Basics Of Choosing Traders To Copy Using ZuluTrade

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Choosing traders to copy on Zulutrade and indeed any other copy trading platform is often portrayed as being a simple process. The process itself can be very simple, the key however, is choosing traders that suit your risk appetite and expectations of return on your investment.

So what criteria should you look for? This is different for everyone, but what is important is that you use all the tools at your disposal, and don’t overlook a single factor.

With Zulutrade for example, if you choose to copy some of the top traders, or even those with 100% win ratio, you will often be met with a ‘warning’, one in red stamped across the trader’s stats page. So how could it be unwise to copy a trader who is winning all their trades? That is one of the questions will be dealt with later, but for the moment, lets look at a successful trader’s stats.

OK, let’s head on over to the ‘Performance’ tab from ZuluTrade and grab the overview of their top trader’s stats. Looking good.

Forex trader Profit loss

First up, the graph, a nice steady upward growth. Average of nine pips not amazing, but 263% ROI and 76 weeks in the game means that he is a regular trader who overall has great performance. The fact that he has 13284 followers, and $24 million ‘sitting on his shoulders’ makes him a good bet. So lets start copying him immediately shall we. Or, hang on a minute, never take anything at face value, lets click on to his stat details and see what we find (below).

Have a good look.

Forex trader Account Details

The fact that he only has a 75% win ratio is not too alarming as overall his performance bears out his knowledge and experience. However, as with many traders of his calibre he does take hits. NOTE: Worst trade -240 pips. Now this isn’t enough to kill some accounts, but could you take a hit of that size. It’s all dependent on your lot size allocation, and risk appetite. It’s not enough to put off $24 million worth of traders, however there are plenty of other traders being copied, so he is not everyone’s ‘trading panacea’, so would he be yours?

This trader will probably either be suitable for a copier with a very large budget who is in it for the long haul, whose account is big enough to take a few hits. Or, maybe a trader who is not too ambitious and is dealing with minimal amounts in a micro account.

His Draw Down is not excessive at 19%, but some advisers reckon this indicator to be the most important when it comes to risk assessment.

Although this article hasn’t covered everything, at the root of it is that you should make sure that you understand exactly what every performance indicator means. And once you understand them, use them. If the guides don’t give you all the answers that you require try some forum searching/posting to ensure that you really have an idea about what you are doing. ZuluTrade has a very active and informative forum.

Another point is that despite the fact that copying traders is advertised as being a short-cut that avoids extensive learning of how to trade Forex, you really need to start to learn the basics of manual trading to help you get a better grasp of the automated systems.

This article has been an introduction to what is actually quite a complex venture. Zulutrade offer a wide range of performance indicators about their individual traders, and this is a good thing, the more the better. The only problem is that it then becomes a mission to sift through all the available variables. However, it is better be given the opportunity of sift through all the info than not, it’s just up to you to ‘crunch it all’ to find the best trader for you.

Forex platforms offering systems such as this invariably develop tools to help make your choice of trader or trading system an easier task (such as the rankings). However, what it comes down to IMO, is that you need to do some ‘graft’, maybe quite a bit of hard work, if you are going to get anywhere with copytrading. Think about it, if copy-trading is so easy, how come the platforms aren’t screaming at the top of their lungs that you’ll make a fortune very quickly and easily by simply copying their top five traders? – Answer, because you probably can’t. Forex companies want you to succeed, because they are mere market facilitators. You are not trading against the house, you are trading with it, The more you win, the more they win.

Work, work testing, and more hard work are what is required unless you are happy to receive a meagre revenue stream from your chosen traders, or worse a deficit. And, by doing the background work, and the ‘tearing apart of individual trader’s stats’, along with developing your own money management system, you may be on your way to ‘better things’. No-one said it would be easy…

7 thoughts on “Basics Of Choosing Traders To Copy Using ZuluTrade”

  1. Very nice post there. Have you tried the alchemy function of zulutrade? It lets you see which providers do a succesfull follower have in their portfolio along with his custom settings.

    1. Hi Fred, thanks very much for the feedback. I have taken a look at Alchemy, and am going to ‘test’ it. This will take a while, to ensure that any results are meaningful (all aspects of this site are part of a long term project). G.

  2. Further to the above post I have come across several other examples of traders who have made huge profits, however, they have also taken big hits as well. One of the scariest ones was Gold Max FX ( who although having an overall profit of 132,295 pips, has also taken hits up to – wait for it, -6,757 pips (his max loss). That was in the trader’s earlier days although since then he has also taken further substantial hits (although that one really was the ‘big one’). All of which supports the idea of looking seriously and deeply at what has gone on in a trader’s account before you copy them. There’s over $4million dollars copying him, but they may have bigger accounts than some and may be able to absorb the losses.

  3. Nice blog you have here. Each signal provider that you want to follow has to be properly evaluated , you are right about the drawdowns , he may have many followers but you dont really know how much equaty they have so as to support the big drawdowns that he will produce. Thats how many followers loose their money in zulu , they dont check the statistics properly and they dont read about the strategies of the providers.Zulu is a great concept , but you have to be carefull , it is your money after all.

    1. Thanks. It is a great concept, but as you say, stats must be checked, otherwise you may as well roll a dice.

    1. I’m sure there are plenty, it’s a matter of sifting through to get those lower risk ones with good returns who regularly trade.

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