Forex Capital Protection - ZuluGuard™
How Capital Protection works
ZuluGuard™ is a highly advanced protection system that traces patterns of unwanted behavior from the Traders you follow and lets you choose what actions to take to protect your invested capital.
An example of unwanted behavior is when the Trader's performance deteriorates and this impacts the PnL of your account.
For that reason, ZuluGuard™ will constantly monitor the performance of the Trader and offer a trailing protection of your funds by securing profits and minimizing losses to the amount you have set at your account's base currency.
So when the losses experienced exceed your predefined value, ZuluGuard™ will step in and protect your account. Please note that ZuluGuard™ monitors realized and unrealized trades, so open trades are taken into account. This means that the Trader can be profitable overall, and ZuluGuard™ can take action when the profit is being reduced! *
An Example
A detailed example is provided below, assuming you have set the Capital Protection at $1000 and only one trade is open at a time.
| Trade # |
Max DD($) while the trade is open |
End PnL ($) of the trade |
Accumulated PnL ($) of Trader in your account |
ZuluGuard™ Capital Protection |
Worst-Case (Final) PnL from this Trader if ZuluGuard™ takes action!1 |
| 0 |
n/a |
n/a |
n/a |
1000 |
- 1000 |
| 1 |
-500 |
-500 |
-500 |
1000 |
-1000 |
| 2 |
-100 |
1900 |
1400 |
1000 |
400 |
| 3 |
-400 |
1300 |
2700 |
1000 |
1700 |
| 4 |
-700 |
-7002 |
2000 |
1000 |
1700 |
| 5 |
-300 |
-3003 |
1700 |
1000 |
1700 |
Since at Trade #5 a loss of -$1000 has occurred (-$700 from end PnL of Trade #4 and -$300 at floating positions at Trade #5)
your Capital Protection level of $1000 has been reached, and ZuluGuard™ will take action!
So the Final PnL you will be left with from this Trader is the previous Worst-Case (Final) PnL of $1700
Notes
- Worst-Case (Final) PnL represents the end monetary amount (PnL) your account will be left with from this Trader, assuming ZuluGuard™ will take action in the future
- If you combine the end PnL of trades #1 and #4, it exceeds the Capital Protection threshold of 1000. However since in between these trades profit has been realized, losses from this Trader have not at this point exceeded 1000
- Assuming you have selected the ZuluGuard™ action ‘Close all trader's trades’
So ZuluGuard™ will detect when the Trader's performance has deteriorated and at the point when the losses reach your predetermined amount, it will take action to safeguard your account from experiencing any further losses.
Changing your Capital Protection
Please keep in mind that ZuluGuard™ takes into account the performance of the Trader from the moment you enable the Capital Protection scheme onwards. You can re-adjust the amount of Capital Protection as per your requirements, and allow for greater or less capital exposure from each Trader, according to how you evaluate his performance.
Setting value to 0 will disable this feature.
* Important Disclaimer: In volatile, or fast moving market conditions, ZuluGuard closing signals will be filled at the prevailing market price, which may be vastly different from the desired price. Due to this, there may be substantial losses, as ZuluGuard does not always guarantee the desired Protection.