ZuluTrade Profit-Sharing


#2

That would be fair for all,logical and in line with the best industry practices.Cheers!


#3

Great! That’s right.


#4

this is really great. but what will happen to current system? i mean will a current signal provider can have the option to offer profit sharing. or he has to be open new signal for that, means build new record from beginning again.


#5

Hello there @REAL_SURFER

Thanks for the question!

Good news for the Traders! No action is required from your end! :grinning:

As a Trader, you may have both type of Followers copying your strategy: the ones operating on a Classic Account and those who have selected the Profit-Sharing Model.

For the Followers operating on a Classic account, the existing compensation scheme will not change (volume based model will apply).
For the Profit-Sharing ones, you will be compensated based on the new payment scheme!

No need to open a new Trader account, no need to generate separated trading signals per Follower account type!
Great isn’t it?


#6

If I lose money in a month, will I pay the trader?


#7

Of course NOT! @AAA1522139F

You will only pay the Trader (a 20% Performance Fee) in case you have a profitable monthly PnL.

The calculation of the amount is based on the profit above High Water Mark (“HWM”). This means that you won’t be charged with any Performance Fee during Recovering Losses Period (check the example below).

For example:

Period Profit/Loss Follower's
Monthly PnL Amount
Follower's Total PnL old HWM new HWN Follower's
Charge
June Profit $100 $100 $0 $100 $20 - Profitable Period
July Loss -$50 $50 $100 $100 $0 - Losing Period
August Profit $50 $100 $100 $100 $0 Recovering Losses Period
September Profit $200 $300 $100 $300 $40

I hope my message was clear and helped you understand exactly how his new model works :wink:


#8

when can we expect the launch ?


#9

Hi, i have a question as a Trader, for example, if my followers make profits then they i take 20 % commission of their profits, however if they suffer losses no commission will be received. In what way will i be penalized as a Trader, i mean what are the figures.
Thank you in advance


#10

Hello @DM1788954F!

Thank you for asking this question, which allows us to explain the way our Traders’ Payment - Reserve Scheme works.

Case 1:
Follower’s Monthly Performance Fee (20% of the Profit above High Water Mark) is split, as follows:

  • 50% is credited in the Trader’s account, while
  • 50% is credited from Reserve Bucket (if applicable - see the example below)
  • 50% is placed into the Trader’s Reserve bucket in order to ensure future performance.

Case 2:
In case of underperforming however, the Reserve amount will be deducted (penalty) by 20% of the generated losses.

Case 3:
In case of a Recovering Losses Period, Performance Fee will not apply, yet the Trader’s reserve will be increased by 20% of the generated Profit. (see example below)

Each Trader holds one Reserve Bucket for all his Profit-Sharing Followers.

Better see this with an example:

In June, a Trader makes a profit of $1000 - This will be the HWM.

  • The Follower will be charged 20% out of the accumulated profit ($1000): $1000 x 20% = $200
  • Based on the Payment-Reserve Scheme, for the Trader:
    • 50% of the Performance Fee paid by the Follower will be credited in the Trader’s account immediately: $200 x 50% = $100.
    • The same amount (50% of the Performance Fee paid by the Follower) will be credited in the Trader’s account from the Reserve in case there is available amount. In this case there is no Reserve
    • 50% of the Performance Fee paid by the Follower will be reserved in the Trader’s Reserve Bucket: $200 x 50% = $100.

Monthly Reserve Amount = $100
Total Reserve Amount = $100


In July, the Trader has a negative month (-$100)HWM remains $1000.

  • Performance Fee will not apply for the Follower
  • The Trader will be penalized for the loss generated on the Follower’s account: his Reserve amount will be deducted by 20% of the losing amount: -$100 x 20% = -$20.

Monthly Reserve Amount = -$20
Total Reserve Amount = $80 (=$100 - $20)


In August, the Trader makes a profit of $500New HWM $1400

  • Performance Fee will apply for the Follower, only for the $400 (amount above new HWM): $400 x 20% = $80
    Recovering Losses Period: The first $100 is considered as Recovering Losses Amount (loss generated on July) and the Follower will not be charged any Performance Fee, however, the Trader’s Reserve amount will be refilled again with the amount of $20 (again, 20% of the Profit generated during the Recovering Losses Period).
  • The Trader will now receive:
    • 50% of the Followers Performance Fee will be credited immediately: $80 x 50% = $40.
    • 50% of the Followers Performance Fee will be credited from Total Reserve Amount reserved so far: $80 x 50% = $40
    • 50% of the Followers Performance Fee will be reserved in Reserve Bucket: $80 x 50% = $40.

