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Signals Reviews

German Quality Social Trading: Ayondo from the Standpoint of a Follower

On Monday, we introduced you to Ayondo, a forex signals platform previously unexplored in our column. Compared to the industry's giants, ZuluTrade and eToro's OpenBook, Ayondo's size and reach among traders is in times smaller which explains why it's often overlooked and lags behind in popularity. Still, if you're a really good signal provider, the network could potentially become your new generous employer that is willing to pay up to $5 for each traded lot executed in a live follower's account. You can find all the specifics on becoming an Ayondo Top Trader here. Today, though, we'll shift perspectives and examine the platform from the point of view of the simple folk, the followers.


How much do you need to pay to join?

Luckily for all of us, the answer to the question above is nothing, just like there's no charge for signing up for ZuluTrade or eToro. All three networks allow you to open a practice account and familiarize yourself with the software before depositing actual money. The Ayondo trial is, of course, anonymous but once you become a believer and decide to go for a real investment, you'll be asked to provider personal and contract information, financial and employment details as well as your approximate level of experience with the financial markets – all in all, you'll go through the standard procedure of opening a live account, nothing more, nothing less.

Is the whole service free?

Yes and no. In a lot of ways, Ayondo is very similar to eToro's OpenBook. Both networks don't charge commissions and the only real cost is the spread you pay to the broker. With Ayondo 3 already on the market, the latest version of the platform, the only dealer you can open a new account with is FCA-regulated Ayondo Markets whose typical EURUSD spread is around 3.0 pips. Similarly, to trade on OpenBook you'll need to register with eToro and again pay a spread along the lines of 3.0 pips, way above what's considered average on the market.
That's where ZuluTrade has got its rivals beat. Instead of restricting users to its integrated broker alone (yes, the network also has one, the Greek AAAFX), ZuluTrade offers a plethora of other forex providers to choose from, as many as 57. Don't forget that to use their services, though, on top of the spread you'll also be required to pay a commission per copied trade which, depending on the broker, can go up to 3.5 pips. And this is where the stimulus to go for AAAFX lies – there are no extra fees apart from the spread which is typically around 2.0 pips or 1 pip lower than the one charged by Ayondo and eToro.

Why should you sign up?

Most importantly, because of Ayondo's ranking system for Top Traders which is in times more rigorous than that of ZuluTrade or eToro. In order to go up in the hierarchy – from a Street Trader, to Advanced, to Professional, to Risk-adjusted and finally to the highest Institutional career level – signal providers have to prove that they're consistently capable of generating profit. Becoming an Institutional trader, for example, will only be possible after they've been on the network for at least a year. Not to mention that there is also a set of robust requirements one needs to meet, including minimum trade volume, max drawdown allowed, max volatility as well as a minimum increase in equity.
Currently, there are only two Institutional signal providers, Value-Trading and Vortex, who've been streaming signals on Ayondo since December 2011 and August 2010, respectively. Over the last year, Value-Trading is the one who's been doing better, increasing his profit/loss ratio by close to 24% where Vortex's only went up by 0.28%. Still, if we consider these traders' performances since the day they registered, Vortex has a much higher P/L of 51% which is 17% more than that of Value-Trading. This, however, is very likely due to the fact that he has a year and a half head start.
The previous career level, that of Risk-adjusted traders, is also held by a very small number of users, just three, these being Patternicus, DailyPriceAction and Birdie345. Their performance during the past 12 months improved, in the same order, by 41%, 30% and 7%. Also, none of the traders mentioned so far have a max drawdown of more than 12% for the same time period. In comparison, ZuluTrade's number one at the moment, Newwave, has only been on the network since late January and already has a max DD of 9%. The same applies for eToro's best, currently Caraj51 who has a max weekly DD for the last year of 30% and a daily one of 16%.
So there you have it, your reason. If you like consistency and playing it safe, Ayondo is the network to go with. ZuluTrade's signal providers climb up the ladder all too quickly and more often than not, they fall off it just as quick. As for eToro, along with the high DD, there are a number of other issues you'll be facing, the biggest one perhaps being lack of transparency. While both Ayondo and ZuluTrade give followers access to an SP's entire performance on the network, eToro only gives you the indicators corresponding to up to the past year of trading and the last 100 executed transactions.

What are the available base currencies for opening an account?

Previously, you could open an account with Ayondo using either EUR, USD or GBP. Still, attempting to register live with Ayondo Markets today only allowed for a base currency in Euros. Most likely, that doesn't extend to British or Irish clients, though, who apart from CFDs and Forex, can now also execute spread betting trades with a starting sum as small as 100 pounds. 
With eToro you won't be given much of a choice either as users can only run an account in USD. Unsurprisingly, ZuluTrade's again the most liberal one, providing traders with five different base currency options: USD, GBP, JPY, EUR or AUD.

What about account security?

Each of the three networks has come up with a method of its own for followers to protect themselves against bankruptcy. For eToro, that was the previously universal limit on fund allocation size where copiers could only enturst up to 20% of their equity to a single Guru. Just recently, these restrictions were lifted for accounts under $250 but still stand for the larger ones. ZuluTrade's way of preventing users from exhausting their accounts all too quickly is the so-called ZuluGuard -- a tool that allows them to customize their own settings based on capital, maximum amount placed on a single position and max open deals so that whenever one of the SPs in their portfolio performs badly, ZuluGuard automatically removes them and replaces them with another similar one.
Ayondo also has its unique tactics to counter asset depletion. The first one is that it doesn't let you copy more than five Top Traders as overdiversification can often be an account killer and second, it lets you determine the maximum loss that you're willing to endure through its Loss Protection tool.

Any final words?

Well, yes. We do like Ayondo quite a lot. It boasts a few pretty good Top Traders that have proven themselves worthy and whom we'll make sure to review in the weeks to come. If you decide to give the network a try, though, don't go for the advertized bear minimum of 100 Euros/100 pounds as it will stop you from experiencing Ayondo's full potential. Following five signal providers with that little money is quite the pointless exercise.
TAGS: ayondo  social trading  network  signal provider  followers  spread  forex  trader 

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