ZuluTrade

February 2, 2012 01:44 AM
(4 / 5)

ZuluTrade is a web service that allows users to copy the trades of expert traders and is part of a new breed of trading platform that aim to harness the collective wisdom of groups. The service does not hold money, or execute trades. Instead, it links to your existing broker and provides the signals with which to automatically enter trades. We have seen several examples of this type of retail forex experience cropping up over recent months with the likes of eToro and others, however, with monthly trading turnover of around $3bn, ZuluTrade is one of the biggest. Founded in 2006 by programmer Leon Yohai, the company is based out of Athens, Greece and is registered with both the NFA and CFTC.

Getting Started

Since ZuluTrade acts as a bridge between the broker and trader it does not hold any funds and is therefore relatively quick to set up.  To get going, you simply provide ZuluTrade with your broker name and account number, sign a form from your broker that authorizes ZuluTrade to act on your behalf and then wait for confirmation. The process usually takes just one day. If you are completely new to forex, then you will need to get set up with a new online broker account first before you can begin using ZuluTrade.

Open an account in ZuluTrade

Concept

The concept of ZuluTrade is to enable ordinary traders to mimic exactly the trades of the ‘experts’. The service is offered completely free since ZuluTrade makes its money through the trade commissions it earns with each broker. ZuluTrade connects with the back engines of the different brokers to forward trade data so whenever an expert makes a trade, that position is mimicked exactly in the investors account. As such, there is no human intervention at all in the placing of trades and each account is completely confidential to the investor.

After registering on the site, users are able to choose from over 77,000 ‘expert’ traders, each with their own unique trading strategy and risk profile. Every expert is listed with their key statistics clearly shown such as their maximum drawdown, ROI and equity chart. The site also lists the top 10 performing experts and the amount of money following each one – with some experts having over $7m following their trades. There is also an advanced search option to be able to pick out the best experts to follow. In fact, picking the correct trading expert is probably the most important factor for success.

Being able to automatically copy the trades of an expert provides the trader with a number of advantages. Firstly, you do not have to worry about placing the trade or learning about what moves markets and secondly, you no longer have to spend your time glued to a computer screen. Indeed, since ZuluTrade is hosted on its own server, you do not need to even have your computer on. You can simply go away and the system will run on its own, generating money while you sleep!

ZuluTrade performance table

Features

ZuluTrade does provide a handful of charts on its website but are not really needed. The site does however have a number of other extremely useful features that add to a user’s experience of the site.

ZuluGuard

ZuluGuard is a new feature that has been introduced to the site and is a welcome addition since it helps protect a trader from any change in the behavior of the expert they are following. Now, if an expert that you are following radically changes his or her trading strategy, or begins to take strange trades, ZuluGuard will automatically remove the trader from your account, thus preventing any losses from bad trades. It’s also possible to fine tune the ZuluGuard feature with special settings.

Auto-rotate

The auto-rotate feature means that ZuluTrade will keep tabs on your account and, based on certain criteria, will replace poorly performing experts with better alternatives, based on the ZuluRank scoring system. This means you do not need to worry about having an expert in your portfolio that is performing badly, since ZuluTrade will automatically replace it when its ‘blue line’ crosses over a certain threshold. You could say, therefore, that the auto-rotate function bares a lot of similarity with the philosophy of momentum investing.

VPS Server

A key advantage of ZuluTrade is that it is hosted on its own VPS server. This means that everything can be done via the ZuluTrade web site, in fact you do not even need to download your broker’s trading platform. What’s more, by hosting its own server, ZuluTrade effectively operates in the cloud. Meaning, you can turn your computer off and go to sleep, and ZuluTrade will still work perfectly in the background.

As well as these features, ZuluTrade provides a number of well-designed apps for Apple, Kindle and Android

Support

ZuluTrade provides excellent support with all emails and queries being answered in a fast and efficient manner. Support also includes 11 international phone numbers to call, an online chat feature that is open 24 hours a day, 7 days a week and there is also a forum for community guided advice.

Tips for Using ZuluTrade

The number one for tip for using ZuluTrade is to make sure you choose your experts wisely and this involves learning a little bit about what makes a trading system work and what warning signs you need to be aware of. On ZuluTrade, anyone is able to open an account and claim they are an expert which means it is not enough to just pick from the ten best performing experts. Although the top experts may be doing well, it is possible that they will be using unsustainable techniques – such as martingale strategies for money management that could ultimately end in ruin.

The best advice is to pick experts that offer realistic results and closely match your own risk tolerance levels. If an expert is making 30% a month for example with just a 2% drawdown and 95% of winning trades, it is pretty clear that this system is flawed in some way since its profits are simply too good to be true.

Keep an open mind when using ZuluTrade. Be aware that systems will on occasion stop working, know that there is no such thing as a free lunch in forex, keep your risk to a manageable level and realize the possibilities of having a basket of several different experts. If you do that, ZuluTrade offers tremendous potential to make a living.


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