ZuluTrade is one of the oldest participants in the social trading arena. Founded in 2007, it has been in business for over seven years and over time has won the confidence and admiration of many market players. ZuluTrade says that it developed as a response to the lack of a system to audit traders globally and enable them to share their knowledge with others.
At the time of this review, the ZuluTrade live transaction volume counter was at over $673,747,000,000. The number keeps ticking upwards every second and clearly, ZuluTrade participants are very active.
ZuluTrade aims to provide an open platform where traders can share their knowledge and that there is support for every platform available. The thing that truly stands out about ZuluTrade is the level of openness and transparency they aim at achieving.
Their desire to enable traders to connect with any trading platform is also a very ambitious goal. Let us see how well ZuluTrade is doing to meet its goals.
Company Registration and Regulation
Knowing the disciplinary and financial history of an organization you want to place your money with is very essential. You want to make sure that you can trust the organization in the sense that it is in a stable financial position.
It is also important to see if it has been involved in any cases involving breach of customers trust. ZuluTrade is regulated in the US. As a member of the National Features Association (NFA), ZuluTrade is approved to act as a forex firm, an introducing broker (IB), and as a commodity-trading advisor.
As per the NFA records, its business address is in Greece. We noted one record of a regulatory action taken by the NFA against ZuluTrade in 2011.
The NFA issued a complaint against ZuluTrade by charging it with failure to maintain the required adjusted net Capital (ANC), the failure to keep the required books and records, failure to maintain the required capital and failure to give the required notice to the NFA body once they became of the fact.
In this case, the decision for the case was based on an offer made by ZuluTrade for a $10,000 fine; where it neither denied nor admitted the allegations made against it. We did not find any other regulatory or disciplinary action taken against ZuluTrade after 2011.
Demo Accounts on ZuluTrade
ZuluTrade offers fully functional demo accounts that can help you get acquainted with their platform before you open a live account with them. Signing up for a demo account is quite straightforward.
You have the option of signing up using Facebook to capture your personal information or to input the information manually. You will need to provide your name, email address, country and phone number.
Please be aware that when signing up using Facebook, ZuluTrade will get your profile picture and use it on your public page on ZuluTrade. We noted that there are no options to change the photo or delete unless you call their customer supports desk.
The last step in its signup process is choosing the base currency of your account, the amount of leverage you want and the balance in the account. The account will be activated promptly and you can login as soon as you verify your email address. Demo accounts are only active for thirty days.
For live accounts, you will need to choose a partner broker to open your account with. There is an impressive list of 49 partner brokers, including ECNs to choose from.
It is unlikely that you will not find one that will suit your preferences.
From the live account signup page, you can sort out the brokers according to their commission in pips, their maximum available leverage and the minimum deposits that they require. When choosing a broker, it is important to take note of the historical slippage that each broker has been getting in relations to trades within the ZuluTrade platform. Slippage is the difference between the amount a trade is actually filled at and the entered amount.
We noticed with concern that some brokers have some ridiculously high slippage, of even over 6pips! Slippage will affect your profits significantly or even run you into losses especially if your signal provider is utilizing a scalping strategy.
Scalping strategies are based on exploiting tiny movements in price and taking many trades targeting tiny profits with each trade. Either way, you still want to choose a broker who has the least slippage. It would be a good idea to choose the same broker as your signal providers.
When you log in, you will be taken to your dashboard page. From this page, you can control all trading aspects of your accounts. In our opinion, dash board is well organized. It does take a while to get used to it though. For someone who has never used the interface, it will take a few tries to get used to it.
After a while though, the interface begins to feel natural and quite easy to use. We found that it is actually well planned out. Every action with just a few clicks.
One of the things that we thought was really appealing about ZuluTrade is its accommodating stance on trading. It does not limit you to where or when you can be dealing with your account.
Apart from its web-based platform, ZuluTrade also has apps for iPad/iPhone, android, windows phone and BlackBerry. With these apps, you can monitor and close existing trades and also manually open new trades.
One of the thing that makes the apps so appealing was the fact that they enable you to control your risk at any time; you can adjust your Margin call-o-meter (we will get to that soon) and also the trade size that each signals provider has.
The minimum amount of initial investment required to open a live account will vary form one broker to the other. For most brokers, it is about $300.
ZuluTrade does not require you to deposit money with them directly. They receive their compensation from your broker. As a trade follower, you will also not be withdrawing any money from them because you maintain your account with your broker. Procedures for deposits and withdrawals will thus vary from broker to broker.
