back later for some new demo accounts.

Zulutrade - Consecutive Trades with Low Drawdown

2009-12-08T08:17:00.000-08:00

Welcome back Zulu-traders. Well I promised a juicy query and here it is.

To your left, please find the top-20 providers in the Zulutrade database for maximum number of consecutive trades without a 100-pip drawdown. This requires some explanation, so bear with me.

The Provider and Id columns are pretty self-explanatory.

The Trades column is the number of consecutive trades without an intra-trade drawdown exceeding 100 pips.

The TotalPips column is the total profit for that provider when run through my 2-lot, 180-pip filter. I should point out that the stop might as well be 100 for this query since these providers are so good at keeping losses less than 100 pips.

The MaxDD column is the maximum drawdown when using that provider when run through my 2-lot, 180-pip stop filter. Note that this figure is for a closed-trade basis and this represents the total amount you would have lost from the highest high to lowest low when trading that provider with my 2-lot, 180-pip filter.

Finally, the profit factor represents the amount of profit earned as percentage of drawdown encountered. The higher this number the better. Also, note that a few of the providers have 100% wins, therefore the profit factor is undefined since there are no losses.

You can do your own diligence on these providers. But I have my picks, so check back later for my own providers to test in demo accounts.

Zulutrade - Top Providers by Live Trade - 12/4/2009

2009-12-07T05:41:00.001-08:00

Welcome back to the steamy Zulu jungle.

To your left please find the top 20 Zulutrade providers by Live Trade for trades closed from 11/29/2009 through 12/04/2009.

Cheetah moved up to the #1 position on the list, from #2 last week.

Our other favorite TheKillerz moved up to #22 on the list (not shown on the left) from #55 the prior week.

I took a at 3A, Digital-Pip-Bot, and 303pips, but they all generate a bit too much drawdown for my taste. Let me know if I'm overlooking any good providers here.

I made some good progress on the 'Providers with consecutive trades with drawdowns less than 100-pips" query. But it needs some more work before I'm ready to post. So check back later for that and have a great day.

Zulutrade - Live Account update - 12/04/2009

2009-12-05T15:17:00.000-08:00

Welcome back Zulu-fans.

Here's a quick update on my live account. This past week I was up +109 pips total, bringing my account back from the brink after some recent drawdown.

Cheetah picked up 6 pips on the week on a single mini-lot. He started the week with a pair of losses going into drawdown -35 pips. He then climbed out with 4 consecutive winners and got his performance back to even on the week. This performance is pretty flat for a mini account, and he's trading more like I would rather have a single, full-sized 100K lot. It doesn't look like this provider is going to make much in the way of weekly pips, but he does avoid much drawdown which is a key strength.

TheKillerz had a strong week, up +103 pips on a single mini (10K) lot. Our Egyptian friend was kind enough to comment on yesterdays post Demo accounts update so take a look if you missed that. We are considering allocating another mini-lot, but this will be a game-time decision, so check back before Sunday's open.

Meanwhile, my Zulumon MS-Access database is now freshly loaded up with last week's results and how has over 460,000 trade records across 1,300 providers. We have some interesting ideas about new queries to check mid-day Sunday for an update.

Cheers and all the best,

Tcxmon

Zulutrade - Demo accounts update - 12/4/2009

2009-12-03T19:24:00.000-08:00

Welcome back to Zulu-burbia.

Well I've recovered from my iPhone envy enough to get together a recap of demo accounts. I skipped demo accounts review last week, so our hard-working providers are overdue for an update.

First up is TheKillerz who has been utterly sublime since adding him as a demo back on 11/13/2009. Since then he had 28 straight winning trades and picked up 685 pips. His streak was broken this past Tuesday when he took a pair of 45 pips losses on a long EUR/USD position. He recovered later in the week and is now up +722 pips in just under 3 weeks. And that's on a 2-lot position limit with a 140 pip stop which he didn't come anywhere close to hitting!

The other day I was joking with JT over at http://zulutrade-top.blogspot.com/ about how I didn't want to start gushing about how awesome TheKillerz has been lately because as soon as I do so, providers seem to blow up. At least that's what happened with Pro-B5 and Coolie 1997. Anyway, Mr Rabea is on a roll and let's all hope he keeps it up.

Next up is EliteCapital who is up +122 pips since adding him back on 11/19/2009. His performance has been a bit of a zig-zag and he's hit my 180-pip stop 3 times in the 2 week period since he's had an open demo. He went into drawdown on a pair of USD/JPY trades last week on the Dubai news last Thanksgiving Thursday. At that point, he was down -307 pips and thinks were looking pretty bleak. But he came screaming back with a single AUD/JPY trade where he picked up +402 pips on that trade alone.

Next up is PraetorianGuard who is up +33 pips in the 3-week demo period. He performance has been pretty similar to EliteCapital which is not surprising since they are the same provider. I would describe the performance as "lumpy" and he has also hit my stop a few times since the start of the demo period. Overall, I like this provider, but I'm thinking for my account size and risk parameters, a micro account with 5-lots max and a 250-pip stop might get better results.

There's most definitely a "sweet spot" in terms of lot sizes and stop losses such that taking the same amount of capital it would take to buy 1-10K lot would be split into 10 1K mini lots which can be allocated to the provider. In fact, looking back on drawdown analysis from Lot Limit and Stop loss , most good providers came in less than 1000 pips of drawdown. So it starts to look like .. open an account, and deposit $1000. Allocate 1 signal provider to that account and give him 10-micro lots max with a 200-pip stop per position. That's it, either boom or bust. If your not willing to allocate $1000 (1000 pips) to a provider, your probably going to panic out before the provider is able to trade his way back out of a drawdown. But I digress.

Next up is Coolie 1997 who is now -76 pips down on the demo period. His long NZD/USD and AUD/NZD positions both hit my 180-pip stops which took is performance into the red. On the public side, Coolie is still with those trades as well as a pair some other trades. Also on the public side, he recently took a 500-pip (system default) stop on a long GBP/JPY position. Another reason the avoid the GBP/JPY, it rips your account to pieces and a 180-pip stop just isn't enough as we saw with EliteCapital and PrateorianGuard.

Recent addition king trade made no trades this past week which was a bit of a disappointment. By the looks of his live followers, he's got a lot of new users who have made 0 pips with him who are just waiting for him to spring a trade.

I meant to follow Student but I spaced out and missed a week of demo. I'll have an update for him next week.

We're going to take a look at Zulu's recent additions from a Web-scraping perspective and see if we can extract the live follower data for each provider. If we can do that that might lead to some interesting queries and allow us to see how much deviation there is from Zulu's public "Followers" versus "Live followers." Check back later for that.

That's it, enjoy the rest of your Friday and the weekend.

Zulutrade - iPhone App available

2009-12-02T09:58:00.000-08:00

Hey Zulu-Traders.

Looks like Zulu has a iPhone app available now. Since i've been a Blackberry user all along, this is could generate an extreme case of iPhone envy.

I've tried to view the Zulutrade site through my Blackberry bold, and its a pretty lousy user experience. I don't think its worth the money to upgrade, but I would sure like to see it. If anybody out there has an iPhone, give it try and let us know what you think.

Cheers and good trading.

Zulutrade - More awesome new features!

2009-12-01T10:12:00.001-08:00

Welcome back Zulu-fans!

Well I have to hand it to the programmers over at Zulutrade for some new features they quietly slipped in in the last day or 2. These are great features and definitely worth a look.

First up, click on the Performance tab and click "Show Advanced Filters". There's a new checkbox to filter on traders that are trading their own money. Clicking this box shows a total of 55 traders trading their own funds versus over 2,600 active providers on the system. Right at the top of the list in terms of number of followers is Got Pips?

This filter by itself is incredibly useful. Its interesting to note, however that of the top 20 traders on the Zulu system by Live trade listed here Top providers by Live Trade, none of them trade their own money. It was interesting to see Trendcatcher on the list since we've often remarked that he trades like its his own real money.

Next up, click the provider history page for TheKillerz and note the little flag indicating his country of origin. Now scroll down and click on the new "Live Followers" tab.

Now you can see the live accounts that are following that provider, and how each of them has done in terms of total pips earned with that provider.

Take a look and you can see me in there "FXCM 16010xx" and that I earned 271 pips following TheKillerz. You can also see FXCM11xx from Germany who is following a whole bunch of recent favorites from Coolie1997, Bigwin, Cheetah, EliteCapital, King Trade and TheKillerz as well as Surfing which i've never really considered following.

This last feature seems like a bit of an invasion of privacy - kind of like your stock broker disclosing your account positions to their other customers. But its all anonymous enough, so I overall I like it. It provides a whole new way of fishing for promising providers.

Let us know your comments, useful feature or invasion of privacy?

Its you chance to speak out, Zulu-fans. Check back later for comments.

Zulutrade - Top Providers by Live Trade - 11/27/2009

2009-11-30T04:58:00.000-08:00

Welcome back Zulu-traders.

To your left please find the top 20 Zulutrade providers by Live Trade for trades closed from 11/22/2009 through 11/27/2009.

Most of the names look familiar, but there a few standouts.

First is 3A who made a first-time appearance on the top-20 list. He also appeared on my post Lot-Limit and Stop-Loss results with a relatively high profit factor of 5.4. That means that his closed profits are 5 times greater than his drawdown on a closed-trade basis.

Anyway, I took a look at 3A and he appears to only trade the GBP/JPY which is a non-starter for me. GBP/JPY is too volatile for my taste versus say GBP/USD or EUR/USD. I've heard stories that some professional forex traders trade nothing but GBP/USD because it has good daily pip range trending behavior, etc. TheKillerz and Bigwin trade mostly GBP/USD.

Another standout is king trade who is also making a first-time appearance on the list. We added king trade as a new demo this weekend after yesterday's post Review of Rossco's picks. So we will be watching this provider in this week's action along with our other demos.

I still think there are couple of good candidates for new demos from my post Lot-Limit and Stop-Loss results, but I haven't had the energy to go back and go through them. Please take a look yourself and let me know any suggestions.

Use the providerid from the table to navigate directly to the performance page for each provider:

https://www.zulutrade.com/TradeHistoryIndividual.aspx?pid=

That's all for now, good luck and good trading.

Zulutrade - Review of Rossco's Picks

2009-11-28T06:24:00.000-08:00

Welcome back Zulu-fans.

Reader Rossco was kind enough to leave us his provider picks in his comment to my post Lot-Limit and Stop-Loss results a post a few days back.

To your left find a report showing the results when those providers were run through by 2-lot 180-pip stop filter. A few things jump out, but they can be deceiving, so let's go through his picks one by one and come back to the graphic as needed.

His first pick is King Trade who looks pretty good. He's been on the Zulu system for about 4 months with 255 trades and a max drawdown of -115 pips and I can only see a single 2-pip loss in his entire 4 month history! That gives him profit factor of 306 which is pretty much off the charts. If ever there was a provider worthy of a demo account, its King Trade.

Next up is one2three. One look at his profile page indicates he has over twice as much in open losses as his has in closed profits. This means he just opens trades and wait for them to come back which is not a workable strategy for me.

Next up is SFForex who at first glance who has a max drawdown of -113,410 pips and a closed profit of 63,789 pips. This is the very definition of a risky provider where drawdown exceeds profits and I have to look elsewhere for that reason.

Next candidate is 1NEARD_X. This provider appears to have some promise, but there are large drawdowns (-380 pips) is his history, and he's only actually closed trades on 3 different days on the Zulu system. In fact it looks like he's actually made only 3 distinct trades on the Zulu system and the last of the 3 was basically the same trade 47-times over. This guy is definitely playing with funny money and i'm not amused.

Next victim is GETTIN PAID!!! who went negative this past week after being up almost 3000 pips. He got crushed by a series of losses in a long GBP/JPY trade which got stopped out down -500 pips. Since 500 pips is the system default stop, its clear he just put these trades on and walked away. I feel sorry for this provider having taken some real 500-pip losses myself.

Next up is *Instant Cafe Records* which is pretty creative name. Unfortunately, he has 1,200 pips in open losses for his 2,300 pips in closed profits which is a non-starter for me. Next please.

Next provider is JEDI42 who has a 95% win rate. Unfortunately, his largest drawdown is -1082 pips for his 669 pips in closed profits. This isn't really that bad, so i'm pretty picky nowdays so i'm going to have to pass.

Next case is SharePips who was also riding high lately until a pair of 500 pips losses came along and cut his profits by 40%. Another case of leaving losses for -500 pips (similar to GETTIN PAID!!!!).

Next up is Winpips4Us. This provider seems to have some promise with a 95% win rate but with an average win size of 5 pips, if this guy take more than a 5-pip profit, its apparently by accident. I have to see wins greater than the 20-pip range to make it worth my while. A good example is TheKillerz who averages closer to 30 pips per trade. Otherwise, its like picking up nickels in front of a steamroller. Sure you'll make some profits, but sooner or later, you'll get steamrolled.

