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Archive for November 2009

One Person. 97 Trading Systems.

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Can one person maintain 97 trading systems? This is exactly how many trading systems are registered to one name on zulutrade.com. Some of them are good. I’ve subscribed to one.

Or is it an institutional operator? Unlikely so.

Written by A.S.

November 28, 2009 at 10:12 pm

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Zulutrade: Only 7 Systems From Top 300 Are Good

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I trade myself and constantly look for improved ways to allocate capital as well as to network with traders and investors. Last month about 5% of my trading activity was outsourced to system vendors listed on zulutrade.com. The result is flat.

System autotrading currently is still unreliable. Performance reports are inaccurate, trading cost is increased to pre-internet era level, trade execution fails too often (you may be left with open position indefinitely due to failed exit trade …).

But those are technical issues. Conceptually, there’s nothing better invented as zulutrade.com, collective2.com or covestor.com. I intend to use these services more and more.

I just set up system trading portfolio for December. The report is sent out to existing and potential customers. Based on historic performance stats, the portfolio (to be traded in test account only) should deliver 20% monthly with 33% drawdown as the worst-case scenario.

It is test account, it should be traded aggressively, even criteria for trading system selection may be somewhat lax … Still, I’m a bit surprised that I could find only 7 systems out of Top 300 (as ranked by Zulu) which are presumably good. All those are added to the test portfolio.

The key issue is that by far most “top performing” systems achieve the result by booking 10-20 pip profit per trade. In live trading conditions such “profit” is eroded or transforms into a loss after real life fills which are heavily taxed by mark-ups and slippage.

Written by A.S.

November 28, 2009 at 8:54 pm

Posted in Uncategorized

Turning Up Heat on Zulu/Saxo Account

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Zulutrade has a feature called “Margin Call -o- meter”(MCOM). Generally, it is very useful tool, particularly to discourage unexperienced persons to take excessive risk. Just like warning signs on the cigarette packs …

I’ve added 7 signal providers to my account. Each is enabled for one trade and one lot only. MCOM is in the red with a reading of 103.8%. Every time I log in, there is a warning that the positions limits exceed recommended trading size and there is a risk or margin call.

However, if all the signal providers open max allowed positions, the account would be exposed to about 1:1.8 leverage. In real life, max margin utilisation in Saxo account is just about 1%. Even is all signal providers open max positions and close each and every trade with 200 pip loss (a remote, yet real possibility), the damage would be limited to about 5% of the account value.

I’ll override the recommended trade limits to increase the leverage limit to about 1:5 and set % of equity stop-loss limits. If at any time loss exceeds 10% of account equity, I’l review the limits again.

P.S. Unless you check your account at least daily, I’d suggest to stick with trading limits as recommended by zulutrade MCOM.

Written by A.S.

November 9, 2009 at 9:03 pm

Zulu/Saxo: I Won the Lottery

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Today I [finally] got SaxoTrader platform activated. I still received nothing from customer support to my e-mail, but called technical support and he was very efficient — the access problem was solved and key activated withing, literally, seconds.

On first log-on I was surprised to discover a ton of residual open positions. The positions were not visible on zulutrade log. I should admit that I made quite a number of manual trades of various sizes through zulutrade and this may have somehow derailed the system. The positions were profitable and I felt as if I’ve won a vacation in Miami. But the very fact of gross position mismatch between zulutrade log and broker account is alarming …

Once I closed all the residual open positions, I had a bit of more user experience of struggling with a really “sticky” long USD/CAD position. It was closed by the signal vendor, but it was displayed as open in Zulutrade log. The broker account was short. I clicked on “Close” — the trade added more short position in Saxo acc, but remained open in zulu. I clicked on “Close All Trades” in zulu — again, this added one more position to saxo and still remains open in Zulu. I squared the position in Saxo account and contacted Zulu with a request to remove the trade from the log. They said that the trades in the log will sync with trades in broker account and I only need to wait. Ultimately, it synced indeed.

The conclusions are: (1) Zulu to Saxo interface is unreliable and regular manual position checking is mandatory, (2) do not place manual trades through Zulu as this may somehow derail position match, (3) Saxo records closing trade as new trade rather than a trade to offset a previous position. As a result, a lengthy trade log gets created in the broker account and it needs to be cleaned manually.

Written by A.S.

November 6, 2009 at 8:48 pm

Zulu/Ava Live Account Testing (ongoing, details soon)

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To open account with AVAFX is a breeze. Fill out an online form, fund the account with a credit card and you’re ready to self-trade the account in, literally, less than 5 minutes.

No need to send original documents, you can upload them.

I’ve set the account up several days ago, but still waiting for either AvaFx or zulutrade to send a message that the account is enabled for autotrading through zulutrade.

Written by A.S.

November 6, 2009 at 12:16 am