A review of Zulutrade: Automatic trading

Eduardo Montero

Author: Eduardo Montero

Last Updated on March 30, 2022

As you probably already know, certain Forex brokers offer automatic trading systems using signals. Among these systems one in particular is notably appreciated by traders, Zulutrade. Here are a detailed review on this investment method.

The operation of Zulutrade:

The trading signals operation used by Zulutrade differs from the other analytical methods in the sense that it relies on the principle that if it is possible to identify the best members of a group then it is possible to determine probability calculations according to their own signals.

By studying the winning and losing signals, Zulutrade calculates which are the better performing signals suppliers thereby enabling their members to trade using quality signals and avoid the scams.

The Zulutrade model therefore offers certain very strong advantages concerning automatic trading, but that is not all. In fact Zulutrade also offers access to the analytical methods of the signal suppliers and therefore offers the opportunity to understand some of the reasoning that leads them to foretell one trend or another.

Zulutrade also demonstrates perfect transparency and an objectivity that is essential for maintaining its trade. The signals it offers are therefore studied in a neutral manner and are checked before being communicated to their clients whereas other brokers are a little less particular over the quality of their trading signals.

A system based on a community of skilled traders:

Another particularity of the automatic trading at Zulutrade concerns the community that is centred on a number of serious and experienced independent traders. Through exchanging their ideas, strategies and viewpoints on the markets and their movements, the registered traders benefit from a truly interesting and complete methodology. With the Forex, as with all the financial markets, unity is strength and this is why brokers around the world are increasingly attracted to what is referred to as  ‘social trading’.

The classification of the best signal suppliers and its continuous development is proof of the honesty and objectivity of Zulutrade in the context of trading signal providers. In fact, when a supplier makes a mistake, their position in the classification is immediately revised downwards and replaced by another signals provider judged to be more effective and profitable by recent general achieved results.

Our conclusion on the automatic trading from Zulutrade:

We can therefore summarise this analysis of the automatic trading solution from Zulutrade as being generally positive. It is currently one of the best methods of trading without any particular knowledge of the Forex and of making rapid profits by speculating using quality signals information and objective reasoning.

Zulutrade also offers the possibility to start with a free demonstration account for new subscribers to test the profitability of the signals offered. From there, and when you are satisfied with the trial, you can subscribe to a monthly membership to benefit permanently from this valuable assistance.

Benefit from the high performance of other traders

Eduardo Montero

Author: Eduardo Montero

Last Updated on March 30, 2022

Whether you are just beginning or you are a seasoned Forex trader, it can sometime be difficult to prepare an efficient and lasting trading strategy. In fact, it is necessary to adapt to new market conditions to maintain profitable performance.

To resolve this problem, it is now possible to benefit from other traders’ high performance using practical advice offering a strong profitability without the need for any online trading experience. To understand how this trading method works you will find here some explanations and details on social trading together with innovative features in this sector.

How can other traders help you gain money?

On the Forex, as you certainly knew, there are several categories of traders, each of them showing different results, sometimes with major differences. To provide you with a better understanding we will here broadly distinguish between experienced and beginner traders. It seems clear that traders with a lot of experience are more likely to more precisely determine the future trends that will affect currency pairs, and thereby, accomplish more profitable investment on a short term basis.

For the beginner traders, the first trading months are often more complicated and it is not unknown for some to suffer severe losses making it more difficult to maintain their long term positions.

By analysing this difference, one can conclude that if the more experienced traders could give trading advice to the beginners that would help them to make profits quicker.

But the act of accessing the details of the experienced investors’ trades can also represent a very interesting way of learning. Although one can learn from one’s mistakes, one can also learn from the success of better traders. By closely following the strategies implemented by these seasoned traders, little by little, you will understand the logic behind opening or closing one position or another or even understand the consequential elements of the implementation of one order or another.

The other traders can be an important starting point on the Forex, but it also enables other traders, even those with great experience, to follow others with the objective of learning information and even improving ones techniques.

How to follow the other traders? The tools at your disposal

What we call “social networks” appeared fairly recently and, to summarise, represent the exchange of information, the responses and advice exchanged online between traders. Accessing information is indeed much easier now than before when faxes and mail were the principal methods of communication. In fact, we have seen various sites and forums develop with the Forex as the principal subject and on which traders come to share information.

But more recently, certain brokers, such as eToro, decided to use this social networking to create specific tools allowing members to both see, follow and even to copy the strategies of other more experienced traders.