Signal Providers on ZuluTrade
One of the strongest aspects that ZuluTrade can boast of is the massive size of signal providers that it has. Their number was over 10,000 at the time of this review and this number will probably keep on rising as Forex becomes more appealing and profitable. Of course having a huge number of traders is one thing, their quality is another.
ZuluTrade does not vet its signal providers. Their performances and quality of traders vary wildly. We noted that anyone could become a signals provider.
From the thousands available, it will therefore take some effort on your part to choose a few good providers that will match your portfolio requirements. An important feature in ZuluTrade is that it shows you any other alias accounts that a trader may have. Therefore, this allows you to know which other accounts they are running currently or may have in the past.
From the performance table, you can see how traders and followers have been performing. There are two search modes to choose from: The simple mode and The advanced mode. When you are in the simple mode on the traders tab, you can see the number of followers a trader has, their annualized return on investments, their rank on ZuluTrade, the amount of money following them and the number of weeks they have been actively trading.
There is also a tiny graph to illustrate the general progress of the trader’s account. The advanced search mode adds the maximum draw down ratio, the average pips per trade and their percentage of winning trades at the displayed data.
Naturally, you could be tempted to stick to the top traders on the first page, however we did notice that quite a number of the top performing followers do not simply follow the top ten traders. Some of them followed traders ranked even at 243 and still had decent returns.
The point is that there is a large number of traders to choose from in ZuluTrade. A good number of them have good and relatively consistent profits but most of these traders will not be on the first page of the search results. Therefore, it is necessary for you to do quite a bit of digging to find them. The search interface in the advance mode will allow you to put filters on your search results and reduce the number of traders that will show up.
We also found that even after putting some filters, the number that showed up (of traders who met our criteria) was still quite overwhelming. This is not a bad thing at all. In fact, it means you have the luxury to be choosy with the traders you may want and still get a decent number of traders to follow.
We should also mention that just as there are very good traders, so are the unreliable ones.
ZuluTrade has a large number of traders and we found quite a number of them to be too risky for our taste, so it is a good idea to do your due diligence in deciding which trader you would like to follow.
No matter which trader you choose though, it is also important to use a good risk management strategy to minimize your risk. We will look at the risk management features on ZuluTrade in a while.
It is important to note that signal providers are not necessarily using real money. It is possible for signal providers to be using demo accounts, this means that they do not have any of their own equity at risk and because of that, they may take unnecessary risks with their follower’s account. To add to that, they are paid according to the number of lots following them.
This will mean that they get a share of the spread you incur in your account. They are also paid regardless of whether the trade was profitable or not. Cumulatively, the effect of this set up is that signal providers have an interest to make more trade even if the trades are not necessary and this is the case even if it is not practiced. There is always a sense of comfort in following a trader who is actually trading with significant amounts of their own equity.
When you go to a trader’s individual page, there is information about his past performances. Although past performances does not indicate how future performances will be like, there are various past performances indicators that will help you gauge how an individual traders performance may fit into your portfolio.
You can view these indicators at different time frames as much as you want. Apart from the returns on investments, other indicators that you may want to look at are the maximum draw down, the pairs traded and most importantly the slippage per broker. The importance of checking the slippage per broker (relative to the trader’s trades) is that if your broker has a high slippage, your profits will be eroded away.
The great thing about ZuluTrade is that you can view and even download all past trades of a trader to analyze offline. This is a very useful feature for those of us who are very keen on details. Being able to download all the past trades of signal providers to an excel format or a CSV format is definitely one of the hallmarks of transparency in the industry and ZuluTrade deserves recognition for this.
You can use the back-test tool to simulate how your account could have performed with a given combination of traders in your portfolio. You will have to try several combinations of traders and tweak their individual settings until you find the perfect configuration for yourself. Of course as always, past performances and theoretical performances cannot guarantee you of future performances.
Once you find a trader that you want to follow, you simply click on the follow button on their page. If they have open trades, you will be asked to choose whether you would like to copy these trades. With each new trader you add, ZuluTrade will update your “Margin Call-o-Meter” based on their historical performance and risk history. The “Margin Call-o-Meter” shows how likely you are to get a margin call where you have too many open or losing trades to cover to the balance of your account. Even though this may provide some estimation of the risks you are exposed to, there is no guarantee that traders will follow their past strategies; which is the basis of the margin call-o-meter calculations.
