Hey there traders and investors. Today the topic is Zulutrade, and I’d like to give you my honest review on it, and why people don’t make money from it. Btw, I got the idea of this topic thanks to a subscriber on my Youtube channel.
What is ZuluTrade?
Zulutrade is actually the world’s oldest and largest trade-copy platform – that is, until MyFxbook and their “SignalStart” came into the picture.
Basically, Zulutrade is like a broker super affiliate who has created a platform solution for their customers to select and choose from their directory a trader to follow to generate trading turnover. They also have a complex system of sharing the rebates they receive from various brokers with affiliates, the people who promote Zulutrade on social media and online. Because regardless of profit or loss, they get volume turnover.
While initially that may sound kind of self-serving, we have to give Zulutrade due credit for bringing together a vast number of traders, a.k.a. signal providers, who give retail investors who have no time or skill to trade plenty of options for profiting in the forex market.
Is it really good though? Read on.
Can You Be Profitable By Investing on Zulutrade?
Short answer, yes. However, you need to watch the video below at the end of this post to take note my explanation of some reasons as to why a good number of people complain that they don’t make any money at all by following trading signals on Zulutrade.
In order to invest on Zulutrade, you will first browse for a signal provider whose trading you like, and then create a Zulutrade account to follow the trades. You may also simultaneously follow several signals at once, but this is not always a good idea for reasons I will explain later in this post. Once you create your Zulutrade account, you may also simulate and track the performance of the signal provider you selected on a demo account without risking any of your personal funds. Just keep in mind that past performance is no indication of what can happen in the future.
This is a screenshot of the top-yielding investors on Zulutrade.
So as you can see, it is actually possible to make money on Zulutrade. Watch the video below to find out how you can avoid the 3 Common Mistakes of Most Zulutrade Investors.
Why Do People Lose Money on Zulutrade?
People Lose on Zulutrade for Technical Reasons
There are several reasons as to why people lose money on Zulutrade. One of these reasons would be “technical issues”. As mentioned on my Forex Managed Accounts page, I didn’t bother to list my system on the copy-trade system by MyFxbook called “Signalstart” despite receiving multiple invitations because of the latency (or rather in layman’s terms “delays”) price quote, and spread differences between master accounts and follower accounts. This technical aspect can possibly mess up scalping strategies and make them unprofitable, and can also cause hedging and martingale strategies to miss trades.
3 Common Mistakes of Most ZuluTrade Investors Who Lose Money
Common Mistake #1: People Lose on Zulutrade Because of Wrong Mentality
Picture this. Guy invests in XYZ strategy signal. Signal suffers a 20% loss. Investor freaks out and disconnects from that signal, and instead changes to ABC strategy signal. Signal suffers a 15% loss. Investor freaks out again and disconnects, and finds DEF signal to join. Same story repeats itself.
However, what he didn’t know or rather, didn’t bother to observe, is that XYZ, ABC, and DEF signals have each been around for over 2 years and that these “drops” in equity have also occurred in the past but only under exceptional circumstances, and the traders behind these systems have always been able to turn around these situations, recover from loss, and continue the profit curve. Sadly, the investor didn’t know that – nor did he bother to educate himself of political/economic influences present in that same period that resulted in all 3 signals losing money. He could have simply just stuck with either one of them and recovered.
All this could have been avoided had he taken time to understand the methodology and risky-ness of the trader’s approach just by studying the statistics, trading history and open trades – which are actually available in any signals profile on the Zulutrade website.
Common Mistake #2: People Lose Money on Zulutrade Because They Are Over-Exposed To Currency Risk
If you have open positions in EURUSD, USDJPY, GBPUSD, AUDUSD, USDCHF – ever noticed each of them have “USD” as the counter-currency? Putting aside currency exchange differences, I would like to point out to you that you are 50% exposed – WIDE OPEN if anything should happen with the USD currency. Events such as: US trade war with China, political risk (Trump running his mouth), etc. The same is if your strategy trades AUDJPY, USDJPY, GBPJPY, EURJPY – then you are 50% exposed to things that can affect the Japan stock market, and Japan currency.
Diversification into different strategies may not necessarily mean you are spreading out your risk. Instead, you could be amplifying and accelerating the demise of your account should anything happen to that over-exposed currency risk on your account.
Again, I highly recommend you go into the strategies’ page to study the trading, trade history, etc, to know what to expect and make smart decisions on portioning your account across different systems – or if you should at all!
Common Mistake #3: People Lose Money on Zulutrade Because They Chase High Percentage Gains on What Are ONLY “Demo Accounts”.
Naively joining systems with no track record. There’s a reason why several system names on Zulutrade are just alphanumerical gibberish. Someone can easily start a dozen instances of the same EA with different optimization sets and different r combinations of currency pairs, creating a dozen different signals – and all they plan to do is have some succeed while the rest fail on margin call or stopout. The ones that succeed do so on pure luck. You know what’s the most disturbing thing? The account doesn’t need be a real account to be a signal account! So where’s the Zulutrade signallers commitment if losses don’t hurt him?
Sure, they may allow you to filter the signals by clicking on “Live Traders”, but there is no transparency as to how much vested interest the trader has in his own strategy. Think of it this way – If you are doing business with a company, won’t you want to know how much “paid up capital” the business owners have?
For all you know, the real account could just be a cents account.
And, it’s also on their signal providers’ luck that unsuspecting investors overlook this aspect and let their greed for the most profitable system take over.
If you go to my “Forex Managed Accounts” page, you can have a direct link to my MyFxbook account to see how my trading account is doing before deciding to follow my trades via the PAMM.
Bypass Zulutrade and Enter Trades Simultaneously With Me
Although I mentioned in the video that I’m in two minds on adapting my system to be put on Zulutrade, the only reason for me to ever want to do so would be to expose my system to more people – or to prove a point. Currently I’m in no urgent position to do so, and I have plenty more channels to expose my system to serious traders and investors – i.e. on the internal platforms which most brokers today have.
After writing this blog post, I somehow have reinforced my ideas as to why I shouldn’t list my systems on Zulutrade.
I also just came across a comment on the “social tab” of one of the leading signal providers there, where he described how a decision to take a big hit on the account wasn’t his personal idea, but actually something he had to do to stay compliant with new rules of being a trader on Zulutrade. You can have a look at it here.
I don’t think I’d want to be bound by such rules, either.