Auto Forex Trading
What You Need to Know About ZuluTrade
For the traders who like auto Forex trading, ZuluTrade is a service that has to be considered. Before signing up with this company, you need to know what you're getting into. *Spoiler Alert* I don't end up recommending this service. So it's not your typical affiliate review for Zulutrade that you've probably read everywhere else online. Here are a few things that you can expect when working with ZuluTrade.
What is ZuluTrade?
ZuluTrade is a type of Forex mirror trading system that you can access from your home computer. With this automated Forex system, you sign up for an account with one of several Forex brokers. Then you get to use their web-based trading platform that allows you to follow the signals of "professional traders."
How it Works
Once you set up an account with ZuluTrade, you can make your account follow various signal providers in the network. When one of the ZuluTrade experts places a trade on his account, the same trade is placed in your account. When the trade is closed, the trade is closed in your account.
Potential Benefits
The most obvious potential benefit of this system is that you can leverage the experience of someone else who knows what they're doing in the Forex market. If you're a newbie, this is very appealing. Another benefit is that it doesn't cost you anything on the front end. You don't have to pay for signals or anything like that.
The Bad
Even though on the surface, ZuluTrade looks like a winning idea, the execution is far from perfect. The way that the system is set up creates a conflict of interest for the signal providers and for ZuluTrade.
Signal providers are rewarded when they get traders to follow their signals. They make a percentage off of each trade that is placed in traders accounts. The problem is, the signal providers get a percentage of the spread which is paid regardless of whether a trade wins or loses.
Another problem with this system is that signal providers don't have to trade live accounts. They can engage in auto Forex trading on a demo account and then the signals will be sent to the live accounts of Forex traders.
So basically, you've got a trader sitting at home with a demo account (which means he doesn't have to worry about money management rules or real trading) and he gets paid every time he places a trade and someone follows it. Does anyone else see a problem with this?
Sure, you can look at the trader's results and they might look great. However, if the trader is not trading on a live account with real money, they might take big risks that you would never take in your own account. For example, they might open a ton of trades at the same time, all with huge stop losses and small take profits. This increases their winning percentage and puts their "fake money" at a huge risk if the market reverses.
The Verdict
We would not recommend using ZuluTrade at this time. While the idea behind it is great, the follow-through and the way that they've presented it is poor. You will most likely lose a substantial amount of money if you use this system over the long-term.
