SpiTrader - Frequently Asked Questions
A short-term 100% mechanical SPI trading model.
 

Frequently Asked Questions

Important Note: Please be aware that allot of the information  on my web site for both SpiTrader and IndexTrader (including this page) are similar. This is because both models are basically the same model.

Can you explain the difference between IndexTrader and SpiTrader?
IndexTrader is SpiTrader renamed with four patterns removed, a slight twist to the trade plan and it trades global indices. Also you'll notice allot of the information  on my web for both SpiTrader and IndexTrader (including this page) is similar/identical ...and its because they are basically the same model. Please have a look at the background to both models.

Background to IndexTrader

Background to SpiTrader

Do you trade SpiTrader yourself?
Yes I do.

How do your own results compare to what the system says should be achieved?
From October 2007 they're about spot on. Why not go to my home page and request a copy of my real time results?

How long have you been trading it privately?
Since April 2001 when SpiTrader was originally released. But from November 2002 I started trading SpiTrader in its "new" IndexTrader form across global index markets. You'll see my IndexTrader results when you request a copy of my real time results. Since October 2007 I have recommenced trading my original SpiTrader model.

What sort of slippage do you experience on the local SPI contract?
I rarely get much slippage on the SPI and this is mainly due to SpiTrader's entry and exit techniques…...however I have at times experienced slippage when being stopped out and it is usually around 1 to 2  point...however overnight can be up to 5 say sometimes 10 points.

Can you explain why you bother to sell SpiTrader?
Good question. There were two reasons behind why I decided to release SpiTrader/IndexTrader to the public.

Firstly, my initial motivation was to make available a robust methodology to private traders. 

As experienced traders know private traders have been, and still are being taken advantage of by slick promoters peddling trading courses/systems/software that has little value. 

The catalyst for me to release a system was a very public run-in I had with a well known Australian trading educator and purported professional trader in 2000. This person had previously been the General Manager of Australia's largest trader education company and in his bio he'd would always boast about having personally trained over 10,000 traders! Anyway this clash occurred on the WaveTraders forum and was very public. This person was, in my opinion, talking up a well publicised methodology which had no practical value except to sell books and trading courses. I took exception to this in that his spin had probably sent all the "newbie's" on the forum off on a wild goose chase when I felt this person also knew it had little value and in all probability did not use it himself in his own trading (if in actual fact he traded at all?). The only benefit I could see that he gained from the spin was to promote himself as being knowledgeable to the less knowledgeable members. 

I was so fired up that I declared on WaveTraders that I would go off and get myself licensed by ASIC, make available to the public a trading methodology (which was SpiTrader before its name change to IndexTrader), trade it myself and make available my real time results. By doing so I hoped, and still do, that it will encourage all other genuine promoters of trading courses/systems/software to become licensed by ASIC and actually follow/trade/use/implement what they push...i.e. walk their talk.

The second reason why I sell SpiTrader/IndexTrader is the same reason as to why I trade…..and that is to make money. By selling SpiTrader/IndexTrader I hope to build my capital faster so I can shorten the time it will take me to really begin to enjoy the power of money management.

In addition SpiTrader/IndexTrader doesn't represent every system I trade so I'm not giving away everything I do. SpiTrader/IndexTrader only represents a handful of the patterns I trade.

You mentioned that the methodology contains patterns. If an account permits 1 or 2 trades, do all patterns generate signals, or does one pick a pattern and use it exclusively ?
SpiTrader consists of a collection of patterns that produce on average 4 signals per month. SpiTrader is not interested in quantity but rather quality of trade potential. Each signal is taken unless two patterns generate a signal for the same day session in which case only the highest ranked pattern’s signal will be traded. SpiTrader only allows you to trade one signal a day.

On the money management issue, I have another question. Does your methodology include a unique management scheme/approach? I mean, is that one of the reasons to buy SpiTrader? Or does one buy it primarily for the patterns? I'm in a bit of knowledge vacuum as to what it takes to get the curve going up exponentially steeper.
SpiTrader doesn't disclose a "unique" approach to money management. It just discloses a good one.

I believe the reason to buy SpiTrader is that it provides a complete approach to  trading. SpiTrader provides high probability set-ups (patterns) combined with a robust trade plan (entry/stop/take profits), money management and an original approach to trading psychology. Another reason why I believe people purchase SpiTrader is that the developer (me) also trades his own system  ..... which is very unusual  in this business!

The maths behind Money Management is really simple....it just means you trade more contracts as your balance increases and you decrease the number of contracts to trade as your balance falls from loses. It is essentially about momentum. The trick with money management is to stay in the game long enough so you can get your account up enough to take advantage of multiple contracts.

I can recommend my Trading The SPI book that has  as an excellent section on money management. It would definitely be worth your expense to purchase it. I hope this helps.

Also what concepts are inherent in your patterns?
SpiTrader's patterns capture recurring "crowd behaviour". Although markets change over time peoples’ reaction to fear, hope and greed has not, and this is what SpiTrader's patterns try to capture.

To give me a little more feel for your system, could you overview say your stop  strategy. Is it based on equity%, volatility or combinations of things?
Unfortunately I can't tell you too much about SpiTrader because of its simplicity, if I did tell you a little then you'd know the whole methodology!

What I can say is that SpiTrader does not use a fix type stop. Markets are continually changing as their volatility jumps around the place. SpiTrader uses a dynamic stop that is a function of the market and not your equity account balance.

Do you offer money back if I don’t like your system?
Unfortunately I don't offer a money back guarantee. This is because once people have seen the model’s simple methodology it'll be permanently imprinted in their heads. Although they may be able to return the manual, they'll never be able to erase SpiTrader’s™ simple rules from their heads.....so it's almost impossible for people to truly "give back" their purchase for a refund. I wish this could be otherwise but unfortunately its not the case.