Indeed this is what eToro’s OpenBook offers to all platform trader members. You can see the trade details of other members and choose to follow or to copy the strategies of those that you consider to obtain the best results. In this manner, you can make immediate benefits and also limit your risk while teaching you in a practical way.

The main types of trading on the Forex

Eduardo Montero

Author: Eduardo Montero

Last Updated on March 30, 2022

No rule is imposed concerning the durations of trading on the Forex. Indeed, it is up to each trader to decide themselves as to which style of trading to adopt, and this is due to the great flexibility of the foreign exchange market.

However, do not choose your strategy randomly but rather determine which corresponds best to you by concentrating on several criteria such as, for example, your available time, your investment capital amount or your capacity for stress management. We will detail the three main styles of trading in this chapter.

Whatever the strategy you decide to use, it is recommended to always refer to the daily chart or, even better, the 4 hour charts. This will enable you to notice the overall market trends as well as the support and resistance phenomenon.

Of course, hundreds of strategies are actually available and you can use them freely to elaborate and refine yours. The three styles we will detail here have been chosen due to their popularity and efficiency.

Short term trading

Short term trading is carried out over a short duration of a few minutes maximum. This strategy consists of taking position for a very short time with small profits. So, to fully benefit from this strategy you will need to use strong leverage effects.

Beware! This technique is really difficult to master and is more suitable for experienced traders. When well managed however, it allows the trader to profit easily from the different bullish or bearish trends.

Some advice

To trade on a short term basis on the Forex, you need to possess certain essential characteristics such as very good stress management, real time reactivity and a high availability. Avoid all sources of distraction and make sure you are in a calm environment without the risk of being disturbed.

Use correct analysis tools such as the minor support and resistance indicators and a 5 period moving average coupled with a 10 period moving average and, if possible, a five minute candlestick type chart.   

Trade only on strong currencies as GPB/USD, EUR/JPY, EUR/USD, GPB/JPY, because the other currencies will bring you only a very small profit over such a short period. 

Use a leverage effect ranging between 30 and 50, never beyond, and fix your maximum loss threshold at half of your profit objective.

Don’t aim too high. A profit ranging between 5 and 20 pips constitutes a reasonable objective.

Advantages and disadvantages

Even if this strategy requires a lot of self control due to the risks linked to the minor support and resistance breakout phenomenon, it offers the advantage of maximising your gains by taking benefits from the bearish and bullish movements of a trend.

Day trading

This strategy is without a doubt the most popular among investors all over the world. Its technique consists of opening positions in the morning and closing them in the evening.

Some advice

The qualities required for this type of strategy are good stress management, excellent knowledge of the markets and good short term trend analysis. Experience and flair are also important. Day trading on a very short term will only require a few minutes of your day (count around 30 minutes) as you have the possibility to place orders only then.    

The indicators to be used are the thirty minutes candlestick chart type, the major support and resistance indicators and a 5 period moving average coupled to a 10 period moving average.

Here again, trade only on the main currency pairs and be careful to not go beyond a leverage effect ranging between 20 and 40, fixing your loss threshold at half your profit objective. On this type of trade you can easily speculate on profits ranging between 20 and 50 pips.

Advantages and disadvantages

The only constraint of day trading is the need to carefully control the stop orders and the various market entry points. On the other hand, you will experience less stress while benefitting from the short term trends and their analysis.

Medium and long term strategies

Any position held beyond 24 hours will be considered here as a medium or long term strategy. However it is not recommended to trade and speculate on movements over several days as the longer the period is, the less the information you have will be reliable and your risks are therefore too high with no real guarantee of profit.

Some advice

Medium and long term trading is more especially the domain of experienced traders that have an excellent macro-economic analysis. It does not require a particular competence in technical analysis, the long term indicators are fairly rare and not very reliable. You must possess true investor logic. This strategy does not require much availability either and it is more considered as a complementary activity.

On a long term, you can risk trading on the currencies known as “exotic” but be sure to closely monitor the movements. Generally, all currency pairs can be traded on a medium or long term. Use leverage effects ranging preferably between 10 and 30, know that this type of strategy enables a higher generation of profits (from 60 to 200 pips). It is therefore unnecessary to take too many risks.

As with the other types of trading, your maximum loss threshold should never exceed half of your gain objective.

Use preferably daily and candlestick charts and always pay attention to major support and resistance indicators as well as the trend lines.

Advantages and disadvantages

Long term strategies can seduce with their capacity to generate large benefits. In fact, they do not require any special attention to variations observed on major trends but allow you to benefit from all the amplitude of the bullish and bearish channels. However, trading on a long term basis requires major financial capabilities that enable you to hold positions. Therefore, it seems this technique is generally reserved for major investors.

