Simple Spread Trading Review

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    ReviewTeam
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    Simple Spread Trading Review

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

    Key Info

    Publisher:  None specified
    Cost:  £25 – £125 depending on package
    Review Date:  June/July 2009

    What It Says On The Website

    “Simple but effective, cheap yet reliable”, “we make around £1,000 a week using our system, and you could too” and “over the last 12 weeks 69.6% of the trades we placed using the system were winning trades”.

    There is “no need to be a pro”, the system is a “one-off payment only – no ongoing subscription costs” and “the tools and resources you need to trade are all free”.

    Trading is ideally suited to those able to do so during the day but can be traded right up to 8:20pm (UK Local time).

    “Trading can never be an exact science, but our system makes it as formulaic as possible” and it “uses simple but reliable technical (chart) indicators to identify intra-day trends of the FTSE and Dow”. There are two variants of the system, a Binary betting option and a Classic option, based on, as the name suggests Binary trades and traditional spread betting respectively.

    There are also four other “Simple strategies” supplied that can be used for other markets such as Oil, Gold, Equities and Forex across various time-frames, i.e. not just intra-day.

    The reasons to use this system are “a consistent track record”, trading records are provided at a Weekly level but not on a trade by trade basis. Although, that said, the Weekly figures are impressive, especially considering all trades are based on a stake of £1 a point. “Practically anyone can use it (the system) successfully” with no in depth knowledge required, just “a basic understanding of financial markets” and “you can start with a bank as little as £500”. There is “a package to suit everyone”, “individual budgets and objectives” with “no ongoing charges”. In addition, no special software is required to operate any of the systems.

    As mentioned above, there are various packages available, from Bronze (£25) to Gold (£125), a comparison table describes the features of each.

    The Material

    So, as we mentioned above there are two variants of the Simple Day Trading System, the Binary System and the Classic System. Both strategies can be used on the FTSE and the DOW and “seek to trade on intra-day price trends” making use of one indicator, a Moving average. We only focused on the Binary system as this is the one upon which the websites results are based.

    In addition to this, as we purchased the Gold package, we got access to the Simple Strategies. We looked through these systems and at least two of them are quite common knowledge, but that said, they are well documented and presented, as are all of them to be fair. Again however, our focus was on the headline Binary System so we did not pursue these systems any further. This is not to say they are not worthy of attention, and certainly for those new to trading, will be worth, at least, a look.

    None of the systems come in the form of an actual manual (PDF), one has to read each strategy on-line. There is however a useful summary page for each system, which when printed and annotated is, we found, sufficient.

    The Binary System

    This is the system upon which the statistics on the website are based. As the name suggests, it uses Binary bets, not traditional Spread bets. There is plenty of information available on the internet on the subject of Binary bets and the members area of the site also offers up quite a reasonable and detailed explanation too.

    Trading is based on the 20 minute Binary bets available on IG Index (so there are 22 trading opportunities each day on the FTSE and 17 on the DOW). Entry is based on the 2 minute chart and is relatively clear, we guess about 85% mechanical as one’s interpretation of a trend is applicable. Stops and targets are not a consideration here due to the nature of Binary bets. As a note, when placing a £1 bet, as per the website, the risk per trade will be £52, 52 points and the reward will be 48 points (£48).

    There is some sensible narrative on when not to trade but apart from that the strategy appears really quite straight forward.

    The System

    Set up is easy, a candlestick chart on a 2 minute time-frame with one indicator, a Moving average.

    Entry is reasonably clear (stops and targets are automatic), a Set & Forget 20 minute trade. Risk 52 points for a 48 point reward. Although quite mechanical, Entry does have some discretion, e.g. at time of selection, if trend is not clear, price is on or around the Moving average and how the current open trade is faring, all come into play.

    We applied our usual 2% of available balance per trade.

    Firstly, not really a system that can be back-tested, on our IG Index charts the data only goes back 2 days for the 2 minute timeframe charts. However, we were able to run the system in real-time, for a few hours a day over a number of weeks.

    We chose to trade this strategy on the FTSE from 09:00 – 12:00 as and when we could as this system does require dedicated screen time and 09:00 – 12:00 each day was quite enough for us. With this system it is possible to dip in and out as and when you are around but we suspect that may not be the most rewarding of approaches.

    Now, on to the system itself. Well, when we first started using this system, what can we say, except, we got excited. We were not sure why but eventually came to the conclusion that it is like a slower version of that old horse racing slot machine thing we all used to love in those tacky arcades usually found at sea-side fairgrounds. You pick the colour of your horse and put your coin in the slot (in this case you decide if the entry rules are met and then whether or not to place your trade) and off you go. You then spend the next 20 seconds (in this case, 20 minutes) watching whilst you are behind, in front, a long way in front, back to level, back in front, etc. And, just like the fairground, as each race (trade) is coming to an end you either win or lose and the whole process is repeated again. Now this is no disrespect to the system, it’s just the only way we could agree to describe our excitement when trading it.

    So, yes, we found the system exciting but we also we found it quite frustrating, mainly because the Entry criteria was difficult to get used to.

    There is just too much ambiguity and discretion required at the time of Trade entry. It requires one to take into account, the current trend, price in relation to the Moving average and also how the current open trade is faring. The latter made even more difficult as the result of each race (sorry, trade) is based, not on the IG Index chart values (the ones you are watching) but on the underlying FTSE Cash instrument. Albeit these should be very similar, but they are not the same. We had trades that appeared to be winners on the chart that were actually losers and vice versa. Anyway, the point here is, Entry is ambiguous enough to not make this system as mechanical as we would like it to be.

    Can It Work

    In our limited exposure to this system, we cant decide. We neither made money nor lost money, we ended up around break-even over the period.

    As a system, trading it mechanically for 3 hours a day we found to be quite intense. It just seems too exciting (especially when in front) to be classed as trading and also just feels a little too much like we are flipping a coin each time we place a trade.

    We did not achieve the results published on the website. But to be fair, we didn’t trade the system for long (a few weeks), we didn’t trade it full-time and based on the website results for the period we appeared to have picked one of the most trying periods of recent months in which to perform our review.

    In summary, this can maybe work for those with a lot of dedication who enjoy screen time and want an exciting alternative to conventional trading. We just felt we would have to devote too much time on a daily basis to emulate results on the website, exciting as it is though, when you are in a trade (and winning).

    Support

    Support was usually quite timely, sometimes within a matter of 15 minutes or so, but usually within 24 hours and responses were usually apt.

    Summary

    PRO’s
    • 85% mechanical.
    • Damned exciting.

    CON’s
    • Trade entry is too ambiguous.
    • Lots of screen time (at least much more than we usually dedicate each day to any of our strategies) needed to emulate results on the website.
    • Feels too much like fun and more like gambling than trading.

    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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