Trade The Banks Review – Guy Cohen

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  • #1438
    ReviewTeam
    ReviewTeam
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    Trade The Banks Review – Guy Cohen

    Key Info

    Publisher:  Agora
    Cost:  £583.98 with Agora 30 day guarantee
    Review Date:  June & July 2011

    What It Says On The Website

    Guy Cohen has credentials it seems. He is the man behind the original Flag Trader system (which we have no experience of) and the author of 3 best selling books. He has over 9 years experience in the business and his passion these days is helping part-time traders make more money.

    We do wonder though why a man with such obvious credentials allows his sales page to open with “Do you have the skill to spot where this blue line crosses from negative to positive?” – “You do? Great! That’s all the skill you’ll need to help yourself to £1,000 a week for as long as you want”. Considering the aim is to sell this system to someone who can use a Credit card, this is to say the least, an insult. We digress, but really … Is there an end in sight to this approach to system selling?

    “30 minutes each evening” to use this “automatic way of making money”, “£1,000+ a week cash”. You will not even need skill, luck, experience, education or qualifications, this “can be learnt by anyone in under an hour”.

    Trade The Banks is based on the Options Volatility Indicator (OVI) which provides the “power to expose hidden activities of the biggest transactions, something that only a handful of people in the world can see”.

    There is a 30 day money back guarantee with this product (backed by Agora) and after 12 months the system is charged at the rate of £57/month (£684/year).

    The Material

    A set of 4 DVDs and the Trade Finder software are the main areas of interest, access is provided via an online members area.

    The DVDs are very well put together and Guy does clearly know what he is talking about:

    • DVD 1 – A 90 minute introduction provides a detailed overview of the OVI , Chart patterns, Instruments to be traded, Options trading and Spread betting. Some Fundamental analysis is also covered.
    • DVD 2 – This DVD is about 2 hours long. It goes into great detail about the set-ups key to the Trade The Banks system and how to identify them. In the main it covers Flag patterns, Break-outs and Reversals.
    • DVD 3 – A DVD dedicated to Risk management, Brokerage and Spread-betting as well as a Putting It All Together section. A worthwhile DVD especially for those interested in knowing more about the subject of Options trading and how it can be related and adapted to Traditional Stock trading and Spread-betting.
    • DVD 4 – The final DVD provides over 2 hours of Trading examples, more than 25 of them in total.

    Eight hours of video content. Useful, yes, but does go some way to negating the statement that this system “can be learnt by anyone in under an hour”.

    The System

    The real heart of the Trade The Banks system is the Trade Finder software which is accessed via an online members area. This software (filtering tool) is used in conjunction with the knowledge gained from the DVD’s. It can be used in the evening, after the US market close, or in the morning before the US market opens. We found it easier to trade in the morning as we were then assured the data was available and up to date.

    The Trade Finder has many filtering options including:

    • Pre-set filters
    • Pattern filters
    • Stock & Option filters – The filters we chose meant we typically ended up with 20 – 30 opportunities a day in June and 15 – 20 in July (see below for explanation).

    After choosing your specific filters the “Search” button is used and those instruments meeting the filtering options are identified. Symbols then indicate why those instruments have been chosen, e.g. Bull flag, Bear flag, Doji. A symbol also indicates if it is tradable on IG Index, of interest to us because we would only be trading instruments we could Spread-bet.

    For each instrument there is a quick link to Yahoo news, Yahoo charts and the all important OVI chart. This is where additional analysis is then applied, based on the knowledge gained from the DVDs, to select trades for that day.

    This analysis is where the time and effort comes in. Each opportunity has to be examined to confirm it is a valid set-up. This is because the Trade Finder does not, in our opinion, always identify valid set-ups. Yes, it’s reasonably accurate but every opportunity does require discretionary analysis to confirm the validity of each set-up. It is also true that the Trade Finder does not identify all valid set-ups. We noticed this after observing various instruments we thought were setting up (according to our interpretation of a valid set-up) only for the Trade Finder to then not identify it when it was a valid set-up (again, according to our interpretation of a valid set-up). Rather disappointing!

    After using discretion to identify set-ups, Entries, Stops and Targets then have to be calculated. Again, based on attitude to risk, etc. this is a discretionary process.

    Last but not least is Open trade management. This is another discretionary process where one spends time deciding whether to move Stops, take profits, etc. based on their interpretation of the rules and their attitude to risk, etc.

    Can It Work

    We ran this system during June and July 2011, apologies for the delay in publishing the review, this has been largely due to the holiday season being in full swing.

    A few notes on our results, we used:

    • The recommended 3% risk per trade
    • The conservative approach for Stops and Targets
    • The recommend take 50% profits at a predefined point and leave the rest of the trade to run and Exit based on Trend lines, Support & Resistance, Price action observations, etc. approach
    • IG September contracts (to avoid overnight charges as positions can be open for weeks)
    • The Trade Finder output that day and traded Break-out, Cup & Handle, Bull/Bear flag and 20 Day Doji (no OVI confirmation required) trades
    • Included Banking & Financial stocks, 20 Market leaders and Large Cap Liquid Stocks (we dropped the latter in July as we found too many opportunities were being presented and we usually had enough open trades, so we decided the Banking & Financial stocks and the 20 Market leaders provided plenty of opportunities)

    We took 19 trades in total, we had 14 winning trades, 4 losing trades and 1 break-even trade. Risking 3% per trade we seen a 17.03% return over the 2 month period. Trades were often open for a couple of weeks or so.