Next up is TORA! TORA! TORA! who took it on the chin this week with a serious of -500 pips losses. This provider lost 6,500 pips this week. And I thought I had a bad week on Zulutrade!

Next up is FxTeddyBear who looks pretty good, but hasn't traded since July 15, 2009. So we'll have to disqualify him on the basis of inactivity. Of course, with how well I have been doing with Zulutrade, non-trading would be a preferable strategy.

Last up is auto-fx who hasn't traded since 9/15/2009. This isn't because he hasn't been active on Zulu, its just that he has a boatload of aliases and just moves between his 43 different aliaes and takes profits when he has them. Fun for him, not much fun for me. He's making more money with SURFING who is currently #2 on the Zulutrade system for "Sum of Live Trade" as shown on my post Top Providers by Live Trade 11/20/2009.

So the only provider that comes out of this evaluation with a demo is King Trade who looks like a screaming winner. Enjoy your Saturday and check back later.

Zulutrade - Live Account update - 11/27/2009

2009-11-27T11:41:00.000-08:00

Welcome back Zulu-traders.

Well it was a brutal week with my live account and I need to take some steps to protect my remaining captial before I do much more live trading. If anyone reading this blog can suggest a good FX broker who works with Zulutrade and allows Micro (1K) lots, please let a comment and let me know. Please do that now before you forget and then go back and read the rest of this post.

Let's get back to the week's trading. The week started out on a down note when I manually closed a trade put on by EliteCapital for a loss of 64 pips. This turned out to the bottom of the trade and EliteCapital closed it the next day for a 100-pip profit. I wasn't too concerned about this at the time as I figured it could make it back easily enough.

Monday was a good day and all of my providers participated and I picked up 59 pips.

Tuesday was a pretty decent day and I picked up 36 pips, and everyone participated except for Cheetah. Late Tuesday Bigwin went short 2 lots of GBP/USD in the low 1.65's which looked like a pretty good trade at the time. That trade didn't work out and I went to bed down about -60 pips on each lot, pretty far away my -180 pip stop.

I woke up Wednesday to find myself stopped out, down -180 pips on each position. This was a -360 pip gap down in my account, but I can't complain since Bigwin has added about 495 pips into my account since I added him in early November.

Not content with that trade, Bigwin went long USD/JPY at 87.60 which had just pierced the recent low at 88, but had not yet taken out the intra-day lows set back in late 2008 and early 2009. This trade was in the money briefly, but started to go negative, and I closed this trade out down 1 pip. Then Bigwin came back again and added another lot which I closed out later that evening down -37 pips.

Between those 2 trades, EliteCapital came in and bought USD/JPY right about the same price level - 87.70. I stuck with this trade which hit my -180 pip stop early in the evening on Thursday 11/26. Not content with those losses, both EliteCapital and Bigwin came back and bought USD/JPY again and I close both of those trades manually, down -48 pips and -112 pips respectively.

I understand the Martingale concept where you increase your bet size as the position moves against you. Then you basically make it all back (and then some) when the position moves back in your favor. But that strategy is a sure thing only when the gambler has an unlimited risk capital. Wait - Zulutrade providers have unlimited risk capital - but I don't. So this strategy might work for them but doesn't work for me. Seriously though, why do these guys continue to add to loosing positions? If something isn't working out, do you keep doing it?

The week ended on a slightly brighter note where Cheetah came in and added 27 pips in pair of trades on Thursday evening and Friday AM.

Overall stats for the week:

TheKillerz + 113 pips - This provider has been sublime - let's hope he keeps it up!

Cheetah + 46 pips -Slow but steady

EliteCapital - 259 pips - Ouch!

Bigwin - 494 pips - Double ouch!

The overall net on the week was -594 pips.

Granted, Bigwin's GBP/USD trades topped out -220 pips and my stop was -180, and these trades were closed out by him for a profit within 24 hours of my being stopped out. But I closed out 2 of his USD/JPY trades for a small loss which would have gone on to much larger losses.

Similar situation with EliteCapital where I closed some of his trades early, but also saved some further losses. We can take a look a better look at Elitecapital when I review his demo account. I clearly added him to my live account too early.

Overall, I think I understimated the amount of drawdown involved in successful trading. I'm thinking if I went to 10-cent pips instead of dollar pips, I could better take the pain and have a better chance of making money.

Have a good weekend all and stay tuned for Rossco's provider picks from my post Zulutrade - Lot Limit and Stop Loss results.

Zulutrade - Expiring demos wrap-up

2009-11-26T05:32:00.000-08:00

Welcome back Zulu-fans.

Thanks to everyone who commented on yesterday's post - Lot limit and stop loss results. I have some follow-ups from that post, and I'll get to those later or tomorrow. But I have demo accounts that are closing tomorrow, and I need to put the wraps on those before they disappear.

First up is Isunia who zigged-zagged between profit and loss as shown the the graph above. He hit my -180 pip stop twice during the demo period. Not a terrible record, but not extraordinary either, so we won't be following this provider going forward.

Next up is Student who turned in a solid (but not extraordinary) 128-pips in the 30-day demo period. What's impressive is that he lost only 4 times out of 22 trades total, and his maximum loss was -15 pips! I'll be watching this provider going forward although I'm concerned his low level of profitability could be blown out by a news-related price gap.

Next up was Sophistication who lost 630 pips during the demo period. He hit my 180-pip stop 10 times during the demo period and shows clearly too much drawdown for my 10K lot account. He might work for a smaller lot size, where I could tolerate more drawdown, but clearly not working for my account parameters.

Next up was JLOFX who sprung into action on 11/24 after almost 25 days of no trading activity. Its like he suddenly realized he was about to be eliminated due to inactivity and he sprung into action pulling in 59 pips over 9 trades in a 2-day period without a single loss. This is impressive, but I prefer providers who put in a daily effort perhaps missing a day here and there so we will look elsewhere.

Next up is Wqq899 who lost -538 pips over the demo period. This provider got off to a bad start, being stopped out on his first 3 trades, and never recovered from that drawdown.

Last up is Trendcatcher who shows a loss of -440 pips over the demo period. I found out from a comment by Alan that his loss of -157 pips in my demo account was actually closed by the provider for a small profit. Even so, I've been following this provider for a while and while he has good loss control, and trades like he's using real money, he's not consistently profitable enough for consideration for my live account.

So the only demo provider to survive this evaluation was Student.

That's all for now, enjoy your Holiday and don't eat too much Turkey!

Zulutrade - Lot Limit and Stop Loss results

2009-11-25T11:50:00.000-08:00

Welcome back Zulu-fans!

Well I've been promising it and here it is. To your left, please find analysis of the top 20 providers in Zulutrade after my 2 lot, 180-pip stop filter has been applied.

Before we get to lessons learned (and there are plenty), let's examine the results overall.

Of the 1084 providers analysed, only 499 (just under 50% of them made any profit at all. When I add up the total pips earned across the group, they actually lost -480,966 pips. When I sum up the draw down, that equals -1,230,294. That means the profit factor (profit earned for draw down encountered) is actually -0.39! That means the system as a whole loses money when lot limits and stop losses are used!

It's no wonder that Zulutrade won't let you filter the results for the stop and limits, because if they did so, you probably wouldn't want to trade on the system! And that's where the Zulutrade dream meets hard reality. Use of stop and position limits in general kill profitability.

I went back and ran the same stats for the database without use of stops and lot limits. For that sample, the entire system earned 667,176,917 pips but had -769,083,710 of drawdown. So for the entire system (without stops and lot limits), the profit factor is only 0.86, less than one. That means the Zulu system as a whole is a "Risky Provider" meaning drawdown exceeds profit earned!

Now let's focus on the top-20 graph from above. Most providers (with the exception of Real Conservative Trading and Crocodile have drawdowns greater than -500 pips. That's explains why I have consistently lost money on Zulutrade. Its because I usually drop providers once their drawdown exceeds 500 pips or about 5% of my original $10,000 investment. Even with the top 20 providers, you would have had an average of -717 pips drawdown.

So what does all this mean? It means that Zulutrade is mostly a losing proposition, at least from the customer's perspective. Of course, the FCM's, the Providers and Zulutrade themselves make money. But the customers have the odds against them for making any money.

Another key takeaway is that the more conservative you are with your money (by use of lot and stop losses), the more likely you are too lose it! Put another way, the use of stops and limits keep you in the game longer, but in the end, they just prolong the pain and you loose you money over a longer period of time instead of losing it all at once.

Overall, this is a pretty depressing set of circumstances. I'm going to need to assimilate these results and decide whether I want to risk any more real money with Zulutrade. I love the concept, but I'm having a hard time with the reality.

All that said, some providers do have an uncanny knack for making money, even with stops and lot limits. Some of my favorites are #16 Bigwin, #24 Coolie1997, #69 Cheetah. Cheetah himself is pretty amazing overall in that according to my simulation he earned 1123 pips with a max drawdown across trades of only -50 pips.

Another example is TheKillerz who is #124 on the filtered list with 733 net pips and 395 pips drawdown. And TheKillerz has only been active on the system for about 9 weeks! So I think you can make money with good providers overall, but if you can't handle a drawdown of -1000 pips, you're probably going to lose your nerve (and leave the table) before your provider can make your money back.

That's all for now, thanks for reading. And for those of you based in North America, have a Happy Thanksgiving!

Zulutrade - Top Providers by Live Trade - 11/20/2009

2009-11-23T04:03:00.001-08:00

Welcome back Zulu-traders.

To your left, please find the top 20 providers by Live Trade in the Zulutrade system for trades closed from 11/15/2009 through 11/20/2009.

Cheetah occupies the top spot, up from #5 last week. New comer Jack Bauer made a big move up to occupy the #11 slot, up from #60 last week.

My personal favorite Bigwin rose to #15 on the week up from #27 last week. Our other favorites not appearing in the top 20:

Coolie1997 - #34
TheKillerz - #48
Trendcatcher - #129

Keep in mind that these numbers (along with everything else on Zulutrade) are somewhat suspect. So this information is for entertainment purposes only.

Have a great week and stay tuned for my analysis of top Zulutrade providers when my 2-lot, 180-pip stop filter applied.

Zulutrade - New Pairs, Performance Graphs

2009-11-22T14:14:00.000-08:00

Welcome back Zulutraders. Two items for your attention.

First, check out the new, weekly performance graphs provided by Zulutrade for each of your demo and live accounts. I received the graphic via e-mail earlier today (Sunday) with a single e-mail containing the performances graphs for each of the accounts covered under that e-mail account. The graph covers the prior 15-days performance.

Above, please find the performance graph for provider Trendcatcher for this past week. Thanks to Alan for commenting and pointing out that an open GBP/JPY trade opened by Trendcatcher was closed by Trendcatcher for a 25-pip profit. In my demo account, that same trade was allowed to run to a large loss. Alan rightly pointed out that until these issues are resolved, we can't commit any serious funds to Zulutrade.

Second item is that Zulu added 2 new pairs (at least for FXCM users), EUR/CZK and USD/CZK. If you have stop values set for your providers, they have been converted to "per currency" stop values. You need to go to the settings tab under your account, and add stop values for these 2 new pairs for each provider. If you don't do this, then any new trades which hit your account from these pairs will have no lot or stop limits which could have bad consequences for your account. So take a look and make sure you are covered.

Cheers have a have a great week,

Tcxmon

Demo Accounts Update - 11/20/2009

2009-11-21T04:36:00.000-08:00

Greetings from the Zulutrade jungle.

Here's a weekly recap of demo accounts i'm following.

The screaming winner for this week on the demo side was TheKillerz who picked up +267 pips. His demo account is up 331 pips in just one week's time. And keep in mind this is with a 2-lot limit and 180-pip stop, so with was done with realistic account parameters. I added TheKillerz in my live account this past week and he picked up 46 pips in 2 days trading.

Next up is Isunia who picked up 60 pips on the week. Overall, he's up 259 pips since the start of the demo period. He hit my 180-pip stop 2 times and at one point was down -75 pips in the demo period, but he's fighting his way back. He's also gaining in popularity and was #7 this past week in terms of live following on Zulutrade. Looking at his open positions, he's leaning heavily in favor of further gains in USD versus EUR, CAD and NDZ and AUD. Also keep in mind that he keeps loosing positions open until they come back to profitability which explains his 94% win rate.

Next up is Student who was up 53 pips on the week with 6 trades. Overall, he's up 103 pips in the 3 week demo period. On the bright side, he has small drawdowns, and I don't see a single trade moving against him more than 35 pips. But we know there were issues with incorrect drawdowns in EUR/USD this past week, so we can't really trust these numbers. Also, with his average winner you in the 10-12 pip range, I don't seen enought pippage here to come back from the inevitable drawdown.

