Phil and Robert of LS Trader agreed to answer some of my questions regarding the LS Trader spread betting system - a system which they claim is designed to average performance at 150% a year.
FSB: Who developed this trading system? Tell us a little about the background of the developers.
LST: The LS Trader system was developed by Phil Seaton. Phil's been a trader, investor and systems developer for around 10 years. Essentially Phil read a few hundred books on economics, trading, the stock markets, psychology and trading systems and was confronted with a mass of conflicting information so he decided to begin with a clear canvass and test all the different ideas, theories and indicators he had read about.
By doing this he was able to find out what really worked in the markets and what did not and therefore concentrated on things that worked and discarded the rest. Over time the system was developed and fine tuned until Phil was satisfied that the system was robust and would be profitable moving forward. Phil has subsequently been trading the system on his own accounts for several years.
FSB: How long has the system being around?
LST: The system had been developed over the last 10 years but was finished a few years ago. The system has been available to subscribers as LS Trader since October 2008. Previously Phil ran it on his own under the name of The Winning Trader. This was made available to private clients in the middle of 2006 and was released to the public in January 2007. Due to the success of the system Phil joined forces with Robert Stewart and formed LS Trader so that Robert would deal with the marketing and day to day running of the site and Phil would be free to focus on the trading.
FSB: What kind of system is the LS Trader system - is it a black box system or do you provide some details of the system workings to clients?
LST: The LSTrader system (reviewed here) is a medium to long term trend following system. It is a mechanical trading system which has specific rules for everything from where to enter, where to get out, position sizing, money management and various other factors.
We provide an overall understanding of the system from the basis of why we do what we do and our general trading principles but we do not release the actual specifics of the system. We feel that it's too valuable to release the workings of the system and by not releasing the workings we can control the number of people who can use it. Should we reach a critical mass of subscribers to the extent that it was affecting our own trading we would close the site off to new subscribers.
Most indicators or trading systems that have become public have become overused and have therefore lost their effectiveness. We want to make sure that never happens with our system.
FSB: How does the system work in practice and what is it based on?
LST: As stated previously, the system is a mechanical medium to long term trend following system. It essentially identifies price trends and the most likely time for a trend to develop when the conditions are favorable. It then seeks to follow these trends until the evidence suggests that the trend has ended at which point we exit the trade.
It is a rules based system and is not based on analyzing news items or trying to predict the future, but simply identifies and follows trends.
 |
The LS Trader system opens trades once per week.
The 'trade bet calculator' computes all your bets sizes for you based on your account balance.
(note trade market details have been blanked out in this example)
FSB: Why do you believe that the system works?
LST: We don't believe it works, we know it works. Firstly it has been extensively tested and built using a very rigorous testing procedure to ensure that it works across all markets and different trading conditions. It has withstood all the different tests that we have thrown at it from a huge database of market data across a period of nearly 27 years. We have also been trading the system ourselves for the past few years and the results have been on par with or even exceeded the back testing results. On a backtested basis, the system has produced an average annual return in excess of 165% per year.
FSB: What markets does the LS Trader trading system cover?
LST: Our research has proven that diversification improves performance by both increasing the annual returns and at the same time lowering risk. Therefore we trade across the major different markets and trade a total of 43 markets. These range from commodities like Gold, Crude Oil, