Subscribing to a futures service

[Panaman]

Been following a few topics here as futures are something that have interested me.

Does anyone use services where you subscribe to trading signals and do they return what they claim, there are plenty of services for shares but futures is something that is not so much in the spotlight, thinking of subscribing to a newsletter for a while and if it works as claimed then ongoing as the appeal of working in rising as well as falling markets is what I like, shares services are all a buy and then sell service, so when things are going down there wont be much happening.

Would preferably want an Australian service and found this one http://www.indextrader.com.au/ anyone know anything about this service, been very bad this year so far but looking at its history it’s claimed to be good.

 

[minwa]

Well at least this site posts their performance, although a lot of it is back tests..

Not sure which model you are after but let's look at Spi one



Obvious red flags:
1. why does all the backtest curve before release look great and then it massively drops off after release ?
2. Ends at 2009, if the system has live subscribers and continued to be profitable you would think the vendor would update it ? What happened during the past 5 years ?
3. From 2001 to 2009, where the real performance lies after it has been released, it's only returned about 25% for 8 years. That's about 3.1% per annum after compound. Are you happy paying for those returns ?
4. He deliberately chops off the data at 2009 bottom for SPI so it makes his equity curve look more attractive. If you just invested in the SPI index and had a very simple 10% trailing stop loss from 2001 you would've made from about $75k to a high of about $160k, and then losing 10% from the top with the stop loss and stopping you out at $145k. $70k profit on $75k initial is over 90% return, compared to the system's 25% return.

Now on to the latest results:

He does not state what capital was used, just pure $ amount. Typical vendor maths. According to his previous performance, the account was around $200k in 2009. Let's say he continued his performance of 3.1% pa and ran his account to $230k. A loss of $55k is almost a 25% drawdown. And that was in 2013. Current 2014 is down even more. All that in a bull market.

 

[minwa]

That being said, this vendor is somewhat more honest than most other vendors who sell signals out there. Quite refreshing to see the transparency (although still not enough, better than most) there.

But when it comes to investing your money, real results are what matters, you don't invest to make friends when you're buying a product.

 

[Pager]

I have traded for a few years, subscribed to Index Alert for a while on the Spi & Asian markets and it did ok but after fees and slippage not that great, but in all honesty im not sure what people expect, think many have too high expectations of double and treble digit gains every year, so you need to be realistic if you get around say 15% to 20% consistently that’s a great result, the years of 50% or 100% is going to be the exception rather than the rule with mechanical system trading which is what your talking/thinking about trading.

With index trader the results shown are based on taking all signals on all markets so depending on your account size that may not happen, it does use some very big stops as well and they do get hit, so every so often you take a big loss to the account, to trade it and take all signals you will need about $75K imo, also on the plus side Brent uses a system stop so I would guess the horror start to the year would not be reflected in his subscribers accounts had they adopted this rule, in the end I decided to go solo and have been so since, Brent Penfold who runs it is a decent person in my opinion, did his Forex seminar a few years ago and it didn’t really work that well and many participants were not happy so he either gave those who attended Index Trader which is his flagship system or they could attend his next forex seminar at no cost.

I took the index trader and it does have a good back tested record and very simple and easy to understand/trade, you will get smacked every now and then though but that will happen with ANY system you trade, saying that though, I don’t actually trade it!, my stuff is very similar so when it gives a signal just about every time I have a signal anyway, I also use different stop and exit rules to Brent.

Couple of points about BP though that minwa has posted, you say he does not state starting capital, that’s correct, all results are based on trading 1 contract per market.


He’s done badly during a bull market, with this type of trading that’s irrelevant, this is short term trading and hold time is 1 day.


You make a good point though about the Spi trading model, why have the results for this not been updated for 5 years?

For what its worth and in my opinion, futures are the best instruments to trade, low cost, leveraged, liquid and just as easy to go long and short and exchange traded which things like forex are not and for me this is an aspect that many don’t consider but I feel is important.

Apart from Brent Penfolds stuff, try a guy called Andrew Gibbs in NZ, not sure what his company is called but he was offering systems trading I believe as well as a brokerage service, again decent person, had some dealings with him a few years ago and he will be very helpful I’m sure.

Don’t rush though, try reading a few books, Long term secrets to short term trading by Larry Williams is very good, Larry gives a very good insight into the sort of things and types of patterns that do work and most are pretty simple, both Brent and Andrew trade using similar ideas to LW, the systems in the book are more for example as well trade most in there raw form and you may get a nasty surprise, some though with a little work can become quite good, basically think of it like fishing, Larry takes you to the river and tells you how to fish but doesn’t really tell you what bait to use or what the best fishing spots are, that’s the bit you need to work out!, he also has a chapter in the book about money management and says this is the most important chapter, I would agree with that, its also the shortest, very short, simple rule really for me and that’s risk only a small percentage (for me that’s 1% or at the most 2%) of your account on any one trade, another important aspect is don’t go in undercapitalised, you will need a minimum $20K to trade ONE MARKET, ONE CONTRACT in my view.



Futures is all I trade now, was trading stocks and following the Chartist Growth Portfolio but found if I don’t know a system I had problems following it when the going got tough, everyone is different and others can follow things easily so I would say to anyone, what sort of person are you?, could you trade a system or subscribe to a newsletter when you don’t know the logic behind it, could you go extended periods losing money as this WILL happen, be honest with yourself, I was and I cant trade anyone else’s ideas, wish I could but have accepted I cant.

Also don’t get bogged down reading forums like this, good in some ways and for getting the initial information but you will get so many different views it can become confusing, I used to post a lot and read varies forums, this is about the only forum I visit now and not that often, maybe the site owners don’t want to hear this but since I stopped visiting varies sites, trading is a lot easier, I just have my ideas and nothing to potentially cloud my view. I don’t even look to see what different markets are doing during the day or overnight, wake up in the morning, download my data, get a buy signal on say every Asian market I trade, I don’t look to see what happened in the US or Europe they could have all tanked, just place my orders and then read about Football or something rather than the reports from the financial press about what happened overnight and what to expect for out trading day.

Good luck if you decide to give it a go and maybe check out the Chartist website if you have not already, some good discussion there from a few years ago about futures trading.