Daily Index Trader Review – Martin Carter

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  • #775
    ReviewTeam
    ReviewTeam
    Keymaster

    Daily Index Trader Review – Martin Carter

    To The Best Of Our Knowledge This Service Is No Longer Available

    Key Info

    Publisher:  Thames Publishing
    Cost:  £287 with a 45 day money back guarantee
    Review Date:  October/November 2010

    What It Says On The Website

    The words “Geek” and “Nerd” seem common place on System vendor websites these days, this time the headline is “Stock market geek shows how you can take £2,461.74 … £3,521.82 … or £4,557.82 a month from ‘unfashionable’ index trading”.

    Martin Carter used to work in JP Morgan’s Risk department, retired at the age of 49 and has been trading the financial markets for more than 30 years. He gets to his desk soon after 9am, spends 10 minutes pressing a few keys to “earn myself £101.05 … or £139.04 … or £113.39 … or even £369.70”. This “has brought in a 971% return on investment since 29 September 2009”. This equates to “an average profit of £1,752.15 each month” or a closing balance of £53,532.13 based on a starting account balance of £5,000.

    The Daily Index Trader “payout loophole” is based on pairs trading and it does not involve:

    – Sitting in front of a computer waiting for complex chart patterns to evolve
    – Monitoring open trades
    – The need for a big trading account
    – The need to have previous trading experience

    The system is based on the theory “Get paid when you win, get paid when you lose” by “adding an insurance policy” that makes “it almost impossible to lose”. It came about by mistake when one morning Martin wasn’t thinking straight, got his numbers mixed up and placed his trades incorrectly.

    Martin doubled his money on this mistake, so ran a few tests and discovered “this payout is so consistent and reliable that it’s happened 76% of the time since I started live trading back on 29 September 2009”.

    There is a “live forward testing” statement and a host of testimonials included.

    As mentioned above the system comes with a 45 day Money Back Guarantee, “if you don’t see a minimum of £500 profit in your account within the first 45 days of testing out Daily Index Trader, you can walk away and not owe me a penny”.

    The Material

    A 69 page manual and a Trade “Evaluator”.

    The manual opens up with Martin providing some background and also providing his own personal email address.

    He says you can ignore Chapters 1 and 2, they contain mainly background information. For a change we would say they are at least worth a quick scan through as they provide some useful information on indices and hedging. The CAC (French) and DAX (German) indices are the focus of this strategy in combination with Pairs (“hedge”) trading.

    Chapter 3 describes the strategy in some detail. The basics are that each day a long position will be taken on the CAC and a short position will be taken on the DAX or vice versa. The theory is that one trade will win and one will lose, the loser being around half the size of the winning trade. The major assumption is that if one trade is taken out (e.g. the CAC Long trade) then the other will go on to make double this (e.g. the DAX Short trade).

    Trade sizing is vital to support the theory of this system and for this purposes the “Evaluator” (Excel spreadsheet) comes into its own. The process involves entering the CAC and DAX closing prices each morning, placing your trades as per the calculations then entering your results when the trades close out. The Evaluator is saved and the next day the process is repeated.

    Trades are placed at 0915 UK time each day and chapters 5 and 6 are devoted to account set up and a detailed walk through of how to place your trades on the Gekko trading platform. It is not a requirement to use Gekko, it is simply the authors preferred platform.

    Chapter 7 is devoted to risk. Three “Staking plans” are proposed, Flat, Simple compounding (both self explanatory) and “Enhanced profits”. The latter determines risk based on “trends”. For example, if Tuesdays win consistently and Wednesdays are bad days it will advise risking more on Tuesday than Wednesday.

    There are then some discretionary elements to consider, such as news and Stop management, as well as FAQ’s. Appendix A explains the mechanics of the Evaluator so the strategy can be traded without Microsoft Excel and Appendix B rounds off with an overview of Spread betting and trading on margin.

    The System

    The system is well explained as is the theory behind it. No charts are actually required to trade it as it’s all based on Closing prices and the information the Evaluator throws out each morning. The Closing price data is simply obtained from the Yahoo Finance website.

