Alex GreenAbout Alex Green
We contacted Alex Green in October 2008 to test the LS Trader system. Alex was originally quite sceptical about our claims and reluctant to test the system, but agreed he would test the system, but he would need at least 3 months to get an informed decision. We agreed to this and allowed Alex the time to test the system.
Alex runs Learn Money (www.learnmoney.co.uk) which is an informative website that specialises in stock market investing and trading. He likes to research ways to allow ordinary people out there to invest their money more wisely.
Alex Green's Review
Last autumn we were approached by the people at LSTrader.co.uk to test their long-term trading system. We're always slightly apprehensive when it comes to these types of things but agreed that we would test the real-time signals for a 3-month period.
We were then added to their mailing list and received details of all the trading signals for the following week. At the end of the 3 month period we're impressed with the results and how they conduct and run their business.
Profits for last year were over 1000% but that in itself caused some initial concern because this game is about risk/adjusted returns. How much money was risked to make a certain return?
In my experience profits in excess of several hundred percent usually mean that too much risk is taken and therefore a strategy is likely to be flawed when traded over the longer term. All it will take is a losing streak (all systems and traders suffer them) for an account to be busted out.
I therefore put this point to Philip of LS Trader.
They proved from their past documented results that excess risk hadn't been taken. Instead the bumper profits of 2008 were generated by almost perfect markets, ie lots of powerful and profitable trends.
Phil then went on to add that in normal years the strategy aimed to make around 150% per annum and therefore the results of 2008 were not just outstanding, they are unlikely to be repeated in 2009. The 2006 and 2007 years produced real-time profits of 155.5% and 116.7% respectively.
What is it
The LS Trader System is essentially a trend following system, which seeks to capitalise on big market moves and extract the maximum profit.
Trend following means that at first the trend of each particular market is identified. When the market is trending, that is prices are moving consistently, a trade is initiated in the direction of that trend.
Once an order is placed in a market that trend is ridden to its fullest extent and is only exited when the weight of evidence states the market is no longer trending.
Notice the system is not predicting or theorising as to what may happen in the market. It does not make guesses, or even calculations based on some fundamental theory. It is merely noting when the market starts to trend and then follows it.
Many times an initial trend does not develop into a big market trend, the trend peters out and a small loss is taken on the position. But often, surprisingly more often than you may think, the market takes off and just keeps going. And these are trends which make trend following an extremely profitable system.
How does it work
The system works by identifying the ideal time to enter the market. This is based on certain rules which have been developed and tested over the years. Finally, these rules are being refined based on observations of the markets and experience of trading the markets, this leaves specific rules to follow.
- Once a position is initiated it remains in force until an exit signal is generated, again based on specific rules which state the trend has most likely ended
- No further positions are then taken in that particular market until a new entry signal, which may take several weeks or even months.
When the market has no direction, ie it is not trending and is trading in a sideways fashion the strategy tries to have no position as it is difficult to make any profit in such markets.
Why Does It Work
The system works because markets have a tendency to develop large trends. Markets do not trend all the time but it happens often enough and with big moves in the markets the system makes enough profit to cover the small losing trades and make extra profit.
The primary rule of the system is to cut losses short and let winning trades run. This means that when there are losing trades the system will only lose a relatively small amount of trading capital. But when it wins, it wins sufficient to cover those losing trades and make a good profit on top of that.
More information, including past results, can be found on their website www.LSTrader.co.uk.
The cost is £147 per month and it is estimated that you need a minimum account opening balance of £3,000 but £5,000 would be better. This is because the system follows and trades many different markets including stock indexes, currencies, bonds and commodities.
All the markets are traded via spread bets.
Written by Alex Green, Editor of Learn Money
Here's a fraction of what you'll receive...
- An average of 5 trading signals per week.
- A full list of all open positions, plus entry and exit levels for all 41 markets the system trades
- Access to our position sizing software
- Regular updates and alerts, sent by email and posted in the members area
- Instant access to our exclusive members area
- Extensive manual covering all aspects of successful spread betting
- Unlimited support
- 14 day trial for just £7. Cancel anytime
- Plus much, much more...