    Using the minimum stakes on IG to trade this system meant at times we had to take an exposure of £300. Based on 3% risk per trade this means a starting bank of £10,000 is required. Other brokers just don’t provide the coverage IG does so we had no other viable alternative.

    Our main comment in relation to this system though is the emphasis on discretion – Trade identification, Entry, Stop & Target setting as well as Trade management. The Trade Finder software could also be made to be more reliable and screen time, we found, was more like an hour and a half rather than half an hour a day.

    One final observation is that we believe the 30 day money back guarantee should be extended to 60 days. 30 days just doesn’t seem long enough to effectively learn and trial this system, one which incidentally, previous trading experience is almost a must.

    Support

    Support was very efficient and their responses prompt and useful.

    Summary

    PRO’s
    •  DVDs are well presented and provide plenty of detail.
    •  Profitable, albeit over a short period of time (2 months), we just do not have the availability to provide further coverage.
    •  Good support.

    CON’s
    •  Way too discretionary and not really suitable for complete beginners.
    •  Trade Finder software reliability could be improved.
    •  Starting bank of at least £10,000 required.
    •  Expensive, especially considering the ongoing commitment of £57/month after the first 12 months.

    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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    #1492
    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

    zorba_g

    01-Sep-2011

    Those results are very good indeed, although I concede that it’s only two months. On your mandatory bank of £10k, that’s a comfortable £1703 gain so far, which would pay for the initial 12 month cost and the next 20 months. Ok, my perspective is skewed as there must be losing months in the future, but you get my drift. Personally I would be looking at building a ‘replacement pot’ with the profits so that I could be using ‘house money’ after a while and take my £10k back. I’ve seen this approach a few times and whilst I can’t mathematically justify it, I think it helps psychologically.

    Some questions:

    • It’s a really good return so far, is that typical though or a blip?
    • Is there any proper history available for this one?
    • What kind of R:R was used on the trades (accepted that this seems to be a discretionary element)?
    • Bit cheeky but please can we have an example trade from top-to-toe? I’m tempted by this system but the amount of discretion needed is a big question mark. I could buy a Formula 1 car (one day Rodders) but it doesn’t mean I’m Jensen Button.

    Thanks!

    Z

    ReviewTeam

    01-Sep-2011

    Hi,

    Yep, results are reasonable albeit, as we noted, over a short period of time (2 months). Two other questions answered here, as per the review, we cannot comment on historic results as we said, this is very much a discretionary system and as per the review we do not have the availability to provide further coverage.

    A “replacement pot” would indeed be the ideal but as you elude to, can everyone expect this same 2 month performance we experienced, was it down to our judgement and discretion, just too many unknowns for us to fairly comment.

    Risk:Reward is not fixed and varies from trade to trade (and will vary from trader to trader) but looking back at our results it seems we ended up with around 1:2.

    Trade Top-To-Toe, just not feasible really as it’s first dependent on the Trade Finder software. But, for example, the Trade Finder identifies a Bull flag say, then you analyse it to confirm it’s a valid Bull flag and then that it meets your criteria for an entry according to your interpretation of the rules. After that, based on your attitude to risk, etc. you then determine your Entry, Stop and Exit strategy. Place your trades and then manage them based on your approach.

    Hope this helps a little.

    macintel

    15-Sep-2011

    Hi Review Team,

    Thanks for your very welcome review. I looked at this over a year ago, but there was no indication until it arrived that this was only usable on the US markets.

    I found I could not use it for a variety of reasons, the most important being that the instructions were not to place trades before the markets opened in the US, which is bed-time here. I queried this point with Support who stated that they were hoping an extra order type (stop-limit) could be added in the future to guard against being gapped into a trade.

    I returned the DVDs for refund after watching the first three, with the notion that if this was workable, perhaps I should consider relocating to a more convenient time zone.

    In February, I contacted Support again and was told that Guy’s Private Traders Club now use PTC Markets (part of Gekko Markets), who supposedly would provide stop-limit orders some time this year. However, by mid-May there was still no progress and I had to make some decisions regarding other trading systems and computer upgrades, so did not pursue this further. I have an account with Gekko anyway (mainly unused), so assume that as there has been no announcement since regarding stop-limit orders there has been no further progress.

    I would be grateful if you are able to comment further on your losses, because I thought this was supposed to be fairly risk-free, and whether you looked at PTC Markets.

    Also, could you please clarify if you used the OVI at all. My impression is that without it, we are looking at the original Flag Trader system, which I assume would work with non-US markets as well.

    Anyway, I’m glad to see that the system has been shown to work for you. Overall, your experiences do seem to bear out my impressions that it involves just a tad more effort than the website implies!

    ReviewTeam

    15-Sep-2011

    Hi,

    OVI was used for all trade set ups except the Doji trades. So, for Doji trades yes this could be applied to other markets, for all other set ups, where we relied also on the OVI, obviously this would not be the case.

    We placed trades before US Open, 14:30 UK time.

    Fairly risk free! We would use that term lightly in respect to any form of trading. Our losses were a maximum 3% as that’s what we decided to risk on each trade. Some were exited early due to Price action and some hit Stop for the full 3% loss.

    PTC markets, never heard of them so cannot comment, sorry.

    Hope that helps.


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    #2452
    ReviewTeam
    ReviewTeam
    Keymaster

    We have finally managed to get round to look at Turnaround Trader by Guy Cohen, here is a link to our (non) review.


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