    The process of determining which trades to place is not straight forward the first time round, especially as you will have to ensure that the historic (Closing price) data is up to date. However, after a few goes it does become much easier and the system is then relatively easy to trade. Even absolute beginners should get a decent grasp of things within a week.

    So – Each day around 0910 UK time the two Closing prices are entered into the Evaluator, the trade decision is kicked out and at 0915 trades are opened at the current market prices. These details are then entered into the Evaluator which kicks out the actual Stops and Targets to be applied to both the open trades. When both trades close out the actual results are added to the Evaluator, it’s saved and then ready for use the next day.

    Note: During our review an update was issued that “due to volume of business” results are being affected. It was advised to avoid 0915 to “take the ‘heat’ out of our trade as it goes into the markets”. We had experienced no slippage to date from our broker, this, in our opinion, would be the first sign that trade volume was affecting the market. Thus all our results are still based on the 0915 entry time.

    Can It Work

    As mentioned above, all our results are based on trading at 0915 and also using the Gekko platform as per the guidelines in the manual. We referenced only the spreadsheet (the Evaluator) and traded as advised (by it) – A 100% mechanical approach. Trades were placed every day, no discretionary aspects were applied, e.g. reference to news, etc. Of the 3 “Staking plans” we chose the Flat risk option of 2% with the view that this would make the review more measurable.

    In October our performance was as follows:

    – 10 days where 1 trade was Stopped out and the opposing trade hit it’s Target (in accordance with the theory of the system)
    – 11 days where both trades were Stopped out
    – 0 days where both trades hit their Targets

    In November our performance was as follows:

    – 16 days where 1 trade was Stopped out and the opposing trade hit it’s Target (in accordance with the theory of the system)
    – 5 days where both trades were Stopped out
    – 0 days where both trades hit their Targets

    Performance wise, after 2 months, this resulted in a net loss of around -6% with a strike rate of just over 60%. The most troubling aspect of this, is that for a losing trade, 3 winning trades in a row are required to get back into positive territory, thus that strike rate really needs to be high.

    Our results are pretty much the same as those reported by Martin, in his updates. Occasional differences will occur based on the exact timing of entries, we have to take is that this will work for/against, against/for as and when it happens.

    This is a system which may interest those after a morning Set & Forget system, but only if the performance is more in-line with historic levels. With a new version of the “Evaluator” just released, we will keep our eye on this system for at least another month and report back at the end of the year.

    Support

    We had no reason to contact support so we cannot comment.

    Summary

    PRO’s
    • Simple to set up and operate, after a few attempts.
    • About 5 minutes effort once a day around 0915.
    • 100% mechanical, Set & Forget.

    CON’s
    • Low Risk:Reward, 3 winning trades in a row are required to recover from a losing trade.
    • Performance was disappointing based on 2 months live running.

    Do remember, your comments are important – If you have used or decide to use this system, please contribute to the community by reporting back your findings.


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    #791
    ReviewTeam
    ReviewTeam
    Keymaster

    Systems For Traders had to be rebuilt in 2013

    This is a selection of key posts and comments from the original forum prior to the rebuild

    james.mc

    17-Dec-2010

    I stopped trading this system at break even. Others were not so lucky.

    sarniacherie

    17-Dec-2010

    For anyone considering purchasing this system my advice is do not do it. I have lost money and it does not work in the current market conditions.

    gonefishin

    19-Dec-2010

    I bought this system and returned it for a refund within the 30-day trial period. Very unimpressed.

    paul smith

    20-Dec-2010

    I have been using this system since September and just broke even. Its a waste of time and money.

    ReviewTeam

    30-Dec-2010

    In (the first 3 weeks only of) December our performance was as follows:

    – 6 days where 1 trade was Stopped out and the opposing trade hit it’s Target (in accordance with the theory of the system)
    – 9 days where both trades were Stopped out
    – 0 days where both trades hit their Targets

    Performance wise, this is a net loss of around -11% with a strike rate of less than 40%.

    This loss is on top of our -6% loss made during October and November, total -17% using fixed 2% stakes. We will now cease to provide future updates on this system.


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    #3080
    ReviewTeam
    ReviewTeam
    Keymaster

    Here is a link to our review of Martins latest product, Diff Code Europe


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