I read through your web page and was fairly impressed with your trading model, but the price is quite expensive.  I would like to ask you a few questions if you don't mind regarding your system.
No problems.

Is the system provided in TS2000i code and is this code open?
Purchasers of the system receive SpiTrader's manual which fully discloses the model's simple methodology. Although I own TS4 I do all my own programming in VBA (Visual Basic for Applications) and so I don't have any TS code. Although code is not provided I'm confident in saying that SpiTrader's patterns would be easily programmable in Easy Language. If you have any trouble I'm sure I'd be able to assist you.

The performance statistics seem to suggest its only in a position for 2 day? 
This is correct, being a short term system SpiTrader, if its not stopped out immediately, is usually out of the market with its money within a couple of days. The benefit of this is that traders don't have to be "in the market" all the time reducing their exposure to markets which are basically random and thus unpredictable in nature.

Can you provide a list of the trades that you have taken on the SPI?
Unfortunately I don't and the reason for this is that it wouldn't take much effort for someone to reverse engineer SpiTrader's simple methodology from its trading signals. I hope you can understand my reluctance. However I can say that purchasers of SpiTrader do receive an excel file containing all trade signals. If you wish I'd be happy to give you names of owners of SpiTrader who you could contact about the model.

Your largest winning SPI trade is 298 points. How is this possible if only holding for 2 days and there has not been a move of that magnitude?
Although it may appear weird I can say the trade signal did appear and there was such a trade.  

You mention it is pattern based.  Is it also a breakout type system?
SpiTrader's methodology is broken down into set-ups and a trade plan. The set-ups are purely pattern based (with no parameters) and identify possible buy or sell opportunities. The trade plan provides clear and precise entry and exit rules. The set-ups are purely pattern based.

Does the system actually have no optimiseable parameters?
The set-ups are purely pattern based with no parameters. SpiTrader doesn't use indicators of any sort so there aren't any parameters to "tweak".

Have you had a lot of experience at designing and implementing trading models?
I first traded the SPI in 1986 and only started to make money (and lose less money) since I became totally mechanical in 1998. I wouldn't call myself an expert system designer (and would be suspicious of anyone who did…since in this game you’re continually learning) however I've collected enough knocks and battle scars over my 20 years in trading to know what certainly does NOT work, and what does have a small edge.

As your method is very short term, do you believe its performance will be adversely affected (SPI only here) by others following your rules?
I'm not sure. In theory if every trader wanted to enter where SpiTrader did then we wouldn't have a market (since everyone would want to buy/sell at the same level) and therefore the model would not work. So far, since I have restricted SpiTrader to private traders, it hasn't been a problem.

Is your method based on just day only session of the SPI?
Yes, all the patterns' set-ups are based on day only session prices represented by the Open, High, Low and Close.

I hope you don't feel flooded by so many questions :-) I don't mean to grill you, but as your selling price is so high I feel I must do due diligence to justify the price. I would much appreciate if you could take a few moments and responded to my enquiries as best you can.  I may have other questions following your reply but I think I have covered most things here for now?
No problems. I hope this answers your questions and please do not hesitate to contact me again if you have any further questions.  

I am interested in your system but am worried for several reasons. How many have you sold and how many more do you intend to sell? Personal questions, I know but relevant since you are asking a 'not small' investment for this pattern.
Good question. I've been asked this question a number of times and is one I'd prefer not to answer because as you say, its a personal question.

However your question does address an important concern for people considering SpiTrader.

Will the model maintain its edge as it becomes popular among private SPI traders?

As you know I can’t give you any guarantees that SpiTrader will continue to perform in the future as well as it has in the past, however I can share with you my thoughts.

Straight off its my intention to remove either SpiTrader, IndexTrader or IndexALERT from public sale or subscription once;

1.    I believe too many people are entering at my levels and causing me too much slippage or,

2.    The patterns appear to be losing their edge due to too many people being on my side of the trade.

As I trade SpiTrader its not in my interest to let too many people trade at my levels and this is why I restrict SpiTrader to only private traders.

I actually had a CTA order a copy of SpiTrader (its name change to IndexTrader) and I refused as I didn't want to risk the possibility of being trampled by an "elephant", even though I believe it would have only been a remote possibility due to SpiTrader’s simple, yet robust, methodology.

How many sales of SpiTrader will this take before too many people will cause me too much slippage and reduce SpiTrader’s edge?

I don’t know.

However I believe it may not become a problem for a number of reasons; 

1. Liquidity of entry and exit levels. There are certain points in market structure that are more liquid than others, where for less liquid points slippage can be a problem. SpiTrader's simple methodology has identified entry and exit levels which are very liquid spots in the market thereby minimising potential slippage.
2. Personalised trade plans. Traders have a tendency to slightly modify systems to make them their own. Some traders may adjust SpiTrader’s entry and exit levels to be in either earlier or later, thereby removing activity around the trigger points. Alternatively some people may have their own Trade Plan and only purchase SpiTrader for its patterns.

Anyway these are just my thoughts and as I’ve said as soon as I feel I'm being disadvantaged on my fills or the patterns appear to be losing their edge I'll remove SpiTrader from public sale.

Honestly there are a few simple pattern systems around that are well known. I hope this is not a pivot system OR a Donchian/Turtle style buy the 21 bar high/low system.
I can assure you that SpiTrader is not a Support and Resistant Pivot system or a Channel Breakout System like the Turtle 4 week (20 day) breakout model.

SpiTrader’s patterns are surprisingly simple and only contain daily bars with the Open, High, Low and Close. SpiTrader's patterns will jump off the charts once you start looking for them.