From your dashboard, you can control how each traders’ trades are copied into your account and thus customize your portfolio to your own preference. From the custom mode screen, you can choose the maximum number of traders that can be opened by each trader or more specifically, by each trader per each currency pair. You can also set the minimum and maximum number of lots a trader can open at any time and set your default stops for each trader.
You can also enable ZuluGuard for each trader individually. ZuluGuard allows you to protect your account against unwanted behaviors from a trader. When the trader triggers certain actions, the system may choose to close all his positions, stop following him or replace him with a higher-ranking trader on ZuluTrade. One curious feature we found was the option to reverse the trades entered by a trader. This means that you would enter a SELL signal if they give a BUY signal and vice versa. It is not clear how this could be useful to a follower, since traders naturally attempt to make profits, but it is there.
Profitability and Performance
At the time of this review, the top follower had an actual return on investment (ROI) of 225% within 15 weeks of trading. He was just following three traders. With a “Margin Call -o- meter” at 86%, his annualized (theoretical) income in a year would be 779%.
We also noted that most of the top followers with impressive performances had been trading for less than 25 weeks. There are a few though that were beyond 52 weeks mark but their annualized returns was nowhere near the +700% level. It was concentrated at 50% to +100% levels. This means that taking a relatively high amount of risk and being profitable on ZuluTrade is possible; being consistently profitable is also possible with managed risk.
If you use ZuluTrade when trading with a live account, you will incur several other charges on top of your normal broker costs. Expect to be charged a commission on top of the normal spreads of your broker of about 2 pips or more (it will vary per broker). Though this is not too high for most strategies, it might really sting anyone employing a scalping strategy. So, there is a need to make sure that the strategy your signals provider is employing would adequately cover the commission or else you will still be charged by your broker.
As we had noted the minimum amount to sign up will vary with each broker, the least seems to be $300.
You should be on the lookout for how much spreads and slippage you will be incurring with each broker you are using. Normally you are better off with sticking to the same broker as your signals provider.
ZuluTrade is truly a social trading platform as it has several features that allow people to interact with one another. Traders have to leave a description of their trading strategy and also a status update on their pages. Followers can rate traders on three criterias: 1) Whether they make money from the trader 2) Whether the traders followed their trading strategy as they had described and 3) Whether they would recommend the trader to other users. These ratings are useful when trying to decide if you want to follow the trader.
Followers can also leave comments on the trader’s page and other traders can like the comments. A wonderful feature in this social aspect of ZuluTrade is that you can translate everything written in other foreign languages to English. Even though the translation may not be grammar-perfect, you will definitely get the gist of the messages.
On every follower’s page, you can see what the trader is following, and those that they are using. You can also see their account setting and copy their settings to your account. To do this automatically however, you will need to disable auto mode from your account settings.
ZuluTrade is integrated with popular social networking sites and at the top of your dashboard; you can enable or disable these features as you want.
ZuluTrade also have some educational material available on their site. Most of the material is centered on the use of their platforms. They however provide market news that can be quite useful for traders. You can access the economic calendar events coming up and those that have passed. We were very pleased to find that the calendar is actually very useful and very well organized compared to others.
ZuluTrade has both email and phone customer support. We found their service to be very helpful and responsive. In fact, an average email reply did not take more than 6 hours on weekdays, which was very refreshing! We also noted that they support several languages apart from English, which will be useful for international users whose first language is not English.
If you have an urgent query, you can choose to have a live chat by choosing the “chat with a specialist” option displayed at the bottom of every page of their website.
Once you have decided to get serious with social trading and settle on ZuluTrade as the platform you prefer, what next? Every traveller knows that when you decide to embark on a new journey, it is important to get as much information as you can about the journey. Social trading is not as different. In this journey, there are several pitfalls and potential trap that every investor should be aware of. We will reveal all of them here. On the other hand, there are also many shortcuts and wonderful tricks that will make your journey relatively a breeze and a success. On Social Trading Secrets, we have sent scouts to check out the terrain ahead and their reports will help you make consistent profits to your account.
Here are some tips and tricks with ZuluTrade that will ensure that you are profitable from the first month onward.
It is important that you read these tips first, before you even decide on which broker you want to use. Why? Because observing the principles we reveal here, will make the difference between a winning, profitable account and a losing account. We recommend that you examine them carefully and then decide on how you want to approach social trading.
