Why Zulu Trade is a Death Trap for Traders
One of the most interesting websites which has been released within the last few years is - without a doubt- Zulutrade. This enterprise which seeks to hook up signal providers with traders worldwide in an effort to provide seemingless account management has gathered significant interest from both new and experienced traders alike. I have to confess that the first time I saw the Zulutrade website I thought it was a terrific idea, it is seems extremely good to have the possibility to have a proffesional manage your account and trade it efficiently when you are unable to do so. However upon a close analysis of this website for a little bit more than a year I realized that Zulu trade is nothing more than a death trap for traders. Within the next few paragraphs I will discuss my views about Zulutrade and why I believe it is an absolute abomination, a monster created as a biproduct of the urge people have to get quick profits and the urge other people have to take advantage.
So what is so bad about Zulutrade ? The idea - as I said before - is not bad at all. You put your money into a forex account and hook it up with a reliable signal provider which executes trades on your platform and brings to you good performance. Nothing wrong with that. The terrible dark secret of Zulutrade only comes out when you realize who the signal providers are, the insentives they have to do business and the way Zulutrade conducts its business in general.
How does Zulutrade do its business ? Although Zulutrade advertices their service as "free", nothing could be further from the truth. In fact, the company charges you a 1 pip comission per traded lot which is effectively going to hinder the profit of any profitable trading strategy. Add to that the fact that signal providers in Zulutrade also win in a trade by trade basis and you get a very strong insentive to trade as frequently as possible. Then we also have some very dark aspects of signal providers and their performance. Zulutrade allows its providers to execute their strategies on demo accounts with infinite capital, effectively making them avoid margin calls as long as they do not close positions in open draw down. What you get is very misleading performance which effectively makes it almost impossible to evaluate the potential of any of the trading strategies presented.
Then we have the problem of track record. Your money is not being managed by a proffesional trader, it is managed by a trader who possibly knows as much or even less about forex trading than you, without a verified track record and without any type of certification. It is actually illegal in the US for any person to manage either more than 15 forex accounts or more than 400K USD (whichever comes first) without being a registered Commodity Trading Advisor (CTA). Are any of the people managing accounts in Zulutrade CTAs ? No, they actually are not, reason why Zulutrade could also be in direct violation of NFA regulations in practice, although they must have found a loophole to allow them to conduct their business as it is. The fact is that the oldest accounts at Zulutrade have less than a year of live trading results, something which is a gigantic RED FLAG. Why would you trust your money to someone who does not have a consistent and long record of profitability ?
It is also worth mentioning that Zulutrade has all intentions to make all its signal providers appear as profitable as it can, because it is a win-win situation for them. If you trade with ANY signal provider, they will get paid comission, either if you win or if you lose. So they actually do not have any reason to show you an honest and reliable track record, something which would be very different if their comission depended on actual account profitability. Add to that the fact that signals are also bound to be executed with a certain delay and your profitability is even MORE hindered.
Do I know people who have used Zulutrade ? Yes, actually several of them. Three people I met who have used Zulutrade got a margin call and 2 others are within a deep draw down. None of them has made something even close to what is shown on the signal providers' performance pages, something which speaks a lot about the reliability of Zulutrade. In the end, Zulutrade is nothing more than a company which hypes its own signal providers who are traders without any certification or track record (which is shown and third party verified), traders are stimulated to enter a lot of positions and they are not stimulated to generate profits since their comissions depend on the volume traded NOT on the profits made.
If the people at Zulutrade were HONEST and they wanted to create a true reliable signal, managed account service, they would only collect comission from PROFITS and NOT on the amount of volume traded. It would be MUCH better for the customers since only good signal providers would be stimulated to stay and trading frequency would NOT be an issue which affected their overall profitability. Right now however- Zulutrade is a DEATH TRAP for traders- particularly new and inexperiencied ones which may be looking for an easy way to generate high profitability in forex trading.
If you would like to learn more about my experience with forex trading and how you too can design and program your own systems to achieve long term profitability in the forex market with sound trading tactics please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
So what is so bad about Zulutrade ? The idea - as I said before - is not bad at all. You put your money into a forex account and hook it up with a reliable signal provider which executes trades on your platform and brings to you good performance. Nothing wrong with that. The terrible dark secret of Zulutrade only comes out when you realize who the signal providers are, the insentives they have to do business and the way Zulutrade conducts its business in general.
How does Zulutrade do its business ? Although Zulutrade advertices their service as "free", nothing could be further from the truth. In fact, the company charges you a 1 pip comission per traded lot which is effectively going to hinder the profit of any profitable trading strategy. Add to that the fact that signal providers in Zulutrade also win in a trade by trade basis and you get a very strong insentive to trade as frequently as possible. Then we also have some very dark aspects of signal providers and their performance. Zulutrade allows its providers to execute their strategies on demo accounts with infinite capital, effectively making them avoid margin calls as long as they do not close positions in open draw down. What you get is very misleading performance which effectively makes it almost impossible to evaluate the potential of any of the trading strategies presented.
Then we have the problem of track record. Your money is not being managed by a proffesional trader, it is managed by a trader who possibly knows as much or even less about forex trading than you, without a verified track record and without any type of certification. It is actually illegal in the US for any person to manage either more than 15 forex accounts or more than 400K USD (whichever comes first) without being a registered Commodity Trading Advisor (CTA). Are any of the people managing accounts in Zulutrade CTAs ? No, they actually are not, reason why Zulutrade could also be in direct violation of NFA regulations in practice, although they must have found a loophole to allow them to conduct their business as it is. The fact is that the oldest accounts at Zulutrade have less than a year of live trading results, something which is a gigantic RED FLAG. Why would you trust your money to someone who does not have a consistent and long record of profitability ?
It is also worth mentioning that Zulutrade has all intentions to make all its signal providers appear as profitable as it can, because it is a win-win situation for them. If you trade with ANY signal provider, they will get paid comission, either if you win or if you lose. So they actually do not have any reason to show you an honest and reliable track record, something which would be very different if their comission depended on actual account profitability. Add to that the fact that signals are also bound to be executed with a certain delay and your profitability is even MORE hindered.
Do I know people who have used Zulutrade ? Yes, actually several of them. Three people I met who have used Zulutrade got a margin call and 2 others are within a deep draw down. None of them has made something even close to what is shown on the signal providers' performance pages, something which speaks a lot about the reliability of Zulutrade. In the end, Zulutrade is nothing more than a company which hypes its own signal providers who are traders without any certification or track record (which is shown and third party verified), traders are stimulated to enter a lot of positions and they are not stimulated to generate profits since their comissions depend on the volume traded NOT on the profits made.
If the people at Zulutrade were HONEST and they wanted to create a true reliable signal, managed account service, they would only collect comission from PROFITS and NOT on the amount of volume traded. It would be MUCH better for the customers since only good signal providers would be stimulated to stay and trading frequency would NOT be an issue which affected their overall profitability. Right now however- Zulutrade is a DEATH TRAP for traders- particularly new and inexperiencied ones which may be looking for an easy way to generate high profitability in forex trading.
If you would like to learn more about my experience with forex trading and how you too can design and program your own systems to achieve long term profitability in the forex market with sound trading tactics please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !
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