The chickens's came home to roost this week for provider Sophistication since his heavy short positions in GBP/USD came back into profitability. Unfortunately, by that time the damage had been done in my demo account and at one point he was down about -1,300 pips. Even though he had a good week (+248 pips). This large drawdown make this provider a non-starter for my live account.

Provider JLOFX hasn't placed any trades in the demo period, so we haven't learned anything from this demo and will be dropping him unless he does something in the remaining 7 days.

Next up is Wqq899 who gained 90 pips on the week. Prior to that, though, he's been a complete disaster and hit my 180-pip stop on his first 3 trades. That definitely would have sent me running for cover in my live account.

Next up is TrendCatcher who was up 146 pips on the week but still down -141 pips since the start of the demo period. You would never know that from looking has his public profile. Again, stops and position limits make a HUGE impact on actual result and often cause large differences in performance between public and actual results.

Next up is Cheetah who as picked up 78 pips in the 3 week demo period. Overall, i'm not impressed since his average winner is less than 10-pips and not really enough to justify the potential drawdown. I'm thinking of removing him from live trading this coming week.

Next up is Coolie1997 who was up 89 pips this past week. But he's down about -781 in open positions and added new positons in NZD/USD and EUR/USD this past week. He's positioned for further dollar weakness this coming week.

I realize that's a long list and the only ones who i'm going to keep following once these expire are Isunia, Coolie1997, TheKillerz and EliteCapital. Check back later for a list of Top Providers by Live Trade for this past week and other cool stuff.

Zulutrade - Live Account update - 11/20/2009

2009-11-20T13:09:00.001-08:00

Welcome back Zulu-traders. Here's an update on my live account results this week.

Provider Bigwin was my big winner on the week pulling in +251 pips. He went short GBP/USD at 1.6819 which turned out to be a brilliant trade. He stuck with it and at one point was up over 200 pips. I ended up closing the trade on Thursday up about +156 pips, see the graphic on the left.

What's strange is that I found out later that he closed that initial trade for +5 pips that same morning. But for some reason, my account stuck with the trade and it paid off. This was a case where a flaw in the Zulutrade platform actually worked in my favor.

Either way, Bigwin continues to work for me as a provider and he's now added +495 pips to my live account since adding him back on 11/1/2009. He's also had 27 straight winners and hasn't hit my 180-pip stop even once.

Next up was TheKillerz who added +46 pips in 3 live trades since I added him on Wednesday 11/18. TheKillerz is also on a roll in my demo account where he added +331 pips since I setup that account last Friday 11/13/2009. In that account he has 15 straights winners.

Next up was Cheetah who was a complete wash for the week, adding 0 pips. He had 7 trades total with 4 winners and 3 loosers. On the whole, however, he has added +22 pips to my live account since I added him last week.

Next up was EliteCapital who I added late Thursday with one lot and 140-pip stop. He came out right away with a drawdown which was not confidence building for a new provider. I ended up closing this trade out for a -75 pips loss, but I held onto his GBP/JPY long into the weekend.

Last up were some manual trades I made which all turned out badly. In one case, I hedged a Cheetah trade and lost -160 pips. In another case, I followed Coolie long NZD/USD but at a better entry point than Coolie. This trade was profitable for most of the day Thursday, and at one point was up almost +35 pips. But the dollar rallied and NZD sank on Friday and I ended up closing this trade out -75 pips.

Overall, my live account is down -14 pips for the week but up +89 pips since the beginning of November. I think I learned that I need to trust my providers more and stick to the trading plan. Its easy when providers jump in and out and make a profit for you when you not even looking. Its another matter when a trade moves against you, and you end up taking a loss before you planned stop value just because you can't take the pain. That's why its important to follow your providers for some period of time and get to know them before going live. I need to have confidence that even if I get stopped out, the provider will come back me money long term.

Perhaps I added EliteTrader a bit too quickly. Anyway, let's see what he can do next week. He doubled down on his EUR/USD and GBP/JPY longs at the close and I stuck with the GBP/JPY long.

That's all for now, time to load up my Zulu provider database and see what interesting nuggets drop out!

Cheers and stay tuned.

Zulutrade - New demos for EliteCapital and PraetorianGuard

2009-11-18T14:40:00.001-08:00

Welcome back to the wild world of Zulutrade!

Where else can you turn on your computer and find that someone on the other side of the world (who you don't know and will never meet) just made you 20 bucks?

Anyway, while combing the Twitter-sphere, I came across EliteCaptial and his more agressive sister account PraetorianGuard,

This provider seems to have all the right stuff as follows:

1) Good choice of provider names with no embedded spaces or funny characters that will crash my web-crawler

2) Nice account graphic indicating some degree of effort and sophisitication

3) Professional profile description that seems to match my own objectives which are account growth with a minimal tolerance for risk.

4) EliteCapital takes about 20 pips per winner and would have hit my 180-pip stop 7 times in his 127 trade history. That's about a 95% win rate and puts him well on the positive side of the sustainability equation. Running him though my 2-lot, 180-pip stop filter, he would have earned 690 pips versus his public records 2315 pips.

5) PraetorianGuard takes about 14 pips per winner and he would have hit my 180-pip stop 2 times in his 70-trade history. That's about a 98% win rate, and stepping down to a 95% win rate, he comes out on the positive side of sustainability, but not so much as EliteCapital. He would have made 431 pips after my stop, limit filter versus 829 in his public record.

6) Both providers put in a daily effort and trade almost every day, perhaps missing a day here and there.

Keep in mind that these are relatively new providers, EliteCapital has only been around for 8 weeks and PraetorianGuard only for 3 weeks. But even in that brief time, they have earned a spot on my demo account.

You can follow this provider on Twitter at http://twitter.com/EverquestFX.

And you can follow me on Twitter at http://twitter.com/tcxmon.

Cheers and check back later for more updates.

Zulutrade - Happy Anniversary FXTOIS

2009-11-18T03:44:00.001-08:00

Welcome back to the strange world of Zulutrade.

Happy one-year anniversay to Zulu provider FXTOIS who closed his first trade on the system back on 11/14/2008.

Taking a look at profile page for FXTOIS, we can see he has a profitability rate of 86% with an average winner of 22 pips. His maximum drawdown is pretty high and is at 90% of his total profit. This puts him dangerously close to 'Risky Provider' status. Also, his average trade length is 45 hours which is on the long side.

Out of 253 trades, this provider has over 40 trades with drawdowns greater than 200 pips. He also had a dozen trades with drawdowns over 400 pips. So it appears that this provider weathers alot of drawdown compared to Cheetah for example. Cheetah has had over 430 trades without a single trade with drawdown more than 125 pips.

Keep in mind that we can't always trust the Zulutrade's history. In fact, we had a strange issue with Cheetah's trades earlier this week pointed out by fellow blogger Townjet. Take a look at Zulutrade Cheetah's strange trades for the details.

Back to FXTOIS, I would classify him as a "high drawdown" provider and look elsewhere for new demo providers.

Congratulations to FXTOIS for one year on the Zulutrade system.

Tcxmon

Zulutrade - Top Providers by Live Trade - 11/13/2009

2009-11-16T09:40:00.001-08:00

Welcome back Zulu-traders.

To your left please find a list of the Top 20 providers on Zulutrade from 11/8/2009 to 11/13/2009 for positions closed in that period.

If you've been following this blog, you know that we can't completely rely on this figure to be accurate. Based on feedback from provider Coolie1997, we estimated that these figures can be understated by a factor of 4. In other words, the trade values are in reality 4 times larger as we see on the left with each unit being a Mini (10K) lot.

By the way, Coolie came in at #31 on the list with 40 live trades closed.

I haven't done any diligence on these providers, so I can't say they are worthy of risking your own hard-earned dollars. Even so, its interesting to see who is on top in terms of having the greatest dollar following from users with live accounts.

As promised, I ran my 2-lot, 180-pip-stop filter through my Zulutrade History database with some interesting results. I need to do some additional work to calculate the requisite drawdown (and required account size) before I share that data. Stay tuned and perhaps I can get it out later in the week.

Cheers,

Tcxmon

Zulutrade - Demo Accounts update - 11/13/2009

2009-11-15T04:55:00.000-08:00

Welcome back Zulu-traders.

Here's my weekly update from the demo accounts i'm following.

Trendcatcher added 136 pips on the week, but is still down -287 pips since the beginning of the demo period back on 11/1/2009. In terms of his public profile, he's only down about 27 pips since 11/1, so my 2-lot limit is making a big difference in terms of his profitability. Overall, i'm not convinced this provider can pick trades any better than chance, and he often stops out trades with losses under 100 pips.

Next up is Coolie1997 who had 127 pips in closed profits for the week. The graphic above shows his public facing account history which shows nothing but green since 10/18/2009. What it doesn't show is the 4 lots he has open already which have a -360 pips in open losses. So in that respect, Coolie is starting to resemble some other Zulu providers who paint the tape green by taking profits when they have them, but let losses ride until they come back into the green. Anyway, we will continue to watch this provider as he provides a lot of good trades.

Next up is Isunia who is up +199 pips since the beginning of the demo period back on 11/1/2009. Interestingly, he has hit my 180-pip stop twice, and still come back to show a profit. That's pretty impressive and i'm going to keep watching.

Next up is TheKillerz who is on a terrific roll. His demo account closed out mid-week in fine fashion, see The Killerz Comeback. I opened up another account on Friday where he pulled in another 64 pips on Friday alone. On the public side, he is up +3400 pips in the 7 weeks since he started this new account. When I run his public record through by 2-lot, 180 pip filter, he comes up with a gain of +468 pips. When I increase that stop to -300 pips (per his suggestion) the results are identical. I think more work is required to discover the ideal stop for this provider.

Next up is Student who has gained 50 pips since I added him back on 11/2. On the public side, he has gained 25,000 pips in that same timeframe, but he has done so by opening multiple trades of 100 lots each. Overall, i'm not impressed since his gains are too small to overcome the nasty 150-pip gap that will come eventually.

This difference between public and actual performance makes me angry, because Zulutrade could fix this problem and keep new Zulu-customers from going off the cliff, but they refuse to do so. If they did, it would saved me $1000's of dollars in losses before I discovered this reality. I think this deception is what is keeping Zulutrade from getting really big. Come on Zulutrade - I know you are reading this blog, so bow to the pressure and do the right thing.

Next up is wqq899. This provider has been a complete disaster and has hit my -180 pip stop on 4 of his 7 trades. Not sure what I saw in this guy. Next.

Last up was Sophistication who took a beating his his short GBP/USD trades and closed out the 2 week period down -969 pips. He hit the 180 pip stop 7 times in the 2 week period and definitely is not working for me as a provider.

Lessons learned are the usual - public records on Zulutrade are very deceiving and it takes a demo account to really discover the truth about how providers will perform in your real account.

My local database of Zulu provider history now has 350,000 records in it. I'm planning to run my concurrent lot, stop filter through the provider history to find out who the real winners are. This will allow us to wander of the beaten path of the top 100 providers and discover some new talent that is undoubtedly lurking among the approximately 700 providers in my database.

So stay tuned for that and have a great week.

Zulutrade - Live Account Update - 11/13/2009

2009-11-14T06:11:00.000-08:00

Welcome back to the wild world of Zulutrade.

It was a pretty good week in the Zulutrade jungle and my account continues to rebuild after a punishing October.

Provider Bigwin had another good week, and has now added +244 pips to my account since adding him back on 11/2/2009. Bigwin now has 18 straight winners and I would have make another 120+ pips but I closed out his short GBP/USD trade a bit early.

Provider Cheetah Cheetah also contributed a pair of trades adding +22 pips. Cheetah also appears to trade in "runs" like Bigwin, and the first trades in the run are generally not the ones that make the most profit.

I also followed Coolie1997 on some long EUR/USD and NZD/USD trades, and closed those out for a net profit of 14 pips. He later closed out NZD for a good profit and still has USD open. I could beat myself up over cutting my winners short and not letting them run, but its best not to over think things.

I'm starting to understand Coolie's style a bit more, but not quite comfortable with his ability to control losses. Perhaps its his knowledge of the fundamentals that gives him the ability to hold on through drawdowns. As of now, he has 360 pips in open losses and almost 2400 pips in closed gains. This is a reasonable percentage compared to some other Zulu providers. In my case, I don't want to tie up account margin on trades that are not working out. Either way, he's a very talented trader and worth continuing to watch.

That's all for now. Check back later for a review of the week's action in demo accounts.

Open up a free Zulutrade account by clicking here.

Zulutrade - How to rank providers

2009-11-12T18:20:00.001-08:00

Welcome back Zulu-traders.

