Saturday, August 11, 2012

Necessary Minimum Equity or How To Compare Zulutrade Signals

It is very important to pick the best suitable trader to follow when risking your own money.
There are many ways to choose and compare performance of ZuluTrade´s Signal Providers.
You can do so by factors like: profit, drawdown, max. open trades, win ratio, win/loss ratio etc.

But Zulutrade offers you another important statistical factor.

It is Necessary Minimum Equity. This number is calculated by Zulutrade and considers Signal Provider´s previous performance. In short it tells you: what Minimum capital is required to trade that provider if you trade with micro lots.

You can find this number in Signal Provider´s performance page in statistic tab.
Go to ZuluTrade performance page, click on any provider´s name and on his performance page look in bottom of statistics tab on the left side of page.

How to use Necessary Minimum Equity to compare providers:

Here is the way to use this info to compare providers.


Provider #1
Total profit 21,500 pips
Necessary Min. Equity: $1,480

Total profit 1,120 pips
Necessary Min Equity: $50

Your starting balance is $1,500

At first sight Provider #1 is better choice because his earnings are much better.
Now how it looks if we consider Necessary Minimum Equity?

Provider #1 : You have to have $1,480 for every micro lot to trade this provider safely.
It is all your starting capital, so you can trade 1 microlot only. That means that his generated profit 21,500 pips gives you $2,150 profit, not bad right?

Provider #2: To trade safely this provider you have to have $50 for every micro lot .So you are able to trade 30 micro lots or 3 mini lots.
Now, he generated profit 1,120 pips, with 3 mini lots it gives you profit $3,360 !

Things are not as they looked at first sight, right? Beware that there are a lot of providers who seems to generate huge returns, but if you want to trade them safely you have to go for micro lots and then they earn you much less than other responsible traders who have less earnings in pips but also small Necessary Minimum Equity indicator.

Auto-Copy my trades. My Necessary Minimum Equity is $46 only!

Happy Trading :)