I have 28 days use of a demo account using Forex Signal Providers (FSP) introduced by Zulutrade.
I originally signed up to just one FSP; The Hunter, chosen because of the relatively low drawdowns on the Zulutrade Performance Rankings and good profits over a 48 week period, but by Wednesday last (10th March) and mindful of getting something moving, I added two other FSP’s, in Big Money 7 and the other SL25.
It should be noted that none of the FSP’s are vetted by Zulutrade and it would pay to monitor them over an extended period if anyone was thinking of getting involved in this type of arrangement. Zulutrade’s use of the term ‘Experts’ to describe the FSP’s should be treated with a very large pinch of salt in the majority of cases.
Since the FSP gets a rebate from the spreads it is tempting and all too obvious that many are placing trades simply to recieve the 0.5 pip rebate from each trade they open for a subscriber (churning). Affiliates receive 0.4 pips for each subscriber they have referred and every trade opened on accounts. Zulutrade also take their commission from the spread. In a losing trade the only loser is you as everyone else has their cut accounted for and of course you will be the only one taking the risk in the trade apart from the person taking the opposing position.
I have only permitted 1 std lot and a maximum of 2 positions for each FSP at any one time giving me a Margin Call of around 10% on the demo account, certainly a little more than I would generally permit however, for this experiment it will have to suffice.
Big Money 7 has only shown this particular method on Zulutrade for a few weeks, but this FSP has 10 other accounts with them under various other names. The BM7 method is said to be a trend following system. SL25 on the other hand states that they are aiming for around 10 pips at a time with a stop loss of 25, which is surprising considering what happened next.
The FSP SL25 promptly opened two short positions on Thursday 11th, one on the EurJpy and the other on Cable which resulted in two large losses of 120 and 232 pips respectively. I have no idea if they had a problem closing out the positions due to a problem with the platform but I plan to keep a hands off approach with all the trades and not to intervene.
Two further shorts on the EurJpy followed on Friday 12th, one closed out for 13 pips profit the other closed on Sunday evening for another loss of almost 91 pips. This FSP placed two trades one a short the other a Long this morning (15/03/10) both on the EurJpy again, this time for two small gains 17.6 pips. Overall this FSP has depleted my 50k demo account to the tune of 403 pips and $4225 in a very short space of time.
Big Money 7 opened a trade (15/03/10) on the EurUSD going Short, and closed out around 118 pips to the good.
Current overall position -285 pips.