I must admit I've been baffled up to now as to how to submit my own rankings for providers I have used in the past. I had an IM converation with Julia from ZT support this evening and she filled me in.

I think my education and experience as IT professional was working against me in this case. Anyway, here's the procedure.

Basically, you go to the provider profile page and scroll down to the bottom just above the trade history. Hold your mouse over the 1-5 stars next to the 3 questions. If you have used the provider in the past, you will be able to click one of the 5 stars which auto-blank from the right and auto-fill from the left. In other words, you can select any number of stars from left to right.

If you have not used the provider, the mouse cursor will become a red "Do Not Enter" sign.

Notice that there are no negative ratings. Its kind of like a survey with choices "I like the performance of my local politician" with choices "A Little, Somewhat, Moderate, Moderately Positive, Very Much". There is no choice for bloody awful.

Provider ratings is another interesting way to compare provider popularity. More on that in a future post.

Cheers and good trading,

Tcxmon

Zulutrade - Pro-B5 Anniversary

2009-11-10T17:06:00.000-08:00

Welcome back to Zulu traders.

Happy one-year anniversary to provider Pro-B5 who closed his first trade on the Zulutrade system one year ago back on 11/12/2008.

We have a long history with Pro-B5 starting back in February of 2009 with the post Shaken out of Pro-B5.

He had a big run over the summer of 2009 and landed at the top of our provider picks in early August leading to our post Pro-B5 Promises and Delivers. Pro-B5 generously responded to that post, weighing in on a number of issues dear to Zulu signal providers and subscribers alike in his response Pro-responds back on August 6th.

From there, things got rocky, leading to my post Pro-B5 takes a hit and Pro-B5 wipeout back on September 19th. Since I left Pro-B5, he has had a net gain of 335 pips with only 5 losses since then with a max loss of -129 pips back on 11/1/2009.

As a provider, Pro-B5 is probably as real as it gets. He rarely opens more than one lot at time which sets him apart from the bulk of Zulu-providers who open many lots and run large drawdowns.

Also on the plus side, Pro-B5 trades like he is using his own real money which is rare on Zulu. Also since he opens few concurrent lots and manages his open stops, you don't need do a lot of manipulation to see how your would have done with a reasonable stop and lot-limit

On the negative side, Pro-B5 takes relatively small profits. Since September 1, his average winner has been about 13 pips and his win % rate has been close to 90%. With a 90% win rate, he would have to make better than 18-pips per winner to come out on the positive side of the sustainability equation when using my 180-pip stop.

But since he manages his own stops, we can use his average loss of -72 pips (since September 1) instead of my stop value. In that case, if he wins 90% of the time and takes on average 13 pips per trade, he comes out on the positive side of sustainability equation

Also, his win size has improved somewhat lately and he took a 43-pip winner back on 10/14.

Overall, Pro-B5 is a solid member of the Zulu community and we thank him for his ongoing service. You can follow Pro-B5 on Twitter at https://twitter.com/prob5

Cheers and good trading,

Tcxmon

Zulutrade - TrendCatcher Anniversary

2009-11-10T13:49:00.000-08:00

Welcome back Zulu-traders.

With my database of Zulutrade provider history now in full swing, I ran a query showing providers who have been on Zulutrade for a whole year. Providers who have stuck with same screen name for an entire 12-month's deserve some credit and are worth a look.

Today's luck winner is Trendcatcher whose first trade on the Zulutrade system was on 11/10/2008.

I've been following Trendcatcher in a demo account since 10/29/2009 with a 2-lot limit and 180 pip stop. As of today, he's down -293 pips since the start of the demo period, but he does have a +120 pip open gain in a GBP/JPY trade.

Looking at the demo period, out of 30 trades, he's has 19 winners and 11 loosers. With a 66% success rate, I prefer providers with a higher win rate. This gives me more confidence that the method of entry is selective and disciplined, well beyond what you could get from a coin-flip.

What's positive about Trendcatcher is that his profile indicates he trades his own signals, and based on his loss-aversion, I believe him.

Looking longer term, Trendcatcher has had some good months with monthly profits well above over 200 pips.

Strangely enough, he seems to do better in the in the autumn/winter months, and not as well in the summer months. I don't know if this has any significance - perhaps he's out on his jet-ski when the weather is nice. Nothing wrong with that.

The graph also shows that loosing months are relatively rare and we'll be following Trendcatcher to see if he can pull out a profit for this month.

Trendcatcher also runs a more agressive account called Magnum UB which has some nasty drawdowns and is close to 'Risky Provider' status where drawdown exceeds closed profits.

That's all for today, cheers and good trading.

Tcxmon

Zulutrade - TheKillerz comeback

2009-11-09T08:36:00.000-08:00

Welcome back Zulu traders.

I've been watching a provider called TheKillerz for the past month or so, after meeting him on Twitter under the name Gascan69. That account was closed due to some platform issues and he started fresh under TheKillerz back on 9/30/2009.

My demo account started on 10/12/2009. I limited him to 2 lots with a 300-pip stop as per his suggestion.

Since the demo is about to close out, here's an update. At one point, he was down almost 450-pips. But he's come back into the positive, netting +191 pips total over the demo period. He closed strong last week with 15 straight winners. What's even more impressive is that the above results are a 2-lot limit, so he produced a screen looking like that without "painting the tape" by making the same trade 15 times.

In terms of sustainability, his average profit for each winner was 45 pips. Out of 33 total trades, he won on 26 (78%) of those trades. His average loser was -124 pips. Based on my stop loss of -300 pips, he would have to win 86% of the time (with an average win of 45 pips) to cover the stop loss. Working in his favor is the fact that he often closes loosing trades well before the 300-pip stop is hit.

Based on my account size and tolerace for drawdown, i'm not ready to add TheKillerz to my live account, but he's definitely worth continuing to watch via a demo account. I think based on my account size, 2 micro lots per trade would be a better fit than 1 mini-lot.

Also, I owe Mr Rabea a review on The Killer's "Hot Fuss" album. I gave it a spin today and here goes.

"Mr Brightside" is definitely the bright spot of this album. It starts out with some intricate guitar work then builds on top of that basic riff with an incredible amount of power and energy that's pretty rare for a studio record. I can imagine what these guys are like in concert.

Track 7 - "On Top" shows the dance-inspired electronic influence that we saw rise to prominence with the Killer's big hit this year "Human". Some spacey guitar shows some U2 influence as well, and this is my second favorite. Track 9 - "Believe me Natalie" has some influence of The Cure. Track 10 - "Midnight Show" sounds Billy Idol inspired.

Track 11 - "Everything will be Alright" is definitely a wind-down type song and is the closest this band gets to a slow song.

Besides great song-writing, vocals of lead singer Brandon Flowers gives this band a unique signature. Also, his phrenetic, almost psychotic delivery leads you to beleive he's about to come off the rails at any moment. It definitely appeals to the younger, more wired demographic.

Thats all for now, good trading all.

Zulutrade - Live Trade Analysis

2009-11-08T04:31:00.000-08:00

Welcome back to the wild (and often deceiving) world of Zulutrade!

Looking at the Zulutrade performance page, its easy to click on the Users tab and sort the provider list based on the number of subscribed users. When you do that, provider Lowest DD comes right to the top. In fact he has almost 3 times the number of subscribed users as the next closest provider Pro-B5.

Presumably, this number includes both the number of live users and demo accounts following this provider. But can we trust this number?

When you think about it, this number can pretty easily be manipulated. All the provider has to do is request 5 new Zulutrade demo accounts per day (which I believe is the limit) and setup each demo account to follow themselves as a provider. Create 5 or 10 free e-mail accounts using Yahoo, and in an hour or two's work, a provider could easily add another 100 fictional followers. Repeat this every day for 10 days and bingo! 1000 new fictional followers!

What we really needs is a way to get under the covers and see how many real users are following the provider with real money accounts. The Zulutrade profile screen doesn't reveal anywhere how many live users are following a provider, so we need a way to peer under the covers and get at the live trading data.

Fortunately, the provider history (available for download via Excel) has a field called "Live Trade". This field presumably shows how many live users took that particular trading signal - although I can't find it documented anywhere. This is a much more accurate measure because people vote with their wallets. Also keep in mind that its not necessarily indicative of number of users, because a few very large users (with deep pockets) could be accounting for much of the trading volume.

Anyway, using my local database of Zulutrade provider history, I was able to reveal the real top users on Zulutrade according to actual trades executed. The table on the top shows the top-10 providers in the past week (DateClosed > 10/31/2009).

I haven't analyzed these results in any detail, but a few interesting things come out. First, my recent favorite Isunia occupies the # 10 slot. Isunia also occupies the #6 slot in terms of total user count and was the only provider to appear on both lists. If I was in law enforcement, I would call this corroborating evidence.

Anyway, here's a few other observations, that you can't see from the table above. There were 182 providers who actually had trades this past week and the total sum of live trades were 11765. I don't know all the specifics of pip rebates, but those of you who do might wish to leave a comment indicating an estimate of much Zulutrade as a system makes in a given week.

Here are a few other tidbits:

Bigwin is #12 with 200 live trades

Lowest DD is #23 with 146 live trades

Cheetah is #30 with 127 live trades

Sophistication is #31 with 122 live trades

Pro-B5 is #124 with 17 live trades

The Hunter is #158 with 5 live trades

So its clear that things are not always what they seem. Good luck and good trading!

Tcxmon

Zulutrade demo accounts update 11/6/2009

2009-11-07T13:34:00.000-08:00

Welcome back Zulu-traders.

In my post Profit-to-Drawdown back on 10/28.2009, I took my new local database of Zulutrade provider history out for a test drive.
The database now has history on over 550 providers and 250,000 individual trades.

Anyway, the goal of the post was to identify providers that produced a high amount of closed profits as a percentage of drawdown on those same trades. The idea is that a provider that takes a 40-pip profit after a -10-pip drawdown is better than a provider that takes a 40-pip profit after a -120 pip drawdown.

Based on that list and some additional screening, I created a series of demo accounts. Let's see how those providers have fared in the week and a half since i've setup those demo accounts. To keep things realistic, I setup each provider with a maximum of 2 lots and a 180-pip stop which are the same settings I use in my real account.

First up is Isunia who bagged 107 pips since I added him on 10/28/2009. 19 out of 20 of his trades were winners. At his peak, he was up 276 pips, but hit my stop on one of the trades. His average pips per winner are about 15 and with 95% percent win rate he's just barely on the positive side of the sustainability equation.

For more on the sustainabilty equation, see my post Zulutrade stops According to the equation, Insunia would have to win 92% of the time on an average winner of 15 pips, so he's just barely positive with a 95% win rate. Anyway, I like Insuna's daily effort and will be watching him closely for a possible add to my live account.

The chart above shows the monthly profits for Isunia. You got to hand it to Zulutrade on those recent user interface improvements that make it easy to make great-looking blog posts.

Next up is Student who netted 49 pips, winning on 4 out of 7 trades. Impressive about this provider is that his maximum drawdown on any trade was -31 pips. His profile indicates these are his real trades, and based on his loss aversion, I beleive him. On the plus side, his win % rate is lower than I would like, but if he can keep his losses to under 100 pips, he could be a winner.

Next up was Sophistication who nabbed an impressive 138 pips and earned the most of my demo providers. At one point he was up over 450 pips which is pretty amazing for a 2-lot limit. Also impressive is that he leaned very heavily on the short side and every trade was a sell of GBP/USD. He would have had an utterly smoking week except that GBP/USD had a pretty good rally and my 180-pip stop was hit twice.

When GBP starts to sell off, this provider is going to make some major pipage. In fact he's short 15 lots of GBP/USD all the way down to 1.62.

Next up was JLOFX who hasn't traded since 10/27.

Last up was wqq899 who was a complete disaster. He only traded twice in the demo period and hit my 180-pip stop on both trades.

I have a few other demo accounts, but they didn't come out of the profit-to-drawdown screen. I'll cover them later or tomorrow.

Enjoy your evening,

Tcxmon

Zulutrade Weekly Update - 11/6/2009

2009-11-06T15:56:00.000-08:00

Welcome back Zulu-fans.

It was a good week in the land of the Zulu's and my live account finally showed some signs of life.

The last of my positions with Coolie 1997 got stopped out at a loss of -180 pips sending my account to fresh lows. Coolie went on to close that position with a +72 pip gain after a max drawdown of -188 pips. So unfortunately, my stop turned out to be a hair too tight on that trade.

On the bright side, I added provider Bigwin on Monday first with one lot. He quickly picked-up a few pips and I added another lot with my 180-pip stop. After taking in 7-pips he went into drawdown and I nearly got stopped out (down -163 pips) which would have been very bad and probably would have blown me out of Zulutrade for the rest of the year. But I hung in there and he came back to close that trade up +3 pips.

