ZuluTrade
| Company type | Private |
|---|---|
| Industry | Financial Services |
| Founded | New York, NY, 2006 |
| Headquarters | New York, NY |
Key people | Leon Yohai, Founder Roula Pelehrinis, Global Sales Operations |
| Website | zulutrade.com |
ZuluTrade Inc. is a financial services company, headquartered in 48 Wall Str., New York, NY, with offices in Hong Kong, Shanghai and Athens, Greece. Operating in the foreign exchange market, owns zulutrade.com, an online foreign exchange autotrading service. It was founded back in 2006 by Leon Yohai, a .com entrepreneur and Kostas Eleftheriou [1].
Business model
ZuluTrade is a free peer2peer on-line trading network between FX traders worldwide and everyday people that don’t have the time or knowledge to trade the markets. ZuluTrade cites as its advantage the following 5 features[1]:
a) Auditing trading accounts in real time by controlling the execution flow of each trade in the service and by not allowing users to upload statements (sometimes false) to prove their performance,
b) Executing in real time trades into followers live trading accounts,
c) Funds safety as funds are kept within the user’s live brokerage account,
d) Privacy as live followers do not give discretion to any 3rd party on their account,
e) Diversity as 20 brokerage firms globally are connected with the ZuluTrade peer2peer network[2].
ZuluTrade receives compensation per trade per contract from the brokers connected within its peer2peer network and splits the compensation with the Signal Provider that have originated the trades which have been executed successfully on one or more live follower’s trading account.
Technical Description
In contrast to fully automated or black-box foreign exchange autotrading, ZuluTrade uses the Signal Provider method: the service audits Forex experts that are members of the service, known as signal providers, and ranks their performance by using ZuluRank, a proprietary rating algorithm. Traders can then select one or more Signal Providers and the service automatically translates signals into trades in the trader’s broker account. ZuluTrade’s autotrading software is integrated with popular FX trading platforms such as MT4, Saxotrader, FXCM trading station, Act Forex platform, GAIN trading station, Ducascopy trading station, GTS station etc. The service is server based, and works with no human intervention whatsoever.
ZuluRank
ZuluRank is a proprietary algorithm that ranks traders by analyzing different factors, such as the amount of trading activity, the drawdown of each trade and its P&L, frequency of the trader’s presence in the system and other variables. ZuluRank creates a number of lists based on the Signal Providers’ strategy and performance, such as Best Providers, High Risk Providers, even Worst Providers that can be exploited positively through the Hypothetical Reverse feature.
Hypothetical Reverse
The Hypothetical Reverse feature enables traders to potentially benefit from the worst performing signal providers. Through this option a trader may (automatically) do exactly the opposite of what a signal provider does; for instance, when they “Buy” traders can actually “Sell” and vice versa. This feature is based on the notion that when reversed, the worst traders’ signals can prove profitable.
Signal Providers
Signal providers place trades on their account and all live followers that have selected a specific provider receive these trades on their live broker accounts, provided they have sufficient funds to cover for the transaction. Signal providers get paid for each traded lot of their signals. Signal providers cannot promote their strategies; they are trying to achieve a positive performance which would give them a higher ranking in the relevant category and a motive for clients to select them in their portfolio.
Controversy
A number of controversial disputes concerning the operation of the ZuluTrade service have occurred as a result of a highly competitive and technical in nature market[3].
Signal Providers multiple name dispute
Signal Providers can open multiple accounts with different names on the ZuluTrade service, in order to create diverse strategies under each name. After trader’s concerns that this practice undermined the transparency and reliability of the Signal Providers, ZuluTrade now displays all linked names to each Signal Provider’s profile.
Live Funds
After concerns that Signal Providers trade with virtual funds, ZuluTrade introduced several measures in order to separate real and virtual accounts. A “live followers” tab lists all users that follow the signals of a specific signal provider with real money. Additionally, Signal Providers that trade with own funds are distinguished by means of a relevant symbol. Finally, all trades that have been supported with actual funds are highlighted with the word “LIVE” next to them.
See also
References
- ^ "ZuluTrade.com Revolutionizes Autotrading of Foreign Currencies Online". Yahoo Finance. 2009-11-03.
- ^ Michael Greenberg (2009-11-03). "CMS teams up with Zulutrade, named Best Broker USA". Forex Magnates.
- ^ Walter Hamilton (2009-11-28). "Americans boosting investments in foreign markets despite high risks". The LA Times.