Project Zulutrade

Over the past two months I've been copying the trades I place on my live account over to Zulutrade. My own account is less than $5,000 right now and while I am not afraid to trade moderately big on position size, it seems to me that my account is going to grow a lot slower than I would like.

So my plan has been to take whatever revenues I can glean from Zulutrade and use it to fund my own account so that I can eventually start trading larger position sizes without cranking up the leverage to dangerous levels.

Right now I'm trading 10 pairs all on one account. In testing my strategy, the various pairs tend not to march in lockstep where success is concerned. That is, when one or two are doing poorly, the rest may be doing average or better than average. The result has been a good pattern of success so far (you can check it out at http://www.zulutrade.com/trader/134464) but I am really wondering what it's going to take to break into the Top 10.

See, there's no real way to know all the variables that Zulu plugs into it's backroom algorithm for determining the ranking of various traders. Obviously absolute ROI, win rate, drawdown (both realized and floating), the number of winning months all go into the ranking, but really...the whole thing is very mysterious.

For example, look at the current signal provider in the #6 position, Call of Pips (http://www.zulutrade.com/trader/89291) as compared to GreenFX777-3 (http://www.zulutrade.com/trader/93709) who sits in the #34 spot. Both of these traders have multiple profitable months under their belt, both only have one losing month, both have a win rate higher than 70%. But why is Call of Pips in the #6 spot? The other guy, GreenFX777-3, has all of his winning months closing out in excess of 10% with most months higher than 20%. This is not the case with Call of Pips....so why is he ranking so high? His floating drawdown was worse too. Is it because Zulutrade likes to reward traders to put on a lot of positions and Call of Pips is sending in about 18 signals per week while GreenFX is only doing 12?

I don't really know, and to be honest, I think that there are so many variables that getting ranked in the Top 10 and staying there for any length of time might be a lot less straightforward than anyone would think. I do have a plan to try and overcome this so as to rank well against the competition, but it's going to be a few weeks before I can implement the strategy. As there's plenty of time, I'll not make this initial post overly long and will write out the strategy itself in a couple of days.

From there my purpose for this journal is to be a reference of my progress as well as try and see what type of things influence one's Zulurank. Perhaps, just as people have found the "secret sauce" for getting websites to rank well in google for specific key words, we can discover what the individual characteristics Zulutrade weights more heavily in building their ranking structure.

So any updates on your progress ? Your perfromance is a bit week in Febrary , many losses , but the last trades were good.

Bianco - thanks for chiming in. Yes, the system has been going through a down time. I've built it so that all of one's eggs are not in one basket. I also setup at least one trade on each of the ten pairs each day. Every now and then though, what will happen is the price on all 10 pairs will move in the right just enough to trigger an entry on every pair. Then price quickly moves against our intended direction and all 10 pairs fail on the same day. That's what just happened in the last day or so. It also happened once in January.

The good thing is that because every win is typically twice as large as every loss, you only need half as many wins to make up all that lost ground. You'll also have days where instead of every trade place in a day losing...they'll all win...with each win being worth 2x the value of a typical loss. When this positive scenario plays out, though, it's not as obvious. When all the trades go bad on a single day, there is an obvious streak of red losers, because they all happen in such a short period of time. Winning trades, though, take an average of 2 days to mature. That means that between the time the trades on an "all-winning" day cash out, two days worth of other trades will have been placed. The result is that there will be a sprinkling of losses and break-evens in between the various winning trades...unless you reorganize the list by time the trades are place vs. the time they are closed.

Anyway, the fact still stands that simply because this system trades so many pairs, these types of events are inevitable. Zulutrade followers seem to be particularly flighty so I think such patterns of system behavior will be a detriment to this particular systems popularity regardless of it's overall profitability. My new plan for tackling this whole Zulutrade thing accounts for this.

I'll post more later on that, but first I'm going to publish a series of posts related to the in's and out's of Zulutrade that I've observed over time. The metrics on each individual signal provider is the basis for how someone is going to rank on Zulutrade and there are a lot of misconceptions out there as to what the various figures displayed actually mean in regards to a signal provider's performance, so I'm going to try and lay some groundwork on that so we can all be on the same sheet of music when discussing things..

I'll Tell You What Zulutrade Really, Really Wants

I think that it's important to try and get into the minds of those at Zulutrade and determine exactly what it is that they, as a business, want. After all, it only stands to reason that they are going to reward those signal providers who give them what they want with a higher ranking so that these providers get more exposure. Since increased exposure is what we as signal providers want, it behooves us to get a general understanding of what the Zulutrade powers-that-be are looking for so that we can try and give it to them.

Zulutrade gets paid when individual followers assign a portion of their trading budget held with their respective brokers to a particular signal provider and that signal provider then places one or more trades. This seems rather simple, but let's break down the types of things which need to be maximized by signal providers in order to get Zulutrade followers to open their wallets and take on positions sizes that are larger than just mere microlots.