As the week went on, he slowly picked up steam and closed the week with 10-straight wins up +145 pips on the week with my 2-lot limit. On his public profile, he picked up 1390-pips on the week, trading between 10 and 20-lots at a time.

I was particularly impressed with the way Bigwin traded on Wednesday and Friday. In both cases, he layed low until after the big event of the day (FOMC and NFP) and then picked his entry point carefully. Friday's trade was downright surgical, picking up 40-pips on each trade in about 20-minutes time with about a 10-pip drawdown.

The more I learn about trading, the more I realize that its all about being selective. It takes a lot of discipline to ignore 98% of the price action and sit on your hands 98% of the time and wait for that one trade. But that's what I admire in Bigwin and other successful traders, and that's a goal I aspire to myself.

That's all for now, enjoy your Friday evening and i'll update performance on the demo accounts i'm following over the weekend.

Tcxmon

Zulutrade User Interface improvements!

2009-11-06T04:00:00.001-08:00

Welcome back Zulu-traders!

Zulutrade has made some really nice improvements to their user interface. They have also added some top-quality features make it easier to analyse provider history and open positions.

Most of the changes appear on the provider history tab. The performance graph has been given a new 3D look and feel. The graph on the left shows the performance history of provider British Pound.

Next up, notice the tabs along the top of the performance graph. They allow you to see the monthly P&L, Monthly Trade Volume and Currency pairs traded by the provider.

I particularly like the monthly P&L history because it allows you to understand why the provider might have a profitable history, but hasn't made any profit for you!

For example, the graph on the left shows that British Pound made the bulk of his profits in August 2009 and his returns have been declining by about 30% per month since then.

The trade volume and currency pairs tabs provide additional insight into the providers performance, well beyond what you could get previously. For example, take a look at the currency pairs trades by provider Coolie1997. Below is a graphical representation of just how versatile he is as a provider. I'll bet he trades more distinct pairs then any other Zulutrade provider.

The next really awesome improvement is the "Open Trades" tab at the bottom of the provider history page, just to the right of the trade history. This allows you to see the open trades for any provider where previously you had to subscribe to that provider to see the details of his open trades.

The benefit of this approach is as follows. Let's says you have a provider with good history like British Pound for example. You can see he's got almost 295,000 pips total profit, but about -2500 pips in open losses. But up to now you couldn't tell exactly where his loosers were.

Well now we can see that he's short 11 lots of GBP/USD from 1.62 to 1.65. This tells us that he's leaning heavily to the short side in GBP/USD which is nearly the identical position as his alter-ego Sophistication. Now we know that British Pound and Sophistication are highly correlated systems and following one is as good as following the other.

Another benefit of this approach is you can take a long-term position player like Coolie1997 and take a look at his open loosers. Given his history, its a pretty good bet that those loosing trades are going to come back to profitability given enough time. Like many good things in life, patience is required.

Despite these improvements, they are still missing 2 key features:

1) Let us filter the provider history on # of open lots

2) Let us filter provider history to simulate use of various stop-loss values

These last 2 items are key because (unlike Zulutrade providers) us real customers have a limited amount of risk capital.

Overall, though these improvements are welcome improvements. Good job Zulutrade!

Tcxmon

Zulutrade Provider Coolie 1997 comments

2009-11-05T18:28:00.000-08:00

Welcome back, Zulu-traders.

We heard back today from our recent favorite Coolie 1997 who offers some perspective on his absence from active trading on Zulutrade and his change in style.

By way of background, Coolie 1997 entered the Zulutrade scene on June 29, 2009. Through the end of September 2009, he racked up an impressive 2000+ pips. He was able to pull in pips from a variety of pairs rarely seen on Zultrade such as NZD/JPY, EUR/JPY and EUR/AUD just to name a few. Even more impressive was that he did so with a remarkably small amount of drawdown. His success landed him in the top-10 providers on Zulutrade (by user count) which is a pretty impressive accomplishment in such a short period of time.

Anyway, after my buddy Townjet over at http://www.zulutrade-top.blogspot.com/ had an excellent September with Coolie I jumped on the Coolie bandwagon. Since adding Coolie to my live account back on 10/13, i'm now down almost -700 pips down sending my account to fresh lows. Depressed by this change of character, I posted Coolie what's the deal? and Townjet posted Putting a hold on Coolie 1997 both in the last 2 weeks.

Coolie has commented today as follows:

Hi Tcxmon,

Sorry for a long absense.

I have been seeking what trade style is the best for Zulu and me. Zulu users like short term gain, and my real trade style is very long one. The change of trade style made the users' lot smaller.

The total lots of all the users became 10-15%. Even though my job prevents me from trading 24 hours a day, the answer is almost 1), not 2).Sorry again for a sudden change and a big loss, please use me effectively by putting stop order, betting small lot, etc.

See you sometime,

coolie1997

So Coolie has retreated to a longer-term trading style. In terms of his recent performance, he has closed +357 pips since I dropped him, but he has -334 pips in open losses. His open losses are about 12% of his total closed profits since account opening back in July. He's nowhere near "risky provider" status (where Max Drawdown exceeds closed profit), but he's clearly at a higher drawdown rate than we have seen historically. But he does lend some long term perspective to currency trading with larger tolerance for drawdown.

Anway, we thank Coolie for his comments and wish him all the best with his trading.

Stay tuned for the weekly update,

Tcxmon

Bigwin is back!

2009-10-31T07:23:00.001-07:00

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?

2009-10-30T16:33:00.000-07:00

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

2009-10-29T01:19:00.000-07:00

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

2009-10-28T11:05:00.000-07:00

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

2009-10-26T11:02:00.001-07:00

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

2009-10-23T07:34:00.000-07:00

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

2009-10-18T09:56:00.000-07:00

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

2009-10-17T13:28:00.000-07:00

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

2009-10-14T16:03:00.001-07:00

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!

2009-10-13T10:52:00.001-07:00

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

2009-10-10T17:46:00.000-07:00

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

2009-10-09T06:07:00.000-07:00

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!

2009-10-08T03:29:00.000-07:00

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

2009-10-05T08:31:00.000-07:00

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

2009-10-02T16:45:00.000-07:00

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.

Zulutrade - Back to the drawing board

2009-09-27T16:21:00.000-07:00

Greetings Zulu fans-

After last week's wipeout, i'm back into research and demo-account mode. So I scanned the top 20 providers and applyed this criteria. See my Feb 2009 post for some rationale behind these criteria:

1) No large, open drawdowns.
2) Consistent effort
3) 80% or better winning percentage
4) No "Painting the Tape"
5) No large drawdowns in History - ability to take reasonable size losses

Here are the raw results, those with an asterisk (*) are demo-worthy:

Rascave - Large open losses - almost -3000 pips
LowestDD - Large open losses - over -5500 pips
Coolie1997 - Different pairs, worthy of a demo account - 83% win rate *
scalp trades - He got whacked by GBP recently, I've seen that movie too.
pipking - Promising if not for large losses in the history - 400 pips, -500 pips
Got pips? - Large open losses - almost -1400 pips
Trendcatcher - Looks good - only 1 large open loss *
Euro-Asian Capital - Large open losses - over -400 pips
Pro-B5 - Still demo worthy, but small profits remain a concern *
Pipsvitamin - Large open losses - -5700 pips
FXMachine - Large open losses -8300
fxicb - Large open losses - 1460 pips
FAST PIPS - Large open losses - -4000 pips
AkhterFX - Nice record, only 1 large loss - looks like a winner!*
zun - Sometimes days/weeks w/o trade, but good win size!*
Signal - Large open losses, too many aliases
pippingfx - Large open losses - 11,900 pips
Active FX Trader - Looks too much like Bigwin, clobbered by GBP/JPY
GasCan69 - Keeps losses around -150 pips which is good*

As a result, I created 5 different demo accounts, with these providers:

Coolie1997
Trendcatcher
Pro-B5
AkhterFX
Zun
GanCan69

I didn't limit the accounts for multiple positions, but put a -180 pip stop on each position.

Let's see how they make out. Have a good week and happy trading!

Bigwin blows up, skips town

2009-09-25T14:11:00.000-07:00

Greetings to those of you brave enough to venture into the Zulu-jungle.

My one remaining Zulutrade provider Bigwin blew up this past week sending my account to fresh lows. This time at least the stops worked properly and held at -180 pips per position.

Looking at the chart, Bigwin went long GBP/JPY at 1.47 which was a reasonable support point on the chart and corresponded to the lows set back in July. But instead, GBP/JPY dropped like a stone and closed the week at 143 down a nasty 700 pips on the week.

Looking at Bigwin's overall affect on my account (chart above), he left me up $600 which was more than I ever made on any other provider, even after his recent losses.

What really got me about Bigwin (just when I thought I had seen it all with Zulutrade) is that he vanished off the Zulutrade system! He did the same thing with his other account Forex Bridge. Rather than giving us the macabre satisfaction of showing a spectacular wipeout (anybody remember High Rollers?), he skipped town!

This is reminiscent of the traveling snake-oil salesman who comes into town, sells everyone a bill-of-goods, then leaves just as he is discovered as a fraud and a charlatan.

On a more serious note - this is what the big guys call survivor bias. The accounts that show profit on Zulutrade are still there - and those who fail miserably disappear off the system. This tends to build up the winners and leave the rest to ignore the "graveyard" of hidden evidence we never get to see. Thanks to Nassim Taleb (author the Black Swan) for that one.

This is yet another opportunity for improvement in the Zultrade system - don't let people delete accounts at a whim - leave them around so we can see the full extend of the damage they caused.

One other thing I learned from my experience with Bigwin was that you have to pay close attention to what's going on in the underlying. When he had a drawdown back in early August on the GBP/USD move up to 170, I was on the case enough to cut his loosers and go the other way which helped to minimize the damage. This time I was asleep at the switch and not aware enough to see the major breakdown going on in GBP against all pairs.

The lesson here is that money is made when value is created. And value is created as a result of careful and deliberate effort expended by talented people. No effort expended, no care taken, no value created.

Anyway, tomorrow is another day! Enjoy your weekend.

Pro-B5 wipeout

2009-09-19T12:16:00.001-07:00

Greetings Zulu-fans. Well all good things come to an end, and the recent love-fest with Zulutrade provider Pro-B5 has come to a nasty conclusion. After last week's -174 pip drubbing, I was still in the money using Pro-B5.

This week had a series of 3 GBP/JPY trades (2 lots each) that hit my account hard, -172 pips, -124 pips and the last one (-500 pips). Now recall that I had a -180 pip stop in place, so the first 2 losses are somewhat understandable. But for the last trade, I would expect the most I would loose would be 180*2 or -360 pips, right? Wrong. I woke up Friday to find myself down a nasty
-500 pips on that last trade. I've learned from experience not to bother asking Zulutrade support, since it doesn't make any difference.

So at this point, Pro-B5 has cost my account almost -800 pips and that's more than 3 times as much money as he ever made for me. So for now, he's out as a provider, and I will have to put my faith in my one remaining provider Bigwin. Bigwin managed to side-step the nasty drubbing the GBP took this week.

BTW - I'm really starting to despise GBP/JPY as a pair. It has a very nasty habit of making big, unpleasant account-draining moves. Contrast that with GBP/USD or EUR/USD which seem to make more measured moves.

The only bright spot for the week was the equity market where I had a pretty good week. Check out my stocks blog at http://tcxsystems.blocks.com/.

So for now its back the drawing board. Enjoy your weekend.

Pro-B5 takes a hit

2009-09-12T17:37:00.000-07:00

Welcome back Zulu-traders.

One of my favorite providers Pro-B5 took a bit of a hit early this week. After about 3 months trading without more that a 15-pip loss, Pro-B5 took an 85-pip loss on a GBP/JPY trade this past Monday.

This loss hit me twice as hard since I recently updated him to 2 lots. So instead of loosing -85 pips, I lost -174 pips. I can't blame anyone but myself for that one. But undaunted, Pro-B5 got right back on his horse and picked up another 44 pips before the week was out. He may have picked up a bit more, but I had him set to 2 lots with but limited to 1 open trade.

If you've been reading this blog lately, its developed into a bit of a love-fest for Pro-B5. All the blog comments regarding Pro-B5 have been positive with one writer saying Pro-B5 was his "last hope for Zulu." So does this loss tarnish his record in any way? Let's put it into perspective and examine his actual performance in my account over some longer time periods:

-130 pips - This past week

-102 pips - September 1 through today

+ 30 pips - August 1 through today

+139 pips- June 1 through today

This isn't even a fair comparison since i've had him on 1 lot through the summer and just recently upped him to 2 lots. So his gains in July and August were on one-lot, but this recent loss was a 2-lots. Take a look at his public results and find his performance was even better than my actual results above.