Monthly Reserve Amount = +$20 (from Recovering Loss Period) -$40(credited to Trader from previous Reserve) + $40 (placed into Reserve bucket) = $20
Total Reserve Amount = $100 (=$80 +$20)


Note:
As you can see, the Reserve amount is dynamic and changes based on the Profits / losses generated on a Follower’s account on a monthly basis.
The Trader will get compensated for his profitable trades and will be penalized for the losses he/she will bring on a Follower’s account!

I hope I helped!


#11

Thank you. All is clear now.


#12

I beg your pardon, but I think there is a mistake in the eabove equation:

80$-40$+40$ is NOT 120$!!! It is 80$! So, the amount in the reserve bucket is 80$, NOT 120$, right?

And I have another question:

What will be the rate that the commissions decrease for the follower, if the follower decides to switch to the profit split-method??? How much can the follower save?


#13

Hello there @AAA1691971F

Thank you very much for your valid comment, indeed, the equation was incorrect, the Total Reserve amount is $80, and we have updated our comment accordingly, to avoid confusion.

Regarding your question,

What will be the rate that the commissions decrease for the follower, if the follower decides to switch to the profit split-method??? How much can the follower save?

Note that for AAAFx clients, the trading cost will be reduced by 0,5 pips per standard lot traded.
For example: for USD accounts, round turn commission will be $15 instead of $20.

Thank you again for your comment! :+1:


#14

How does it work then if a trader keeps losing trades open at the end of the month to ensure they remain in profit and receive their followers fee, then they close the losing trades the next month and the follower takes a loss after having paid the commission to the trader.


#15

im little bit confuse, according to my calculation trader is not getting penalized fund. but in the section RECOVERING LOSS PERIOD mentioned that previous 20 is recovered in traders account.

here i calculate is simple way

credit: traders receiving amount
hold : which is in bucket

so according to the given scenario :slight_smile:

credit : 100(from junes profit) + 0 (from july) + 40 (from august profit) + 40 (from hold) = 180
hold: 100(from junes profit) - 20(from july) + 40 (from august profit) - 40 (to credit) = 80

in total his earning (credit + hold is 180+80 = 260

but this amount should be 280, bcz his total profit is 1400, so 20% is 280 .

either u maybe missed some thing or trader will not recover/get which will be deducted as penalty fee.

please let us know in detail.

thanks


#16

another thing is do u limit some option or add some more option for profit sharing section. bcz right now follower can limit the no of trade. but it may happen that trader opens 5 trade at a time, and follower only allows 3 only. then 1st 3 closed in loss and rest 2 covered all the loss + make some profit, then how trader will get compensated or punished?


#17

Hello @REAL_SURFER

Thanks a lot for your valid comment! :slight_smile:
We have updated the calculations - we hope it is more clear now.

Regarding your inquiry

another thing is do u limit some option or add some more option for profit sharing section. bcz right now follower can limit the no of trade. but it may happen that trader opens 5 trade at a time, and follower only allows 3 only. then 1st 3 closed in loss and rest 2 covered all the loss + make some profit, then how trader will get compensated or punished?

In Profit-Sharing Model, the Trader is the Master of the Game, the Followers may not interfere with the transmitted signals, they are only allowed to place the following custom settings:

  • Capital protection
  • Fixed or Pro-rata
  • Number of Open Positions per Trader

The Profit-Sharing scope is to endorse the direct communication between Follower and Trader. The Traders should present their strategy and recommend settings for profitable trading results in their Followers accounts. As you may understand, both Followers and Traders will need to work together in order to achieve a common goal.


#18

thnaks for the clarification


#19

Can the traders to choose to receive a Commission for transactions, or % of the profits?


#20

Hello @EaltaSystems

Traders will not be able to select a specific Compensation Model. The Trader is compensated according to the account type selected by the Follower. This basically means that for Profit Sharing Follower Accounts, the Trader will be compensated based on the Profit-Sharing Model, while for Classic Account Followers, the Trader will be compensated based on the volume of lots traded (0.5 pip/lot). As you can understand, it is totally up to the Followers to select between Classic and Profit Sharing Account type. Followers may also have multiple accounts so as to use both account types.

Hope this helps! :slight_smile:


#21

Since the payment method conditioning the trading style of the traders, I think that must be the trader and not the follower who determinate how will charges for his trading service.

For instance, in my case, I don’t like performing a lot of trades, for getting many pips, but is clear that with the 0.5 pips per trade payment scheme, any trader is pushed to do “overtrading” for obtaining a reasonable income.
Is well known that the “overtrading” and scalping is the best way for ruining an account.
Hence, in my case, as I don’t like doing overtrading, and I makes trades with a lot of carefully for not dissapointing my followers, does not suite me the followers that suscribe my signals, choicing tvhe 0.5 pip per trade payment, and only I want the followers with the new scheme.

Due all this, I think that must be the TRADER and not the follower who determinate how he want to charge for his service.