When traders go rogue


Picture the scene, when reading the profile of a well-known trader: 7 trades max, historically. “No trades hanging day by day”. “95% of trades closed within a day”. Smooth profit curve over a long timescale. Pretty responsible trader, you’d think! Good results and a good trading system, you’d think! Good one to follow, you’d think!

But then… On 21st Oct 2020, this trader bought EURNZD right at the top of a trend channel, no SL, right when the price was turning. What happened? They slapped another buy trade on, a mere ten pips lower. And then, whacked ANOTHER buy trade on, just 20 pips away from that! And another. And another. You can imagine what happened when the price really nose-dived.

Instead of bailing out for a modest loss, the trader upped their max trades ceiling by more than 50% up to 11, piling more trades on. Still no SLs. Good job my max trades was set to 7, which limited the lunacy and saved me. Averaging down is not a strategy. Any old bufoon can average down, often until their account collapses!

It’s 10 Nov. Almost 3 weeks later. I’m 3000 pips in the hole because of one trader’s irresponsible actions. Every day huge swap fees accumulate on those open trades. I’m working on cleaning up these disastrous trades myself, for I fear that this trader will close them as hastily as they were opened, crystalising a massive loss.

<<<Edit: 11 Nov. 4000 pips down. EURNZD is on an express elevator to hell. Read the chart and weep.>>>

So, let’s summarise why I’m annoyed. I followed what I believed to be a responsible trader, and they betrayed investors’ trust. They:

  1. Abandoned their stated strategy;
  2. Abandoned their aim of keeping trade life short;
  3. Recklessly slapped ever more trades on, against the trend;
  4. Bust through their previous max trades ceiling to keep adding trades.

Investors have a duty of care to investigate and select traders carefully. I get it. I really thought I had exercised that diligence. Please folks, be careful out there. You can do your homework, checking trader performance, examining their strategy description, but traders can still go rogue like this. Use your ZuluGuard. Set your max trades. Choose traders who use SLs. Choose traders who have a genuine R:R based strategy.

If you ask me, ZuluTrade also have a responsibility to investors. There should be clear warnings for investors and penalties for traders when they:

  1. Deviate from their stated strategy and trading profile;
  2. Utilise martingale (not in this instance, but as a general principle);
  3. Average down endlessly;
  4. Repeatedly raise their max trades ceiling;
  5. Don’t utilise a SL.

Please, ZuluTrade… Act on this!!! Help investors and responsible traders alike by highlighting and discouraging dangerous trader behaviour!

Lesson learned. I’m so fed up with trading charlatans on here whose “strategy” is just to pile on tons of trades indiscriminately, hoping for a trend change. This is not responsible trading! Avoid them like the plague. They’ll pop your account in no time.

Greatest Lessons Learned in Forex