Review - Simple Spread Trading (Intra)

**Reviewteam** · 07-28-2009 04:40 PM

SIMPLE SPREAD TRADING SYSTEM (Intra)

WHAT IT SAYS ON THE WEBSITE

Website : Simple Spread Trading Website
Cost : ?25 - ?125 depending on package
Author : Simple Spread trading
Review Date : June/July 2009

"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 PURCHASE

We purchased the Gold package for ?125 via Paypal as we were only interested in the Binary system, the one upon which the website results are based. This system is only available with the Gold package, so we had no choice but to buy it.

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 IN THEORY

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.

THE SYSTEM IN PRACTICE

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.

The system did however nearly make it into our "Systems We Use". We say this because when one of us fancies a bit of excitement and all the rules line up (including a couple of our own that we introduced), we do occasionally place a trade or two using this system as a base. And that’s another reason why the system didn’t make it into "Systems We Use" because to do so would mean at least one of us trades the system with no modification, which we don't. (NOTE: As of December 2009 none of us (at www.systemsfortraders.com have used this system in the last 8 weeks)

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.

CONCLUSION

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 decide to purchase this system, please support us by using our link and by reporting back your findings, both are valuable to us and the service.

ReviewTeam - www.systemsfortraders.com

**Estaban999** · 11-23-2009 10:18 AM

Hi,

I purchased this syetem a few months ago when it was using the hourly binaries. At that time they were providing a daily round up of trades for both FTSE and DOW, then out of the blue they changed to the 20 min binaries and dropped the daily update on the grounds that there were too many trades per day.

They do not provide any customer support as such and after purchasing on ebay they answered my first couple of emails then basically refused to answer any more until I had left them feedback. Now if I email a question I get no reply.

They recently started a live alert service on a one month free trial, but their first two alerts resulted in a loss of 400 points so they dropped it with a lame excuse.

I have looked at the 20 mins a few times and paper traded it for a while, I have never managed to get anywhere near their results. From their results they appear to average 4-5 clear wins a day, I was struggling to get 4-5 a week.

I understand what you mean about having to make a decision on the next trade before the previous one has finished. Can be a bit hit and miss. You ned to be watching the results live to be able to back test at the end of the day, which is a pain, but you can ring IG and they will give you any results you missed.

To visit the screen every 20 mins to clear ?200 a day, would be very nice, if only it were true. I would be really really interested to hear from anyone that is actually maiking this work, or can get anywhere near their results.

Review Team. I would also be interested inhearing what changes you made and why if you don`t mind.

Thanks,

Steve

**Reviewteam** · 11-23-2009 11:50 AM

Hi Steve,

Thanks for the input and the update, it's certainly more up to date than our review and, without doubt is interesting.

As you know from our review, in the limited time we chose to trade this system we too never emulated the results published on the website (see review for "caveats"). It's also disappointing to hear that Customer support has deteriorated as it was reasonable at the time of our review. We also hope that you didn't get burnt by the alert service.

In terms of what changes we applied. No real rocket science (and if the guys at Simple Spread Trading want us to remove this just get in touch and we will happily do so). If a trade looked like it was going to finish outside the Bollinger bands on the 2 minute chart we didn't enter (over-stretched), if any 2 minute candle in the last 18 minutes was over 10 points in length high-low (on the FTSE) we didn't take the next trade (volatility).

Thanks again for the update it's much appreciated, hopefully we will get a few more contributions from those who have had some form of exposure to this system too.

Do remember, your comments are important, if you decide to purchase this system, please support us by using our link and by reporting back your findings, both are valuable to us and the service.

ReviewTeam - www.systemsfortraders.com

**Estaban999** · 11-23-2009 12:42 PM

Thanks for that.

No, I didn`t get burned by their forey into an alert service. The `free` months trial was for people buying their packages, even their ?4.99 offering. I emailed and asked if I could also get the trial having spent ?130 (all be it some months before) and got no reply.

To be fair to SS, they don`t make a great play on their website about support.

The hourly results they used to post were as far as I could make out accurate. So I have no reason to doubt their figures on the 20 min binary results which are consistantly good. Just can`t see how they do it.

They say they trade on average 4 hours a day which I took to mean that out of the binaries available on FTSE they only traded approx 12 (3 per hr x 4 hrs). So to get the results they claim, they must average 8 wins and 4 losers a day.

When paper trading, most days I struggled to finish the day at +1. Might be I am missing something blindingly obvious. I hope I am. But until I come across someone who is making it work, I will have to remain in the dark.

Review Team. You say you chose to trade just in the morning. Did you actually make a profit doing that?

Regards,

Steve

**Reviewteam** · 11-23-2009 12:59 PM

Hi Steve,

You are welcome.

We too have no reason to dis-believe their results but, as you say, we too, also had difficulty replicating them.

As per our review "We neither made money nor lost money, we ended up around break-even over the period", so probably not fairing even as well as you are.

We still believe that the following two paragraphs from the original review are quite apt:

"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."

"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)."

Do let us know how you get on if you continue down this route, it would be appreciated. And, hopefully we will get some other feedback in the meantime.

Remember, your comments are important, if you decide to purchase this system, please support us by using our link and by reporting back your findings, both are valuable to us and the service.

ReviewTeam - www.systemsfortraders.com