INTRODUCTION
Yet another one of those make more than a few quid while you get the kids ready for school trading strategies. Promises of "come the end of the week you could be GBP660 better off for about 15 minutes effort each morning".
"Regular tax free profits are generated by placing a simple 'trade' on the FTSE each morning and another on the DOW".
8am Trader has shown a return of GBP70 to GBP660 each week over an 11 week timeframe from May to August 2010 assuming a placement of GBP10 a point. This translates to a GBP100 risk per trade based on the recommend 10 point stop. There was not a solitary losing week during the above timeframe.
THE STRATEGY
The manual is 74 pages in length. Alan Milton, the man behind the system, compares the method to lake fishing, laying down a couple of nets to catch the fish regardless of which way they (the fish/markets) move.
The DOW and FTSE entries are well defined as well as the Stops, as they are fixed (10 points from Entry).
The Exit strategy on the other hand is not so unambiguous, terminology such as "Judgement call", "to take what you are happy with" and "rely on your gut instinct" are used.
Trading time is crica 08:00 London time.
CONCLUSION
Unusual for us is that we didn't even trade this product, we had our reasons:
- The vendor refers to a PIP for the movement of an Index, a PIP is a term used in Forex trading only.
- The logic of the system doesn't seem sound enough to us, why use a couple of different, supposedly correlated markets, when one could just as easily be used.
- Exit strategy is just far too ambiguous.
- If executed at the recommended time, the spread on the FTSE is generally so large that it doesn't actually make sense to be anywhere near it, especially if trading it with a 10 point Stop.
We ending up lacking confidence in 8am Trader, in particular the Exit process and the sheer reasoning behind it.
We welcome everyone to read and comment on all our reviews and join in our free
Forex Trading System Review Forum.
