By looking at the Zulutrade’s home page, at the bottom right, we find an equity line which looks really inviting, the “Zulutrade Top Traders” equity, which is described as the equity line of “the combined Top 5 traders’ performance”.
Passing over it with the mouse, we can look through it for a period of about 1 year.
This chart, since we keep an eye on it, actually since months now, it has been almost always an equity line at 45°, straight and perfect. In other words, the equity line of our dreams.
The obvious temptation would be to immediately jump into the Zulutrade’s Rank page to see who are these 5 fantastic top trader, and to use this strategy to get rich quickly.
But, is it really so easy to make profit with this strategy on Zulutrade?
As often happens, trying to simplify too much, you lose the sight of the real goal, and you take risks that could have been avoided.
That’s why we have always focused ourselves on really understand how to select a Signal Provider, how to find the intelligent ones, and how to set up a real winning strategy, rather than take advices from an automatic ranking system.
But, let’s see in details what we mean.
This performance, which historically has been always positive, strongly positive, might let us think it’s really easy to select the Signal Providers using this basic strategy.
In fact, it would be sufficient to include in our portfolio the first Top 5 in the rank to be successful! Nothing could be easier, right?
Eager to test this amazing strategy, months ago we dedicated two of our unlimited demo accounts to the use of this technique. As we suspected, already after the first weeks we started to experience some basic evident problems.
Actually, these logic and strategy result to be always negative both in the long and short term.
The ranking evolution of the protagonist Signal Providers, with their relative positioning, particularly in the TOP 20, is one of the most dynamic thing you can assist to on Zulutrade.
Times are not rare when the positions change day per day. Who is today in the TOP 5, maybe also first, tomorrow might be even out of the TOP 20, due to a temporary or permanent failure of its trading strategy. Not a strange thing, it’s already happened and we have noted it several times.
Let’s think about a Signal Provider who had made a unique false step, while those behind him were scoring a good series of profitable operations. Soon those who were on top goes under, perhaps also a lot.
This is the first major “obstacle” to this strategy. The TOP 5 change, many times.
They can change more than once a week, let alone in a whole year.
So, how can we follow this “strategy”? The answer is simple and obvious. We can enable on our account the TOP 5 traders of that present moment, and let them work, or we can update our portfolio at any change in the rank.
While the first type of strategy didn’t require our constant supervision, the second cost us a lot of effort, a factor that is clearly against the automation policy that has made Zulutrade so convenient.
That alone was a factor that made us totally reject this strategy. We wanted to create a system that could work alone, and without our constant and assiduous control.
Nevertheless, armed with patience, we continued in our double test of this strategy.
For months we have been constantly updating one account leaving unchanged the other, inserting in the first one from time to time the TOP 5 traders, excluding those going out, and we have regularly seen the rise of winning systems that remained in the top rank for maximum a few weeks, and then disappear.
Among the Signal Provider followed we can mention: FX178, Forex Over Drive, Fast Eleven, Mercury FX, Jiming, Rucom FIC, all Signal Providers that, reached the first positions, in different ways and periods, are then fallen down, going to occupy, for a long time, positions far away from the top.
Maybe at first impact you cannot fully grasp the problem. One could argue that at the failure of a Signal Provider, another one, better and more successful, will replace him.
To be clear, let’s try to explain this strategy also at a pure logical level.
As we all know, in the world of finance and trading, nothing can go up or down forever. All the things move up and down, in cycles, or waves, or whatever you like. Something rises, and retraces, and back again raising, or vice versa.
For the Zulutrade ranking is the same thing.
If a Signal Provider has reached the first positions, it’s likely that during his rise it has exhausted his power, his moment of strength, because nothing can last forever.
There has been a series of positive operations and profits, and thanks to this the Signal Provider has risen the rank. But after a positive series, there cannot be another positive one. Market does not work like that.
After a good run, there will be a negative, which will hopefully be shorter or less intense than the positive one that has preceded, and that will follow.
This is totally normal for the trading world. There’s nothing strange. Every market player knows it very well and doesn’t care about it.
The paradox, in fact, is in this TOP 5 strategy proposed by Zulutrade.
What is the point of beginning to follow a Signal Provider when it has probably ended his good series, and is about to begin the negative one?
We don’t see too much of logical sense here.
It’s also true that, in period of ranking stability, there have been some moments of profits, but the evidence showed that these positive moments of stability have been always ruined by the frequent moments of turbulence, in which Signal Providers that were just about to begin to lose arrived in the TOP 5.
It goes without saying that our evaluation of this strategy is totally negative, for both of them.
We lost money also with the account on which we just put the TOP 5 traders of that moment, because they were basically all traders which were working with martingale strategy. It’s very common to find those kind of traders in the first positions, they score good profit in their good series, but then when the bad one comes, they also score huge losses, very huge losses.
We can’t do anything but warm users from basing their choice of Signal Providers on this rank and on the TOP 5 strategy, first of all for the fact that none of our unlimited demo accounts, set with this logics, has never been in profit.
We have never made a drama though, because we have always evaluated, selected and focused on a Signal Provider for his true potential, with much more complete and logical process than a simple automating ranking system, using analysis processes built through our experience.
For this reason, we have always selected and followed many Signal Providers already before their arrival in the TOP 20, we stepped in at the right moment, and we exploited them when they were really giving their best.
This is the right way, which cannot be simplified so easily as this strategy tries to do.
You need to really discover what really makes a Signal Provider successful and what characteristics make it suitable for your investment strategy.
The Money Building project was born for this, and we are here to show you the way to follow.
See you soon.
Fabio