So what's the take-away?

We all take hits in life and certainly in trading. The measure of a true winner is someone who can take a hit, then get up, brush themselves off and get back in the game. For Pro-B5, that means slow, methodical recovery of losses. He has shown the ability to do so in the past - and let's hope he keeps it up!

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

Watching the Gas Can

2009-09-09T09:39:00.000-07:00

Greetings from the land of Zulu.

I've been watching a provider called Gancan69 since I stumbled upon him on Twitter under the keyword Zulutrade. That's one of the great things about Twitter is that you can free-form search the Twitter universe and see everyone's tweats - bypassing the tyranny of the Google search engine.

Anyway, I added Gancan69 in a demo account back on 8/21/2009, two lots max with a 180-pip stop. Since then he's netted 219 pips. Out of 18 trades, he's had 14 winners with a max drawdown of -125 pips where he closed a loosing trade. His performance might be characterized as "lumpy" in that he tends to take larger losses than some other providers. But if the profits are larger also, it should work out on balance.

A few observations. First, he's able to take a loosing trade which puts him above 95% of Zulu providers. Second, he is able to take a profit of more that 15-20 pips. One frustrating element of being a Zulu customer is that providers will routinely risk 75-100 pips etc, then when the trade goes their way, they take a 15-20 pip profit. Under those parameters, the provider would have to win on 80% or better of trades just to break even. Gascan isn't afraid to let his winners run which is key to survival in trading. Most Zulu providers will be happy to take a profit whenever they get it because - after all - they get paid per transaction.

From the larger perspective, Gascan has been on Zulutrade for 11 weeks, he has 84 subscribed users and a 77.3% win rate. I'll be watching Gascan to see how he makes out going forward.

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

Zulutrade - Dialing up the risk

2009-09-06T05:19:00.000-07:00

Greetings Zulu-fans.

Here's an update on performance of my 2 favorite providers - Bigwin and Pro-B5. This past week I realized that after Bigwin's early August drawdown, I lowered him to 1 lot. He has since regained his footing and this setting was causing me to underform. So I re-updated him to 2 lots.

Similarly, I updated Pro-B5 to 2 lots per trade (with a max of 2 lots) since he rarely opens more than one trade anyway. Stop-losses on both providers are set to -180 pips.

The graph above shows Bigwin's performance from August 15th through September 4th inclusive. He netted 148 pips without a single loosing trade and a max drawdown of -28 pips. I would have made about twice as much with my new size settings. In fact about half of that (71 pips) was made in this past week with the new 2-lots setting.

Pro-B5 also had a solid performance netting 63 pips over the same 3 week period with 13 winning trades and 2 loosing trades. Maximum drawdown was -74 pips.

Let's face it, Forex trading is a minefield, and prices seem to slosh around in wide range and shake out as many players as possible.

Both Pro-B5 and Bigwin handle this risk by taking positions only for short periods of time and staying out of the market most of the time. Also, they seem to have relatively good entry criteria which lead to high percentage win rates and low drawdowns. Pro-B5 has an 85% win rate and Bigwin has a 76.4% win rate.

I regularly scour the top 100 Zulutrade providers to find providers meeting my criteria and currently, I can't find any providers better than Pro-B5 and Bigwin!

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

Zulutrade and Case Sensitivity

2009-08-30T09:41:00.000-07:00

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 ™

2009-08-24T17:11:00.000-07:00

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

2009-08-22T15:06:00.000-07:00

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

2009-08-06T17:19:00.001-07:00

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

2009-08-05T05:24:00.000-07:00

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/.

Zulutrade meets Twitter

2009-07-09T18:34:00.000-07:00

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

2009-07-09T16:23:00.000-07:00

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

2009-07-06T02:50:00.000-07:00

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.

Hitting my Zulu-stride?

2009-05-24T07:13:00.001-07:00

Greetings fellow Zulu-traders-

I'm on the second full week of my new wide stops (-500 pips) approach. I went into last weekend with a loosing long GBP/JPY position, down about -150 pips. I woke up pleasantly surprised to see the position up +100 pips!

From there Oxford forged ahead and picked up about 215 pips for the week.

We had a big rally in the GBP/JPY with Oxford buying all the way up. In fact he entered at 143.91 and ended up taking a 29 pip profit on that position. Had he stuck with that one position, the would have made over 600 pips on the week since GBP/JPY closed over 150.0 for the week.

I even pulled down 132 pips with manual trades, picking up on Oxford Global's long GBP/JPY positions where he took profits too soon. I also went against him on the last trade of the week and took a 32-pip profit where he went short GBP/JPY at 147.71. This trade turned out to be a bummer and I went into the weekend down over 300 pips for this position nearly wiping out my gains for the week.

So now GBP/JPY is at important resistance at 150. Oxford is short from 7 units all the way from the 147.80 level. If GBP/JPY breaks decisively above its recent high at 151, then i'll get stopped out for another -500 pip loss. I'm pulling for a retracement to the 145 level. If that works, then i'll get my account back to the $7500 level, about $2500 down on my original investment of $10,000. Time will tell.

Best of luck, Zulu-fans.

Zulutrade - pulling all the stops

2009-05-17T18:19:00.000-07:00

Greetings fellow ZuluTraders-

As of my last post, I decided to "pull all the stops" and go with Oxford Global FX Group and my old buddy Hehehe. I figured that the only way to make any money with this service was ease the stops up to -500 pips and see if these guys could make any money.

Hehehe came in on 4/29 and sold CAD/JPY at 80.31. The trade promptly went against me and a just over a week later, I got hit for a -500 pip loss. I figured this had to just be bad luck, so I stuck with it. First trade with a -500 stop results in a -500 pip loss - how's that for bad luck?

Back to Oxford Global Fx, starting on 5/7, Oxford started a run where had a total of 7 straight winning trades he pulled in +187 pips. After being a persistent GBP/JPY seller, on 5/12 at 2:44 PM Oxford switched to a GBP/JPY buyer which was completely counter-trend. But I stuck with it anyway and within 2 days, I got hit with another -500 pip loss. Figuring again this was an exception, stick with Oxford Global and on the next trade, he pulled in a 29 pip gain. Then Hehehe came in with a 20 pip gain after being down almost 60 pips.

To add insult to injury, Oxford Global bought GBP/JPY again and now i'm sitting at 6,900, down over $3,100 dollars since my Zulutrade start late last year. Oxford Global (now the provider with the 3rd highest number of users on Zulutrade) has clearly fallen off the rails and re-inforces my theory that there's no such thing as a safe provider.

Similar to Ryrat's observation, Oxford has clearly lost his discipline and is now being wagged by the tail of the Zulutrade dog. He has 491 active users and of is 4959 closed trades, he now has minus 3619 open trades. That clearly put him into risky provider status.

One thing i've noticed is that all successful Zulutrade traders take small profits and let the profits run large. So i'm going to create a demo account and reverse both Oxford Global and Hehehe. I'm going to put in a 200 pip-limit and let them cut their own losses.

I'll keep you all posted, thanks for reading.

Zulutrade gone under?

2009-05-03T16:51:00.001-07:00

Hi all. I took a look this Sunday evening (May 3, 2009) and the Zulutrade website appears to be totally defunct. No answers from any of their Web sites.

Next step is to follow up with the FCM and see what are the status of my open trades, and to go into recovery mode.

Looks like the Zulutrade ship has been scuttled. All the best in your future Forex Endeavors!

EUR/USD Ranger - Week 3

2009-03-29T12:09:00.000-07:00

Greetings fellow Zulutraders. For week #3 of my EUR/USD range trading system, I picked up an unimpressive +21 pips. Even less impressive was than out of 15 trades, I miscalculated the stops of 4 of the 16. For 2 of the 4, that resulted in getting stopped out with a -20 pip loss instead of the full -120 pips. On the other 2 cases, I set the stop at a value greater than 120 pips and ended up winning +50 pips on a trade that went -125 pips against me before coming back for a 50-pip profit. If I figure correctly, I would have been stopped out at -120 pip losses for the 2 that I got out without only a 20-pip loss. So I would have done much worse without those mistakes.

In retrospect, Monday, Tuesday and Thursday were good range trading days, and I closed 100 pips each day on those days. But Wednesday and Friday were strong trending days - to the downside for EUR/USD which caused range trades to buy below the market, and sell even farther below when EUR/USD broke down.

Lessons learned - calculate the stops carefully. How hard is it to subtract 120 pips from 1.3600 - come on, its 1.3480 not 1.3580. Second, don't trade a ahead of big economic reports. Keep on top of the economic events calendar. Big trends can start (or continue) once those reports are released. Range trading works better in the sleepy in-between hours of 12 noon EST and say 2AM EST. By then the London guys have packed it in for the day, and most economic data has been released. Third, I need to start looking at hourly ADX, or some other trend activity indicator to avoid range trading when there's a strong trend in place. More to come on that.

HomerPoet morphs into mmtwta

2009-03-29T06:18:00.000-07:00

Greetings fellow Zulu-Traders. By now you must all think i'm obsessed with HomerPoet since I blog about him repeatedly. Well he has made some progress rebounding from some recent drawdowns. Even so, he's down over -1500 pips from his top at +2000 pips which puts him into the risky provider category. Despite these blotches in is record, he still has better than 95% profitable trades. In any case, due to these stains on his record he probably figures its better to make a fresh start to gain a new following. Thanks to the Zulutrade's feature we know when an old provider assumes a new identity. As of last week, Homerpoet re-emerged under the new name mmtwta.

So far he's off to a solid start with 5 straight profitable days picking up +325 pips. Also, he's got 100% profitable trades which should garner some attention. This time he's taking between 25 and 30 pips profit per trade. I would like to see this number much higher - closer to 50 pips. That will help to overcome that occasional excursion beyond -150 pips which would be my expected stop.

I added mmtwta for one lot with a 150 pip stop. I live to regret it, we will see.

High Rollers on the rebound?

2009-03-29T03:45:00.000-07:00

Zulutrade provider High Rollers is a great example of how good (and bad) a signal provider can be. Me and a group of other bloggers traded High Rollers signals for weeks with good, profitable results. In fact at one point in mid-march, he had accumulated over 5,700 pips over a 3-month period on Zulutrade without a single loosing trade! Even more impressive, every one of his trades had less than 150-pips drawdown. He seemed to be a money machine, and while he only seemed to come out of hiding on Thursday late in the day UK, time, who cared, he was profitable and in a big way!

Well all was happy in Zulu-land until the fateful day of March 12, 2009 when High Rollers made a series of trades selling GBP/JPY. Those trades went horribly wrong and instead of cutting losses, he went most of them run to the automatic -500 pip stop built into the platform. One some of the trades, he lost nearly -1000 pips! The graph on left really tells the story. He went from +5700 pips to -5600 pips or an incredibly -10,000 pip loss in less than a 2 week period.

This move did some damage to my account and nearly torpeoded by Zulutrade experience. As is stands now, i'm still hanging on by a thread and down just over 20% from my initial $10,000 investment. To be fair, I made some manual trades to try and make up for those losses, and my manual trades went bust also. For the gory details, see my previous post called "Account Blow-out".

Well, High Rollers seemed to snap out of his loosing ways on 3/25 and cleared his books of all the losing trades. On 3/26 and 3/27 he made back about 400 pips in a 2 day period. Granted, I would not have made that much since I would limit him to 2 open positions. But in either case, he seems to be on the rebound. I may add him back this week and see what happens.

2 items for consideration:

1) When a provider seems to go "off the rails" like this, how about adding him in but using the "reverse" button on the Zultrade platform. Does anybody have any comments on this tactic?

2) Since High Rollers still has a relatively high number of subscribed users (236) he still has a high-incentive to trade his way back to profitability. Human nature is to shy away after a large loosing experience and come back only another good track record has been established. But by then, much of the gains have already been made back.

So for now, the jury is out on whether High Rollers has put in a bottom. Let's watch the coming week for additional signs of recovery.

Click here to open a free Zulutrade account

Oxford Gobal FX Fund is back!

2009-03-28T12:27:00.000-07:00

After a one-month hiatus, Oxford Gobal FX Fund is back!

I wasn't paying any attention to my account on Friday and I took a look on Saturday afternoon and was pleasantly surprised to see a 9 pip-winner!

Yes, I know global is spelled wrong, but that's the way its listed. I don't think Gobal is even a real word, tried to look it up and found nothing.

Oxford is now the last provider standing in my account. Perhaps with some monitoring of this provider, I can get my account back on track!

Click here to open a free Zulutrade account

EUR/USD Ranger - 3/23/2009

2009-03-23T02:50:00.001-07:00

Monday Morning March 23, 2009. EUR/USD showing excellent range trading conditions with a nearly 180-pip range. Entering an order to sell 1 lot at 137 and buy one lot at 136.

