Daily Index Trader Review update: the truth about this strategy

It’s that time of year when I look back to evaluate how my trading strategies have been performing. I tot up the winnings … take a long hard look at the losses … and, I hope, learn some lessons from where I’ve gone wrong.

Now, if you’ve been a Trader’s Bulletin reader for a while, you’ll probably not be surprised to know that the strategy that’s caused me the most soul searching over the past year has been Daily Index Trader.

So, I thought that as 2011 draws to a close, it would be a good moment to confirm some of the facts, and debunk some of the myths about this particular strategy, which has been on a very bumpy road since its launch back in 2010…

There’s been a great deal of chatter on the internet about this system – some of it positive, some of it not. I’ve never been keen to get embroiled in the mud-slinging that goes on on some internet forums, which is why (for the most part) I’ve kept my counsel. However, I thought “What the heck! Why not lay down the facts of the matter?” – and I’ll leave you to draw your own conclusions on the strategy.

The story of Daily Index Trader begins way back in 2009, when Martin Carter first began recording his trading results with this strategy. When he then brought the strategy to me in 2010, and showed me the results he was getting – I was very impressed. So, as always, I insisted on a fully auditable track record that I could show to third parties, so we set up a trading account on 19 April 2010, in which the Daily Index Trader strategy would be traded every single trading day, with no other trades to muddy the results (and Martin has continued to do that to this day).

Unlike many other publishers who use hypothetical back-tested results, at Thames Publishing, any system we publish will be based on actual live traded results. The results of Martin’s live trades in that account were very successful … I started trading it, and my results matched his … beta-testers used it and their results matched his.

We’d gone through all the checks and balances that you’d expect a proper publisher to do, so at that point I decided to go ahead and publish Martin’s system.

The account that we set up that April back in 2010 contained £1,250. Today, the balance on the account stands at about £4691.51 – that’s a 266% return in 20 months.

However, those two figures give little indication of just how interesting the journey from A to B has been!

The strategy went from strength to strength in the year to September 2010. But the drawdown that followed was a nasty one, especially for the many traders who got in in Autumn 2010.

While drawdowns are all part of the trading process, as the publisher, I felt that it was proper that I close down the strategy to new members while it wasn’t performing in line with it’s historical record.

But I wasn’t about to throw the baby out with the bathwater. I have always had faith in the Daily Index Trader methodology, and the historical record it had built up.

Which is why I’ve continued to follow this strategy very closely throughout 2011. And – much to his credit – the system’s creator Martin Carter has also stuck to his guns and showed his true trader’s resilience.

So, how does the story look at year-end 2011?

In 2011, Daily Index Trader has returned 81%. It may not look like the kind of meteoric gains we saw in 2009/10, but it represents a very steady recovery from the drawdown it was struggling through at this time last year.

(Now, I’m not one for conspiracy theories about spread-betting companies, but we have to accept that some brokers are more favourable than others for particular strategies. So it’s worth pointing out that in mid September 2011 Martin switched brokers from Gekko Global Markets to ETX Capital. Since then, the account has grown by 26%.)

At the moment Martin and I are not preparing to open this system up again to new members, but if the strategy starts to hit new highs – we may yet reconsider.

On a personal note, Daily Index Trader has taught me a few important lessons as a trader – to persevere … to be resilient … and not to lose my head and over-stake in the good times …

As a system developer and publisher, it really drove home the message that no matter how stringent your tests and track record – the markets will go ahead and do what they want!

I have always been committed to the strictest testing on Thames Publishing strategies, and I’ll admit that I was riled when a few people out there suggested otherwise. But the one thing we can never do is guarantee future performance.

There are no certainties in this game – which is what makes it so damn exciting!

But, exciting is not the same as reckless. And when I stick my neck out and recommend trading strategies to Trader’s Bulletin readers, I certainly don’t do it lightly – you’d only have to take a look at all the trading strategies that end up in my recycling pile to know that!

Which is why I remain committed to giving you the full story on all strategies – I’m really not interested in papering over the cracks. I started writing Trader’s Bulletin to help out fellow traders – I want this newsletter to be a place that traders turn to for information they can trust – and that remains my ethos for 2012.

Here’s to uncovering some winning systems in 2012 – and to enjoying a very profitable year of trading together!

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