1) Profitability - Let's not beat around the bush, the entire Zulutrade world exists because of greed. The followers want to rake in huge profits by trading leveraged currency derivatives using the strategies of others who see the market differently than themselves, have more time, or simply have pure talent and insight where trading Forex is concerned. The signal provider wants to get a bonus for trading his system above-and-beyond what he would earn on his own account. Zulutrade wants to make a commission for simply bringing signal providers and investing followers together. With a near limitless supply of signal providers, the biggest factor in this entire gig revolves around who shows the greatest amount profits when stacked up against his competing signal providers.

2) Consistency - it doesn't really help to follow someone who has a great month that brings in over 100% ROI if the rest of the months during the year are going to be a mix of break even months, some minor winners, and more than a few losing months. At least not when one could elect to follow a different signal provider that provides 20% profits per month consistently. Remember, spooked followers will fall into a period of confusion where they will set their funds on the sidelines while looking for a new provider. They may just decide to get out of the Forex game completely. It's more profitable for Zulutrade if one, two, or three providers that an individual follower is mirroring trades from provide a sense of security which keeps the follower in the game taking each and every signal provided.

3) Trade Frequency - a signal provider might have great performance in both risk/reward and win ratio, but if that provider only puts on 5 trades per year, he's not going to be able to generate much revenue for Zulutrade. It's safe to assume that running a strategy that has a moderately high trade frequency will be favored with a better Zulurank than those who have a very low trade frequency - regardless of profit levels.

4) Low Drawdown - nothing spooks followers away from taking trades and increasing position size (and thus Zulutrade's own profits) than losses. This applies equally to true drawdown in the form of booked-and-realized losses and floating drawdown that may or may not be overcome before a trade is closed out. Those signal providers that can provide profitable performance while avoiding fear-inducing drawdown will be given favored-trader status by Zulutrade.

These are the major factors upon which Zulutrade's proprietary Zulurank algorithm is based. There may be others, but it's pretty much a guarantee that these are the elements around with the entire system is built because they have the greatest impact on follower behavior. Since the followers are essentially the customers, they are the ones that provide the revenue to make the entire system run and thus their behavior is what Zulutrade is interested in most. It's pretty safe to assume that follower profitability is not really all that high of a priority, regardless of whatever official statements may be issued from the Zulutrade home office.

With this major concept in mind, we find that Zulutrade is really in a bit of a dilemma. First of all they must provide accurate information about the performance of the various signal providers, but they also want to do so in such a way that the information gives as much of a "warm fuzzy feeling" to the prospective followers as possible so as to encourage them to take the plunge in following at least one signal provider. While some metrics (like win ratio) are pretty straight forward, the rest have a great deal of leeway in interpretation depending on how the figure is calculated. We'll start breaking down the most important of these factors in the following few posts so as to expose how Zulutrade fandango's the numbers in order to provide the prettiest picture possible to followers...and then we'll start talking about what we can do to use this behavior to our advantage in working our own strategies as a signal provider for Zulutrade.

hello there!! lovely analysis you put there on zulutrade!! Really impressive reading!
Btw, would you like to put some words on some signal providers, lets say the top ten !
would be really helpful for us, followers thank you in advance

so guys, any decent, trader/s to recommend to follow, here for the old fellah?

At the moment I like these guys:

Viva_FX_RU
SteadyCapture (v)
MUHIUDDIN DFX
for333

Right right aBax,
I agree with all of the above except for for333. Hate this guy...had a severe dd with him ..I guess I can never trust him again!

http://www.zulutrade.com/trader/114823

check out this guy,.....I rarely recommend any trader for that matter, but he seems like having a potential !
what do you think?

Mazumabot looks to be one of the best new Zulutrade signals providers.

Average profit per trade is excellent for followers. Monthly returns so far are very high.

Winning percentage is also high.

Consistent Growth Strategy -

https://www.zulutrade.com/trader/197528

wow nice performance you put there !!!
I am definitely bookmarking this trader. thank you for sharing.

The performance graph looks good, but the devil is in the details. I don't like position staking (see picture). Many positions like that could destroy your account very fast.

hello guys,

Well it doesn't matter at the end of the day , i mean some trading days are good, others, not so much, but the total should be a overall performance positive for u and for your followers!

That's true, but these staking strategy's very often turned out to be very risky. Kind of pip and run. Make the max profit in a short time and in the end the follower is the looser.

You have a point! So we should approach it as well like a copy pip and run strategy ?
like going on for the ride for some pips and then leave the trader.

That is one possible strategy. Recently I read a study where they invest in the traders with the best Sharpe ratio. It turned out to be profitable. Maybe we can adapt that strategy and adjust our portfolio weekly or monthly.

I see, I see. Can you suggest some good trader/s to follow? ...Today was not a good day after the ecb releases... i need to hedge my traders somehow..

At the moment I am flat at ZuluTrade, because I try to develop an automatic strategy.


But If I find some good traders I'll let you know.

He is at may watchlist by now:
Trim3x

Hey there abax,

thanks for the suggestion, seen quite late....anybody else?

What do you think - are you coming back to zulutrade? or you going on vacation?

Yes I am still with ZuluTrade as a Follower. To help others with my knowledge I produce a video course which I mentioned in the other posts.

I could tell you my trader every time, but prefer to help the people becoming a better follower.

https://www.youtube.com/playlist?lis...gE3N_2b2c8GFgT