Profit Distributing Accounts on Zulutrade
Profit Distributing Accounts
Zulutrade continues to innovate and is presenting it’s new program of compensation for Traders. Being Valuable to both traders and followers, this articles will tell you how your investment will be impacted.
Similar to the current volume-based compensation model, Zulutrade adds a new model with the objective of aligning the interests of the Followers with the compensation that the Traders receive.
The advantages of Profit Distributing Accounts
The profit distributing accounts are important to Followers because:
- Reduce the cost of trading. The followers that adopt the profit distributing model will be given a discount from their broker when opening and closing trades.
- A win/win situation. Followers and Traders share the interests of profits. The more profit the trader generates for the followers, the higher the compensation will be.
- Compensation for traders that win, conversely, penalization for the losers. The followers that share part of their earnings with Traders that they follow, while the losers will be penalized.
- Better Communication. The new model enhances collaboration between Follower and Trader towards a common objective.
On the other hand, profit distributing accounts are important to Traders because:
- The profits are shared. The traders that generate earnings for their followers will be compensated monthly by each follower.
- Unique percentage. Trader will receive 20% of benefits that they are achieving.
- Efficiency. The Traders should generate lucrative long term investments for their followers.
- You have the control. There is no possibility of making adjustments manually. The followers will copy the signals proportionally (Pro-Rata).
How do Profit Distributing accounts work?
A follower that has a Profit Distributing Account is copying a trader.
The follower will never pay if trader does not make profit. Usually, you the follower shares 20% of the earning with the Trader.
Meanwhile, the Trader is compensated based on a reserved payment of 50%.Half of the total commissions are given to the Trader, while the other half is reserved to guarantee a profitable return in the future.
Lets see an example:
Let’s assume the following case.
|Month||Win/loss||Total monthly PnL
|Payment of follower|
|August||Won||$50||$0 Recovery Period Losses|
In June the Trader generated $100 dollars of winnings, and by consequence $20 are subtracted from the winnings. In July the Trader generated a los of $50; since the balance is negative no commision is charged. In August the Trader generated $50 dollars of winnings, but since last time he had lost of the same amount no commission is charged to the follower. This is called the recuperation period of losses. Lastly, in September the Trader generated $200 of winnings, thus 20% is charged to the follower, which is $40.
This follower’s investment through a graph:
Now that you know the latest information about Zulutrade, you are now prepared to get the most benefit from it, whether you are a Follower or Trader
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