We'll see how it works out.

Zulutrade - Food Chain

2009-03-22T17:01:00.001-07:00

Greetings Zulu-Traders-

I said in my first post that Zulutrade is a fascinating on-line economy. Every economy has it winners, losers and more to the point, its food-chain. Its important to understand where you fit into the food chain to surmise your odds of making a profit.

At the top of the Zulutrade food chain in the Foreign Currency Merchants (FCM) themselves. Tops among FCM's is FXCM - by size many times larger than all the other FCM's combined. Their resources, tools, and staff are unmatched in the retail FX market.

The FCM is compensated for making a market in the currency by the spread - or the difference between the rate at which you buy and sell. FXCM originally started with a fixed-spread going down the 1/100'th of a cent per currency. For example for EUR/USD, they would sell to you at 1.2745 and buy from you at 1.2748 or a 3-pip spread or 0.03 of one cent.

After some pressure from the competition, FXCM went to a 5th decimal place and the spread started to look more like 1.36117 by 1.36153. But while they added a decimal place, they also introduced the "dynamic spread." Instead of the spread being a fixed amount, they changed it to a dynamic spread that could be widened when activity was slow and narrowed when activity and competition was more acute. I haven't studied the spread and its variance because it doesn't play heavily into my figuring as to how I can profit from FX. Even so, its good to be aware of the spread and it's always implied as the cost of doing business in FX.

While the FCM can sometimes be your enemy in the FX market, for the small trader like myself they are a benevolent dictator. They are available 24x5 to execute a position electronically. While the market is open, the will honor stops on your positions, even if the market gaps through your price. For example, if you are long EUR/USD at 1.3550 with a stop at 1.3420, and news comes out and the market gaps down to 1.33, they will honor your stop at 1.3420. Try to find that type of treatment in stocks, options or futures! Forget about it, doesn't exist!

The FCM works against you in slow markets when using tight stops. Let's say you see a quiet, low volume and downtrend in EUR/USD and you short at 1.3550 with a stop at 1.3570. Even though there's little activity, and not much going on, it's typical to see a quick (one tick) gap up to 1.3570 to take out the stop followed by a quick return to the downtrend. Bottom line - don't use tight stops especially during slow times, because the FCM will pick you off.

Next in the Zulutrade food-chain is Zulutrade themselves. They are the true pioneers in FX-autotrading and I owe my ongoing interest in FX and this blog to them. Zulutrade takes a part of the spread normally taken by the FCM. In other words, instead of the FCM taking 3.5 pips per trade, FCM gives 1.5 pips to Zulutrade for acting in the capacity of a "referring broker." Zulutrade's cut is the 1.5 pips per trade, and they profit whether the signal provider makes money or not.

Next on the Zulutrade food chain are the Signal Providers. They are the worker-bees the Zulutrade system and they take 1/2 pip per lot or 50 cents per mini-lot or $4 per full-size lot. I suspect a small set of Signal Providers make most of the money on Zulutrade. Their goal is to entice as many Zulutrade users as possible to follow their signals. They make money per-transaction (as opposed to profit earned) so they have incentive to make many trades and show the maximum profit when reviewing their trade history.

Unfortunately, signal providers often stick with losing positions for days, weeks, or even months. Classic example, is provider Auto-fx who has an incredible ROI, and an incredibly high profitable trades (87%). He will put on a trade, and then just wait, days, weeks or months for it to become profitable. Looks good on paper, but its a lousy system in reality. A classic rookie mistake is to review a provider's Zulutrade history, be enticed by their performance, then be unpleasantly surprised by a 300 pip gap down - usually first thing in the morning.

Next on the Zulutrade food chain are the affiliates. These are people who have signed up to promote Zulutrade to their contacts, friends and family. I signed up to be a Zulutrade affiliate and as a result, I would get 0.4 pips (about 40 cents US) per transaction for people I signed up. Not a bad deal overall considering the entry costs are nil. Just sign up as an affiliate and ZT will give you a web site like mine at http://zulumon.zulutrade.com/. It's a great concept in multi-level marketing. But if you can't make money from Zulutrade yourself, referring your friends and family is a sure way to sour relations with your friends and family. As Suze Orman says, People first, then Things, then Money.

Finally on the bottom of the Zulutrade food chain is you the Zulutrade auto-trader. Money from your trades pays everyone else up the food chain - whether you make money or not.

I don't deny that Zulutrade auto-traders have made money However, I haven't found anyone who has actually made money using Zulutrade so I suspect they are scarce. Don't get me wrong, I like Zulutrade and wish them success. Perhaps I have a future as a Zulutrade signal provider - up 2 levels in the food chain from my current spot as a (defunct) Zulutrade investor!

Go slow and be careful!

EUR/USD Range trading - more questions

2009-03-21T05:38:00.001-07:00

Hi all-

This week's experience with range trading brought up a few questions I hadn't considered. Here's how I dealt with them:

Question - What happens if the range is less than 100 pips when you wake up ((like it was Thursday AM)?
Answer - Wait for at least a 120-pip range to emerge before calculating any entries/exits. Check back at 10AM.

Question - What happens if you get stopped out on one or more positions? Dealing with a limit of 2 lots max.
Answer - Don't take any more trades that day. Wait for a new range to establish itself the next morning.

Question - What happens if EUR/USD is close to the high (or the low) of the day when you calculate the ranges?
Answer - This might be a trending day, so step back and look at the large time frames. If you suspect a strong trend is in place, don't trade. Otherwise, wait for a 30% range pullback off the high, then add 50 pips and that's your sell signal. In other words, sell above the market or buy below the market.

Never enter close to the high (or low) of the day, since a pullback is likely. Instead, wait for a retracement. Don't take any position that attempts to pick a high or low. Wait for a pullback, you will most likely get it.

Good trading all.

EUR/USD - Range Trading - Week 2

2009-03-20T17:21:00.000-07:00

Greeting fellow Zulu-Traders.

It was a wild week in forex, and I had a decent week #2 with my range-based EUR/USD trading system. As you recall, the idea is to pick a range-based entry into EUR/USD and immediately enter a 50-pip limit 120-pip stop. The idea being that if you are going to risk 120 pips on a trade, you have to make at least 50-pips on profitable trades to keep a decent chance of making any money. Keeping that ratio, if you win on 3 out of 4 trades, you will make money.

The week started off well with good range-trading conditions from Sunday evening EST until Wednesday AM. By Wednesday I had bagged 296 pips for the week with with 6 straight winners. I knew the US Fed news was due at 2:15 EST on Wednesday. But since they had already cut rates to 0%, what else could they do? Besides, EUR/USD looked pinned at 130 even. Having made money on both sides of 130, I went both long and short EUR/USD at 130 with a 50-pip limits on either side. Plus I had an order to go short at 130.80 from earlier in the week.

After the Fed news came out, EUR/USD had a huge 1-day rally and printed as high as 135 on Wednesday. I took a profit on the long position from 130, but got stopped out of both the short position at 130 and again on the short position at 130.80. Even so, based on the profit/drawdown ratio, I was still netted 160 pips for the week even after the two 120-pip drawdowns!

Thursday was a consolidation day and I managed to pick up another 50-pips. By Friday, excellent range-trading conditions had returned and I pulled out another winner. What the record doesn't show is that I went long again at 136 and came about 2-pips from taking another winner at 136.50. I stayed with that position and EUR/USD went out at 1.3563, down about -37 pips from my long entry. I'm hoping to see 136.50 (limit) before we see 134.80 (stop). We will probably have an answer by Monday morning EST.

Range Trading EUR/USD

2009-03-15T10:45:00.000-07:00

Greetings fellow Zulu-traders.

One thing I learned from my Zulutrade experience is to pay attention to amount of profit taken on trades versus the amount of drawdown as represented by the stop-loss value.

Trading with HomerPoet, I was using a 150-pip stop and HomerPoet would routinely take profits at when was up +15 pips. He later increased it to +20 pips. That means that Homer Poet would have to have 8 profitable trades for every one looser to do better than break-even. That wasn't a problem for the most part and at one point he has as many as 19 straight winning trades.

But it go me to thinking - does it make sense to risk $150 to make only $20? It is reasonable to assume you winning trades are going to outnumber you loosers by 8 to 1?

So I started playing around with a HomerPoet like system in my demo account this past week. I would to is pick an entry point in EUR/USD and immediately enter a 40-pip limit and a 120-pip stop. At times, would go both long and short at the same time and enter the same limit to stop ratio and just let it ride.

The results were impressive. It took 14 trades this past week and got stopped out twice with a -120-pip losses but closed out with a profit 12 times for a total of +600 pip profit. Had I used Homer Poet's 20-pip limit, I would have just broke even. Once I spaced out an took 2 100-pip profits because I miscalculated the stop.

I play around with 2 alternatives later in the week:

1) Increasing the limit from 40 pips to 50 pips

2) Entered orders using thing range-based formula. I would do the calculations when I woke up New York time when the EUR had already been active for a few hours:

Basically calculate the daily range by subtracting the low minus the high. Then add 1/2 the range to the current price to get a buy point and subtract 1/2 the range from the current to get a sell point. Do the same except sell when the price is 1/2 the days range above the days high and buy when the price is 1/2 times the range minus the days low.

Note this strategy is completely range agnostic - it pays no attention to the trend, support, resistance or anything like that.

So i'm going to run a similar system in my demo account for a while and see how it makes out. Let me know if you can think of a smarter entry algorithm. Good luck all!

Account blow-out

2009-03-14T11:55:00.000-07:00

Greetings fellow Zulu-traders. I'm sorry to say that my Zulutrade experience has come to unpleasant conclusion.

I suspect the same happens to many other fellow traders/bloggers including our friend over at http://www.zulutradeblog.com/. His last post was on February 25, and we haven't heard from him since. He has probably blown out as well. So rather than leave you all wondering what happened, here's my story. Perhaps you can learn something to avoid a similar fate.

All was going well as of about Wednesday of this past week. My account was standing at about $9200 after an initial investment of $10,000 late last year. I had been through a series of providers with some questionable characteristics. I had been as low as $8600 and was struggling back to even and about 2 weeks ago was back up to as high as $9600. I had settled on the 3 providers listed last week and was holding my own.

Between 3/9 and 3/10 HomerPoet pulled in 4 straight wins and I was looking good. All was well until Wednesday when he went short at EUR/USD at 127.10. That trade went badly wrong and I was stopped out for my -150 pip stop times 2 or a $300 loss. I did a manual trade and tried to go short 2 EUR/USD figuring my stop was just a bit too tight, but that didn't go well either and I lost about 24 pips on that trade as well.

On Wednesday, our friend High Rollers came in a day earlier than usual and sold GBY/JPY in the late morning EST which is his pattern. This time he appeared to struggle and his first 2 trades went -66 pips into the red, but I hung in there and he came back and closed them for a small profit. the same thing happened early Thursday.

He could have call it quits then, but he came back and sold GBP/JPY again at 134.70 and again and 134.85. This time his luck had run out and the dealing desk at the FCM were finally in charge, ready to get their revenge and run some stops. Run they did and by the end of the day I was dangerously close to my 150-pip stop at about 136.25. Figuring this run had to be over, I raised by stop to 200 pips at 136.75 and tried to hold on. It amazing how the charge toward 136.26 seemed to slow as soon as I pulled my stop.

At this point, GPY/JPY began to slow and I was in all-or-none mode because I knew if I was stopped out of High Rollers, I would be down to $8500 and close to my mental stop-loss for this account of about -15%.

So I took one last chance and sold 2 more of GBP/JPY at about 135.98 (this time with -150 pip stop) figuring a move back to the low 131 where it was just 2 days prior would bring me well back into the green. In the midst of the Thursday action, HomerPoet came back in and sold EUR/USD again at 1.2828 and that was going badly also. So at this point, i'm short 4 GBP/JPY and 2 EUR/USD, looking at about a -700 loss if just the GBP/JPY's go bad. At that point, I did what every currency trader must to do at some point - I went to bed!

Friday morning came around and I was nervous logging in because I knew it could be ugly. Sure enough GBP/JPY rallied again and look out my 200 pip stops in addition my 2 additional trades put on. At this point, i'm down at about $8100 and well below my walk-away figure.

At this point I put disabled my account and waited for HomerPoet's trade to stop out. As of Friday, EUR/USD was at 1.2918 with my stop at 1.1978. I expect i'll be stopped out of this before Monday morning in NY and leave my account with just under $8000.

Lessons learned:

- There is no such thing as a safe signal provider

- Its not smart to let other people trade your money for you because you can't tell when they are just being lucky - and when their luck is eventually going to run out which everyone's luck eventually does. Remember these people could be playing with fictional money and can take a whole lot more pain than your live account can.