The different time frames for technical analysis

Eduardo Montero

Author: Eduardo Montero

Last Updated on March 30, 2022

The time frames, or time units, proposed by the Forex trading platforms are the essential elements for the implementation of an investment strategy based on currencies or CFDs. But what are the different time frames available and how to choose the right one to use for the type of trading you wish to implement? Here you can find the answer to those questions.

A timeframe: What is it?

A ‘Timeframe’ is a unit of time with which we analyse a trend; they are displayed in the form of charts by the brokers.

These units of time and their choice are of paramount importance as it is necessary to use the right time frame according to the life duration of your positions. But the choice of a time frame also depends on the asset that you trade and its level of volatility as certain assets move quickly with a high volume whereas others take more time to gain or lose points.

It is important to remember here that timeframes serve above all to identify the trends within other trends.

The use of time frames in the interpretation of trends:

When we observe a rising or falling trend on a daily chart, it is important to bear in mind that this trend is itself composed of micro-trends over very short terms that, placed end to end, give the global trend over the long term.

According to the expected duration of your trade and the moment you take position, it is primordial to take into account the different timeframes. For this we generally implement a particular method of analysis that takes into account the different periods and ensures the best presentation of observed movements.

Timeframes according to the trading method:

According to your strategies and the Forex trading method that you use, you can choose the most appropriate timeframe. We can therefore associate different trading styles with timeframes in this manner:

  • For a strategy of Forex Scalping, with targeted profits of between 2 and 10 pips, you would best opt for a time frame of 1, 5, or 15 minutes.
  • For intra day trading with targeted profits of between 10 and 50 pips, time frames of 5 or 15 minutes or those for 1 or 4 hours.
  • For day-traders with profits set for between 50 and 100 pips, the time units from 1 to 4 hours would be preferable.
  • Finally, for Swing Trading, with profits of over 100 pips, the preferential time frames would be Daily, Weekly or Monthly.

How to choose your timeframe:

Among the advice to follow for correctly choosing your time frame, we must reiterate that if you only have a little time for trading then it would be preferable to choose longer time frames with a strategy of day-trading or swing-trading.

On the contrary, if you prefer to trade over short periods with a sustained and attentive eye on the market you may wish to opt for scalping or intra day strategies and choose short time frames.

The Strategy of Hedging on the Forex

Eduardo Montero

Author: Eduardo Montero

Last Updated on March 30, 2022

Although most trading strategies applicable to the Forex are aimed above all at making large profits, certain strategies have the unique aim of enabling you to cover certain other existing positions to limit your possible losses. This is the case for the strategy named Hedging which consists of using a precise method of buying and selling currency pairs by covering riskier positions. Here are some explanations that will help you better understand this technique.

What is the strategy of Hedging on the Forex?

As we have just noted in the introduction, the strategy of Hedging on the Forex is not aimed directly at making profits by taking position on a currency pair, but rather at taking certain positions for covering others.

The use of this method offers the advantage of being both simple and rapid and therefore accessible to all traders, even total novices. To summarise, once you have taken position on a currency pair that you wish to cover in case of a drop in its rate, you take an inverse position over the short term for the same amount as that of your first position. Thereby, if a drop occurs in the rate of your main pair, you will have the possibility of recovering part of the points lost due to your inversed position.

However, the Hedging strategy can go much further as you can use it simultaneously on several pairs. As an example, imagine that you take position on the USD/JPY on the rise. You can then use an asset that is inversely correlated to the dollar to cover this first position. Oil or gold would be an example of a good choice in this situation for Hedging.

The advantages of using a Hedging strategy on the Forex:

There are of course other methods that enable the covering of positions on the Forex, but Hedging offers a number of advantages. One of them being that this strategy helps you to avoid acting impulsively to an inversion of the trend by closing your position too early and so missing certain opportunities.

On the Forex this technique is particularly recommended due to the low cost of transaction fees or spreads applied to the currencies. Selling your covering position will therefore not be very expensive.

Finally, it is particularly advantageous to benefit from this method of covering your positions when you invest on the foreign exchange market and you wish to increase your profits over long positions.

The few disadvantages of Hedging applicable to the Forex:

Of course, and as with any investment strategy, Hedging doesn’t offer only a plus side. It is therefore necessary that you have a large enough investment capital available to enable you to open several positions at the same time, without forgetting the margin applied by your broker that you need to include in your calculations.

If you carry out the correct calculations these spreads on one or another of your positions will be the only losses that you will experience.