Dear FPA Forum Team / ZuluTrade Team,
I would first like to comment on Zulutrade’s comment: “ The Backtest function available on ZuluTrade's website is based on past data and cannot be used as a method to identify future drawdown or end results; the Backtest function can only be used to analyse and identify results with the benefit of hindsight.”
Any investor knows that the past performance of any stock, currency, commodity and signal provider doesn’t accurately predict the future, but all technical analyses and future predictions are based on past data and performance. Due to this fact, the accuracy and presentation of the past data is of utmost importance. Any experienced investor takes losses and understands that losses could occur due to the past not repeating itself in the future. However, if the past keeps repeating itself, and the investor makes a loss due to false representation, he is not at fault.
I would like to see Zulutrade take responsibility not only for my unnecessary losses, but also for the way they market themselves as an easy and profitable system in which to invest.
Zulutrade market their backtest intensively without mentioning all the flaws discussed in above posts. As quoted:
“You are able to backtest the performance of the Signal Providers` portfolio for a period of six months, concerning the trading signals generated by the signal providers”
Complaints were made about this on the Zulutrade forum:
ZuluTrade Forum • View topic - Backtesting functionality and
ZuluTrade Forum • View topic - Backtesting USELESS without taking stops etc into account
On 12 May 2011 Mario, from Zulutrade, said the updates will be made ASAP and on 7 June 2011 the same remark. As of today, these updates have not yet been made.
Zulutrade is supposed to be an easy way to invest in the forex, which means that the average Zulu trader would have very little prior experience and wouldn’t be able see the flaws without intensive investigation.
Zulutrade markets the amount of pips and $’s made by their top 5 Signal Providers intensively on their home page. But what they don’t tell you is that these same SP’s have, this past month, lost millions for their investors. Herewith follows a breakdown of a few SP’s that I have been following and the amounts lost:
Signal Provider September 2011 End September 2011 Investors money lost
Ranking Bal live acc.Ranking Bal live acc.
(Millions) (Millions) (Millions)
Sharper Trade 1 $23.40 297 $10.60 $12.80
Shooting Pips 2 $11.30 1211 $1.70 $9.60
Best Trader 3 $15.50 107 $4.50 $11.00
AtlanticPips 4 $13.20 630 $6.30 $6.90
Canadian FX 6 $14.00 5664 $3.60 $10.40
zuluHulu 10 $13.70 615 $2.90 $10.80
Zulumaster1 27 $19.90 510 $5.20 $14.70 Total $76.20
There are many other Signal Providers that were also amongst the top rankers that I have not been following that also lost a tremendous amount. I know that some traders had a combination of these SP’s and a few disabled the SP’s, which makes the total of $76 million lost a little exaggerated. But again, if one takes into consideration that I haven’t listed all the SP’s, it could be closer to the truth.
According to the SP’s performance pages approximately 90% of the investors that had the minimum required equity stated by Zulutrade, lost all their capital and about 50% that had double the minimum required equity lost all their capital.
I wrote a post on the forums to requests an auto deactivation setting in May 2011:
ZuluTrade Forum • View topic - Automatic deactivation setting I also wrote a letter to Zulutrade concerning this, without a proper response, which I have attached to this post. If this auto deactivation and stop setting had been available to the Zulu traders, less than half of their capital would have been lost during this past month.
If one reads the Zulu traders’ comments on the Signal Providers’ performance pages and looks at their public profiles, one would realise that more than 90% of them are losing money and the few that are in profit only trade for a short period.
Despite losing money I also had to deal with:
1. A lot of slippage. I had to request numerous audits and had to spend all my time trying to keep a record of everything.
2. Accounts that are disconnected for no apparent reason, causing me to lose the successful trades. Zulutrade’s response was that it is too complicated to calculate one’s loss of profit, but at least one didn’t have a loss.
3. I based some of my strategy on the ranking position on Zulutrade and a few weekends ago some of the top 10 SP’s moved to the 1000’s with no logical explanation. I contacted support and Jia, that helped me, didn’t even know how to find the SP’s that were ranked at the top for months! He gave me the most ridiculous explanations of why they had dropped. A few days later they were placed back in their old positions.
Now, based on the following, am I asking the question: Could we classify Zulutrade as a Scam or not?
Zulutrade knows from their own records, that 9 out of 10 Zulutraders lose all their money in the first 6 months;
They are also informed that their backtesting that they are advertising is misleading;
They know that the profit performance on their homepage regarding the top 5 Signal Providers’ Performance is not valid for more than a few days;
They also know that they can put systems in place to protect the Zulutraders’ capital, but they don’t, suggesting that it is too complicated;
As quoted from the Zulutrade website: “Autotrade the FOREX market like never before! Let ZuluTrade drive trades by specialists into your FX account FOR FREE [1]”
So, is Zulutrade a scam or not?
