As you may know, on ZuluTrade, signal providers only get paid if the month ends with a positive pip result. If theoretically this is a good thing, actually it’s bad. Very bad.
Example 1: Forex Cruise Control.
With so many subscribers and that invested capital (in May: $14 million), every month he made at least $100-200,000 out of commissions.
If his trades are not successful, what’s better:
- close them for customers’ safety
- keep them open until they are winning and keep the juicy commission
Who cares if followers will be margin called!
Example 2: 20 pips winers.
As usually he was a crazy bull, closing and opening identical trades. So, his month was going to end with a negative pip result.
“Disaster! I won’t get my juicy commissions!!”, he would have thought, so he started to trade on gold like a crazy.
Why he started to trade on gold? I will talk about this on the next post.