Forex $ocial Traders
 

           

Don´t Blindly Follow And Copy #1 Signal Providers On Zulutrade

Forex Investing can be risky not only when you trade by yourself but also when you follow and copy someone who looks like one of the best traders. Today I would like to remind you some of former #1 traders (signal providers) on social investing network Zulutrade.

First on this list is american trader Forex Cruise Control. This signal provider had an impressive performance. From october 2010 to may 2012 he generated profit of 6,347 pips. He didn´t have a single losing month. In May 2011 he became #1 on Zulutrade and stayed on top almost 1 year.  If I remember that correctly he had over 10,000 followers who were copying his trades. Total amount on their accounts was over $30 million. Forex Cruise Control (FCC) was a king for them.  All comments on his profile page were positive and future looked very bright.

But what most of these followers didn´t realize was that FCC was using a very risky trading strategy. He almost never used stoploss. What he was doing was that he opened a first position with a profit target around 15 pips. If target was hit, ok. If the trade went against him he opened a new position and then later another one. He was wating for market to turn and then he averaged all open position for profit.  This strategy worked for almost 1 and half year, but then a huge trend occured that was against his open positions and he lost almost 50% of his balance in 2 weeks.  Imagine, those people who started to copy him during that time lost a lot of money.  What happened after that? Nobody knows. Maybe emotions and need to get everything back fast led him to change of his trading style. As you can see on the screenshot below, he opened 24 positions at the same time, while at the beginning of his career he used to open only 4-6 trades.

FCC-profit

Currently his account is experiencing -10,000 pips drawdown and is probably finished for good.

Second example on this list is a russian trader Artem1584.  I am not exactly familiar with his original trading style, but as you can see on the screenshot below he was also opening a lot of positions at the same time. When you check his best/worst tab in his stats you will see that many times his losing trades were much higher than winning trades, so I would bet he was adding to his losing open positions to be able to average when market turns a little in his favor.

Anyway, Artem1584 used to be #1 on Zulutrade too. He was up more than 10,000 pips in November 2012. Then in 2 months later he was almost -5,000 pips. That is huge drawdown of -15k pips. He had to open 30 positions. Things turned well for him (not for many of his followers who lost everything because of big lot sizes) and he is +19,000 pips now.  In my personal opinion this is a suicidal trading strategy.

Artem1584

There is one thing about a person behind Artem1584´s account. This russian is for sure a commission hunter. I think his plan is to use that kind of trading strategies that generate huge profits (no matter what risks are) so he can get to top positions of Zulu ranking very fast, get many hundreds and thousands followers, harvest commissions for as long as possible (till the strategy collapses). After that he simply opens a new signal providers account and the cycle starts again.  If you don´t believe that, simply go to his profile page and you will see that this trader is also know as The Good Life 1. That is only 19 weeks old account, but he already was #1 too.  He was +6,800 pips in such a short time, currently he is +3,800 pips. That moved him down to position number 1,035. He is opening multiple positions too, so far up to 12.  His max. drawdown up to date was -1,14k pips, but I would bet that it´ll be much more in future.

And last example is lately very popular Kama-Spot.   This russian trader (also know as Saved FX)  became number 1 on Zulutrade very fast too. He used to open up to 5 position and average them for profit.  At the times of his highest glory he was up almost 5k pips and see the screenshot where it ended and how many positions he has been opening lately.

kama-spot

You can also read all articles we have published about Kama-Spot and Saved FX recently.

Summary:

Social investing networks like Zulutrade or eToro where you can autocopy other forex traders have a big earning potential, however it is wise not to blindly follow and copy #1 signal providers and analyze their trading styles before you invest. Another good idea is to diversify your portfolio, copy more traders and trade only 1 microlot per each trader.

2 comments to Don´t Blindly Follow And Copy #1 Signal Providers On Zulutrade

  • Dane

    Good post, couldnt agree more.

    Although we call it auto trading, we really can’t, to use zulutrade or eToro, and be successful with a good degree of profitability, it requires daily monitoring of performance, to know what your traders are up to with their strategy.

    like one of your previous posts suggested, i choose to minimize my risk to any one particular trader by risking small amounts over many carefully selected traders, over most of which i demo first

    The most important thing with this trading style and in picking my traders, is very low drawdown. with a few exceptions, i wont pick any traders with a max dd over 1k pips, though preferably around 500 or less. prefer no more than 10 trades open at a time from any one trader. i browse through their trade history and look at their trade lows. i dont like seeing a trades that go to -100 before going to +10, thats bad money management of risk reward. traders need to cut loosing trades when appropriate. I also prefer trader who have an average trade time of less than a day. i dont mind scalpers as long as they keep tight stop losses, a little bit of pips from many traders goes a long way

    although some of my traders are form the top ranks, many of them are from outside the top 100 and they have been performing extremely well, and consistently.

    i like to keep my account as liquid as possible, keeping my overall equity as close as possible to my realised equity.

    Presently i make around 5% a day on my zulutrade account with minimal drawdown, and fairly low risk, for which i think is a fantastic result for forex

  • guru

    Thank you Dane for a very detailed comment.

    I would add one more tip for evaluating traders to copy. Check what max. SL they use, for example if they use 100pips SL, set your own hard stops in your settings to 110 or something. This way you can avoid situations when traders under emotion pressure break their own strategy and start to use larger stops.