Estimated reading time: 6 minutes
Obviously, Zulutrade is the largest and the most sophisticated social trading network online. I have been a follower in Zulutrade for up to 3 years now and i want to share with you the most important reasons why followers especially the new ones blow up their live trading account by getting a margin call on Zulutrade.
The leading most important reason why followers get Margin calls on Zulutrade is GREEDINESS. Yes, most followers are greedy and wants to make quick money with social trading.
They’ve failed to realize that Forex trading is a consistent process and would destroy the capital of any greedy trader.
After losing their funds, most followers term Zulutrade as “Scam”.
This Greed has different facets and i will try to discuss them one after the other.
Owing to the fact that they’ve never tried the Zulutrade network in the past and are just new to it, many new followers tend to put in low or very low capital in their broker accounts and yet aim to make huge amounts of money with it.
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Note: If your language is not English, you should use the language dropdown menu at the top right hand side of their page to select your language.
This is because Forex trading is all about buying and selling and without enough funds, it will be very difficult to do just that.
Also, if you have enough funds in your trading account, you can let trades run longer in your account even with high draw-downs because you’re sure the price will still return to favor you but it’s just a matter of time.
Accounts with low start-up capital can’t withstand the high draw downs and in effect will get Margin calls unless necessary steps are taken to prevent that ugly incident.
Depending on your financial power, it’s generally advised to start live trading with not less than one thousand dollars. Any amount less than that will not only expose your account to a margin call but you can’t get satisfactory profit overtime with it.
In a quest to make quick money, many followers copy too many signal providers at a time without correct individual trader settings. Whenever the signal providers send their trade signals, too many trade positions will open up in their accounts thereby increasing the used margin, decreasing the free margin and Margin level %.
In effect, a minimal amount of drawdown from the trades can easily expose their accounts to getting Margin calls.
It is advised not to follow more than three signal providers at a time but this will in turn depend on your individual trader settings.
Often times, many new followers especially those with little or no forex trading fundamental knowledge risk their accounts to getting margin calls by using a lot size higher than their account size or equity.
How could someone stake one standard lot size in a trade for an account of less than $500? Awful right?
I assume that follower is indirectly asking the Forex “money wiper” to dry his/her account 😥
Generally, you are to use 1 standard lot size or less for accounts greater than $10,000, 1 mini lot size or less for those less than $1000 and 1 micro lot size or less for those less than $100.
The settings are generally dependent on you and the status of your live account.
Using a stop loss and Zuluguard for every trade signal sent by your selected signal provider is very important especially when you don’t check your account on a daily basis.
The stop loss value is generally dependent on the maximum you can afford to lose on a trade per signal provider. Many traders don’t use these settings leaving their accounts to the mercy of the reckless trader who can reach new high drawdown and blow up your account.
Even if you don’t use the stop loss setting for every trade, ensure you activate the Zuluguard’s Capital protection, single trade protection or Max open trades protection for any particular signal provider especially when you don’t visit your account often.
Hint: Always use Zuluguard for signal providers who trade GBP/JPY, USD/JPY, EUR/JPY because these currency pairs are really volatile and can get you into a stop out level in a twinkle of an eye.
There’s no doubt that high leverage in Forex trading can make or mar you. In Zulutrade, using a high leverage can expose your account to getting a margin call.
When you use a high leverage such as 1:400 or 1:500, the used margin is lowered considerably thereby increasing the free margin as well as the margin level %. This will allow you to open more trades than required and sooner or later, with a high drawdown, your account will reach a stop out level.
To avoid risk, it’s generally recommended you use 1:100 leverage.
As funny as it may sound, that little bar called the Margin Call -o- meter can help you limit the risks of getting margin call. Many traders disobey that meter by following too many traders at a time and increasing their lots for each trade.
This will of course be automatically indicated by the increasing figures in the custom meter.
To be on the safe side, don’t let this meter go beyond 100%.
Due to the fact that many Zulutrade followers may be entirely new to Forex trading, they may not know how to setup their accounts properly.
Jargons like stop loss, limit, offset pip may be confusing to them and this can lead to improper configuration of their Zulutrade account.
Every new follower or signal provider is advised to read and understand the Zulutrade user guide thoroughly before proceeding to use the network or get a quick answer to your questions by asking the live support.
There’s no need to read the user guide if you already have a mentor whose task is to teach you the most important things you need to know about the platform.
Yet to get a Zulutrade live account? Sign up here, fund your account and start making consistent monthly profits!
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