Define your Investment goals
First before you even begin to invest, it is important that you define your investment goals clearly. Ask yourself these questions and write down the answers if you are serious about making money on social trading:
“What do I want to Achieve?”
Unless you can come up with concrete answers to this question, being profitable in social trading will be very hard. You need to have a very clear goal so that you can know when it is being met. Your goals can be in terms of return in investment and risk exposure factors.
“How much am I willing to risk?”
You need to know how much capital you are willing to put on the line otherwise, you may find that you put too little or too much in your account. You should also realize that you may not take seeing your account going below a certain percentage. Variations in your account size for both should be anticipated as you start investing. As a rule of thumb, do not trade with money that you cannot afford to lose. Answering that question will determine how much your initial deposit will be. It will also determine the risk management features you will put in place.
“What sort of signals provider do I want?”
Now that you know your goals and risk tolerance, it is time to decide on the signal providers. Notice that we are creating the criteria for selecting signal providers before you even see the actual traders. The trick is that when you already know beforehand what type of signal providers you are looking for; it will be much easier to find them. You will be much more objective in your selection.
Define your preferences according to performance criterias such as return on investment, maximum draw down, average pips per trade and aggressiveness. Obviously, selecting your signal providers is one of the most important parts of social trading. Please see the ZuluTrade social trader’s tips for more on this topic.
“How will I monitor and control my account?”
Once you know what traders you will be looking for and how their performance out to look like, the nest important step is to know how you will be keeping up with your account. The big kept secret of social trading is following up and management of performance. This is an area where we have to excel in. Remember social trading is about investing in people. It is not enough to select a signal provider and forgetting about everything. We need to dedicate about three hour a week to check on how well your account is doing. We found that the weekend is a good time because the markets are closed and there will probably be no open trades in your account.
Come up with a personal plan
Once you have clearly defined your goals. It is time for you to come up with a plan to meet them. You can be as flexible or as rigid as you want, as long as you have a plan that will help you get to your investment goals.
Your plan should be about the things that you can do for yourself. For instance, you could plan to check on the progress of newer signal providers that you may not be following at the time. You can also plan to have a pool of signal providers whose trading style you are familiar with and that you could potentially add them to your account if and when the need arises. This would come in handy should any of your providers fail you. Hence you would be able to replace them quickly without having to reinvest too much time on finding new signal providers.
When selecting brokers
When you go to the brokers selection page, you will notice that there are 42 brokers available for you to choose from. The number of options available to you to sort and select the most suitable one is quite useful however; they are not comprehensive enough for you to make an informed decision. We also noted that if you have no idea of how all the brokers work, in reality you will be making a decision with only a fraction of the information you have. Here are some tips for you to make the most out of the process.
- Do your own research on the broker you want to choose. Use the brokers selection tools as an initial guideline only. The same rules apply when selecting a broker on ZuluTrade as when selecting broker for personal trading: Stay informed. The main question you should ask is whether you would deal with that broker if ZuluTrade was out of the picture? As a rule of thumb, only enter into a contract with a broker that you are confident with their services. Remember, your primary contract is with your broker not with ZuluTrade.
- Open a demo account first and Select your favorite signal providers. After you are certain that you want to work with them, check out how much slippage your broker has experiences with. Slippage can eat all your profits or even run you into a net loss. Take a look at the two examples below:
Notice that the signal providers are using different brokers. If your broker was any one on the bar graphs; how would you like his slippage to be like? Check out their average pips per trade and the slippage of each broker. If you were following any of these signal providers, wouldn’t you rather be trading using DUKASCOPY? We would also completely stay away from NORDFX.
This is where most un-informed investors get it wrong. First eagle is the top ranked signal provider on ZuluTrade, yet he only has a 57% trader rating. This means that only about 57% of his followers reported to have made money from the signals! To see how this is possible, look at the average pips of First Eagle, there are only 9 pips per trade. This obviously shows that the trader predominantly utilizes some scalping strategies. If you were to choose NORDFX as your broker, you would lose about 4 pips of those 9 pips on every winning trade and on top of that, you will be losing 4 pips more for every losing trade! Now add on top of these losses, the commission you will be paying for every trade (for NORDFX it is 2 pips). For winning trades, you would expect only 3 pips (assuming that there is no slippage when trade closes). For losing trades, it will lose 6 more pips on each trade.