- Currency trading requires large drawdowns - don't even bother with a stop less than -150 pips. And -150 pips probably isn't large enough.

- Don't try to fight the market and trade your way back to even because the market owes you. It doesn't and it won't pay you back on trades 5-6 just because you lost on trades 1-4.

- Based on a mini (10K) position size, $1,000 isn't enough. In fact, in my case, even $10,000 wasn't enough.

I haven't given up on currency trading, and i've learned alot from Zulutrade, but i've given up on trying to make money by picking signal providers. More to come.

Current Providers - 3/9/2009

2009-03-09T18:59:00.000-07:00

Here are my currently selected providers:

Oxford Gobal FX Group - 1 lot 1 Max Total Open trades - 150 pip stop
Homer Poet - 2 lots - 1 Max Total Open trades - 150 pip stop
High Rollers - 1 lot - 2 Max Total Open trades - 150 pip stop

Click here to open a free Zulutrade account

Update on High Rollers

2009-03-09T17:16:00.000-07:00

Here's an update on last week's observations regarding Zulutrade provider High Rollers.

As expected High Rollers was idle until Thursday. But this week, he came in earlier in the trading day at about 8:30 GMT or about 3:30 AM EST. He took only 2 trades, one at 8:30, and another at 8:35. He exited both positions at 8:38 and took 22 pips on the first trade and 28 pips on the second trade. I was setup for 2 lots per trade, but limted to 1 open trade per provier per currency, so I bagged 40 pips in an 8 minute period!

In terms of lessons learned, we clearly have the correct day of the week, and the correct half of the day (AM GMT), but we are still missing the entry signal. Taking a look at the chart, we are looking at a triple top pattern playing out over an 8-day period. The sobering part of the analysis is that the entire week's trading activity happened within the single bar under the blue arrow. How's that for selectivity?

The only downside is that good currency trading can be pretty boring most of the time. I am having a similar experience with HomerPoet, but i'll cover that more in another post.

Click here to open a free Zulutrade account

Providers i've blown out of

2009-03-05T05:49:00.000-08:00

Here are a list of all providers I have blown out of:

Auto-Fx
Conciendo el Forex
FxMarkets,
Lost Treasure
JZFX
Pasto Pasto
FxGrandius
Hehehe <- still like him though
ProB5
Probability based Wave 5
FxCompass
LoCuS4ALZ
ScalperGirl
Trendpipeater
New Signall
shorttrade

FxCompass blow-out

2009-03-05T05:21:00.000-08:00

I added FxCompass on 3/3. He had a fairly low winning trade rate (41%), but I was impressed with the way he took losses and didn't let a trade go more than 100 pips against him.

He lost on his first 2 trades, and I was surprised he took the losses. Homerpoet would just let it ride. Well take losses he did, on the first 2, buying EUR and GBP in a sliding market. On the third trade, he went the other way on GBP selling and took a loss on that one as well. So now he's trading the same issues in opposite directions the same day and loosing on both sides! That's a red-flag for me.

I figured after 2 straight losses, he was due for a hit. In his history, he never had more than 3 straight loosing trades.

So he went long EUR and GBP again, and this time made some pips. The EUR position was up as much as 80 pips and the GBP position up as much as 40 pips. At this point he had profit, but not enough to make up for the prior losses. But instead he let these positions erode into yet another another loss.

At this point I figure he's broken up with his girlfriend or something and is taking it out in the Forex market. I gave him one more try, and he lost again on 2 trades. At that point I had to pull the plug.

This provider cost my account -356 pips in one 24 hour period. Show again what a minefield picking providers can be!

GBP/JPY - Fascinating Observations

2009-03-01T13:42:00.001-08:00

Signal Provider High Rollers once again had an amazing week and has earned by almost 600 pips since adding him back on 1/27 without a single loosing trade. Even more amazing, he's done it without more than 100 pips drawdown on any given trade! This performance begs the question - how does he do it?

Well, as Yogi Berra said, "You can observe a lot by just watching." Looking at trade history, High Rollers came in and sold GBP/JPY on the past 4 Thursday mornings at about 11AM EST. This would correspond to about 4PM GMT, right about the time the UK-based traders are calling it a day - and before the Asia based traders are coming in. For me, that's just too much of a co-incidence.

I took at look at the charts, and for the past 3 Thursdays GBP/JPY topped out late in the morning on a Thursday. Maybe they have to square positions ahead of the weekend? Maybe its options positioning? Maybe its what time High Rollers gets home from work? Who knows, but it seems to work.

This chart shows the last 2 Thursday at 11AM. The prior Thursday 2/12 also had a similar pattern. Even more interesting is that provider No Drawdown has also sold GBP/JPY the last 4 Thursdays late in the day - although much later in the day than high rollers. Based on the action, there's a solid 12 hours of downside action after the Thursday top.

Let's watch for this coming week. If this works out, then we could make most of our money in the trading week between Thursday noon and Friday noon EST.

FxArena Mystery Trade

2009-02-26T13:05:00.001-08:00

Some Zulutrade users have reported trade disputes - situations where stops were not honored or something went amiss that ended up costing them money. I had a related issue this week.

I was watching my account pretty closely on Wednesday after the Pro-B5 blowup. All of the sudden I saw a loss for $-84 come out of nowhere. This struck me as strange since this wasn't close to my stop of -150 and providers generally avoid losses like the plague. I checked the trade history, open positions, and could find no public evidence of this trade anywhere.

I sent an e-mail support@zulutrade.com and they gave a short reply about a stop being hit. I replied that this was nowhere close to my stop level. They came back the next morning asking for the broker ticket # (which I had already sent them) and then heard nothing back.

To this day I still don't see any evidence of this trade in the public record. I suspect it was a mishap where the trade went into the system and got lost. It didn't appear anywhere until it got closed out.

Anyway, be aware that this is one of the risks of dealing with Zulutrade, that their system could screw up and you could loose money as a result and they have no obligation to reimburse you. Fortunately, it doesn't happen often and my other signal providers quickly made up for the loss.

Shaken out of Pro-B5

2009-02-26T08:06:00.000-08:00

After last week's revelation that Pro-B5 was the conservative arm of "Probability Based Wave-5", I added Pro-B5 on Monday with one lot and 150 pip-stop

He scalped me a few pips on Tuesday and all was well in Zulu-land.

Then came Tuesday and he did it to me again! He went long GBP/JPY at 141.70 at the worst possible time. To add insult to injury, he added positions on the way down. Fortunately, I was limited to 1 lot, so damage was minimized. My 150-pip stop was hit later that morning. This was eerily reminiscent to a recent trade he made by going short GBP/JPY at 118.95 (at the exact bottom) under the provider Probability Based Wave-5.

I went back and checked subscribed counts and Probability Based Wave-5 has only 38 subscribed users, while Pro-B5 has almost 300 subscribed users! Naturally being drawn to the account where he's going to make 10 times the profits, he migrated his aggressive strategy over to this supposedly conservative account! Goes to show you what a minefield picking providers can be!

Lesson learned is that this provider is too risky for me. I want to have open a most 2 lots per provider with a 150-pip stops so Pro-B5 is not for me. I removed him on Thursday. He did make a few other winning trades, but overall this provider cost my account -80 pips.

Click here to open a free Zulutrade account

Signal Providers revelation

2009-02-22T11:59:00.001-08:00

This past weekend Zulutrade activated a feature that let's you see what signal providers are using multiple names. This is important because it easier to really know who's who.

The biggest find was the following:

4X Finance, 4X World, FxMarkets, GBP$, GBP/JPY Club, JackPot, Never Lose$, PipGenerator, Pound Cake, Scalpers GroupClub4x

Are all the same provider!

This is significant because these are among the top providers in all of Zulutrade historically. This provider is almost exclusively a GPB/JPY seller and will do well when GBY/JPY is in a downtrend - which it was for much of last year.

Beware, however, because this provider likes to keep large open losses (as large as -1000 pips) to keep his win % so high. So don't use this provider unless you can stand large open losses. You may make money short term, but eventually, you will go into an extended drawdown.

Click here to open a free Zulutrade account

Selected Signal Providers - 02/22/2009

2009-02-22T11:49:00.000-08:00

Here are my currently selected signal providers:

Live Account
Oxford Gobal Fx Fund
JzFx
High Rollers
FXArena
HomerPoet

All providers set to 2 lots max except for Oxford and JzFx set to 1 trade open max. Stops set to 150 pips on all providers.

Demo268
FxCompass - FX Compass has done well
Averaging - not so well

Demo664
OneSignalOneProfit - Climbing out of a drawdown impressivly
Forex Builder - Loosing
FXArena - Looking good

Demo067
Shorttrade - Shortrade is a winner
10pips - nothing doing

Demo761
Forex Guru - Can't figure this person out its a guy, girl what

Demo814
Never Lose$ - Same as FXMarkets
No Drawdown - Both had a good week

Demo033
Cobotan - Very consistent but drawdowns too large for my taste

Demo150
Homerpoet very consistent

Demo746
High Rollers rules supreme

Demo226
Firepips doing nothing

Demo130
Mayfair swing
Magic FX both not impressive

Click here to open a free Zulutrade account

Provider selection criteria

2009-02-22T09:39:00.000-08:00

Here are my critera for selecting signal providers. I'm a relatively conservative investor and I want to grow the account, as safely as possible with capital preservation a high priority:

1) No large, open drawdowns.

I avoid providers that hang onto large, loosing positions for weeks or months. Ideally the provider should have no open trades, since I usually do my analysis on the weekends.

2) Consistent effort

I'm okay with part-time traders, but I need to see at least one trade every 2 weeks or I assume the provider is disengaged.

3) 85% or better winning percentage

4) No "Painting the Tape".

Whenever I see an entire screen worth of the same trade, I assume the provider it taking multiple open positions. I'm limiting my trading to 2 open lots per provider at one time, so this is a negative.

5) No large drawdowns in History

Whenever I see multiple trades going more than -200 pips, in the account, that's bad. My stops are set to about 150 and those trades would all be loosers for me. Plus, I can't understand the fact that a trade would go that far against the provider without them closing it. I can't take those type of drawdowns.

6) Must have at least 3 weeks history.

7) Must have live, subscribed users.

Click here to open a free Zulutrade account

Top 10 things you need to know about Zulutrade

2009-02-22T08:48:00.000-08:00

Top 10 Things you need to know about Zulutrade:

1) Most of the providers are trading demo money.

They can afford to sit out large losses because they don't feel the pain.

2) Profits will likely be 1/10th of the demo account.

Demo accounts use full-size (100K) position size. Unless you will have 50K to invest, you will be using a Mini Account (10K) and the profits (or losses) will be 1/10th of the demo account.

3) The size of the loosing trades (amount lost) in most cases will be larger that the size (amount won) of the winning trades.

This doesn't mean you can't make money. As long as your winners outnumber your losers, you will be in the black! For example, you may have series of winning trades, and you are up 160 pips. Then a trade could come along where you loose 120 pips, and you are now back down to +20 pips.

4) Drawdown is inevitable.

Trading forex is extremely unpredictable, and even the best good traders will have loosing trades.

5) Beware of providers with very high % profitable.

They often leave trades open for as long as it takes for them to become profitable again.

6) Some providers trade under multiple names.

Zulutrade recently added a feature now where we know who is really who which is extremely helpful.

7) The Zulutrade platform has had some history of issues where trades were not placed or execute properly. If you loose money because of a glitch in Zulutrade's system, Zulutrade will not reimburse you for funds lost. This has not been a issue for me.

8) Currency trading is stressful and every unpredictable. If you are going to invest real money, start small and slow.

9) Zulutrade support can sometimes be spotty and I get the sense that is an extremely bare-bones operation.

I'm not too concerned about this because my money is with the FCM in my case FXCM which is safe.

10) Picking signal providers is a lot of work, and that's where I will try to help with this blog!

Click here to open a free Zulutrade account

Welcome

2009-02-22T08:20:00.000-08:00

Welcome to my blog regarding Zulutrade!

Zulutrade is a fascinating on-line economy that makes it easy to trade foreign exchange, without having to do to the trading yourself. Instead, you pick amongst Zulutrade's 100's of experienced Forex traders, and they do the trading for you. Best of all, its totally free to the investor and there are no maintenance, performance or other fees of any kind.

Imagine for a second the Zulutrade dream - people all over the world working hard to stuff money into your pocket while you go on with your life!

Well it sounds amazing, and it is. But of course, there are always "gotchas", things they didn't tell you ahead of time that you would only know having gone through it yourself. We'll i've been through it and this blog is dedicated to making it easier for you to be successful with Zulutrade. I'll tell you the low down and share my latest provider picks.

That's enough for now - may the pips be with you!

Click here to open a free Zulutrade account