First eagle is clearly a popular signal provider for many investors BUT if you choose a broker with a huge slippage, you will most likely wipe out your account in the long run. In this case, when choosing brokers, we would automatically choose DUKASCOPY or FX OPEN ECN. No matter who our broker is, we would also stay away from first eagle even if he is the top ranked trader by ZuluTrade!
- Check out Funding options available and withdrawal policy and charges from the broker you want to choose. Are they accommodating to your needs? Always remember that your primary contract even in social trading is with your broker. You should be comfortable with every aspect of your broker.
- An important point we noticed is that overall, AAAFx seem to be a much better broker when dealing with ZuluTrade. Therefore, we think that it is a good idea to consider the merits of AAAFx seriously:-
- No commission,
- Full integration with ZuluTrade and
- A full refund policy
Of course, some of the top quality ECNs technically match these advantages and out do them in some cases. For instance, you will notice that AAAFX seem to have a constant 1 pip slippage. This significantly reduces any advantage you may derive from paying ‘no commission’ because the effect of slippage and commission to your bottom line is the same; they just take your pips away.
Now looking at DUKASCOPY as in the example above, you would pay the same 1 pip per trade with little or no slippage. DUKASCOPY’s client’s deposits are protected by the Swiss government up to 100,000 CHF (about 111,000 USD) and they also enjoy guaranteed liquidity of up to 50 million.
When setting up your account
When you log into your account for the first time, the account set up wizard will show up. If you are not familiar with ZuluTrade yet, we would recommend that you do not use the wizard at all. We found that using the wizard can easily lead you to make unintended or at the least uninformed configurations to your account. However, you can consider enabling ZuluGuard if you want to take a more cautious approach. If you do use the wizard, we recommend that you uncheck the??? option for opening all the present trades that the trader has opened. This is because for those trades, you would have missed their entries. If you enter too late on a trade, they may result in a loss especially if your signals provider is targeting smaller pips or is just about to close them. You will still pay commission on these trades even when they result in losses.
When you are taken to your dashboard, get familiar with the platform and do not take any trades yourself unless you FULLY understand the platform. In a live account, please understand that every trade you take; you commit your funds. Therefore, unless you are already familiar with the ZuluTrade platform and have a good reason to take trade, do not take any trades yet.
Open a demo account to practice using the platform, even if you do not intend to be trading for yourself. A demo account will help you better understand how ZuluTrade works without risking your cash. Ensure you are fully capable of adding, managing and removing signal providers from your portfolio. This will not be too hard and on ZuluTrade, it is quite intuitive. For information on how to do this, check out the full ZuluTrade review page.
Now when it comes to the risk-meter and ZuluGuard? We found that they could be useful for an investor who is not too much into the details of what is actually going on in their accounts, but still want to have some level of risk control. The risk-meter gives you a rough way to adjust the risks you take on and you do not have to think about it too much. Just slide the percentage to a number that feels good to you. We also noticed that the top performing followers in terms of return on investments, had a very high risk-meter setting.
To be successful in social trading requires us to have a very clear investment goals from the time we begin. These goals are the basis of all our investment decisions; they will keep us focused when challenges occur during the journey.
Even though we may only do this once, broker selection is an important process that requires special attention when beginning to invest. Trading on ZuluTrade can be a pleasurable experience especially for a well-prepared investor. Taking the time to learn these tips of trading is a great start for you. Please see the full review on ZuluTrade for a comprehensive review of the platform.
ZuluTrade is one of the most active social trading platforms out there. There are very few if any, other platforms that can boast of a better social trading environment than the one on ZuluTrade. The strengths for ZuluTrade are its transparency and focus on a great user experience.
Even though it requires a bit of digging around to find a good trader to follow, the rich selection of traders with diverse strategies is definitely to its credit. A follower capable of putting just a bit of effort in getting the right traders on his or her portfolio will certainly reap benefits. Overall, ZuluTrade should be among the top contenders for the top social trading platforms available today.
- Availability of a demo account
- Low cost to start trading on live accounts
- A very transparent working model
- A massive size of signal providers to choose from
- A wide selection and support for mobile apps
- Very social, followers are able to comment on trader’s performance and give feedback.
- Trades from each trader are very customizable
- It requires quite a bit of effort on your side especially when selecting traders to follow
- You will need to do regular monitoring of your account
- Using ZuluTrade will require you to have a bit of knowledge on risk management
- The slippage with some brokers can be quite high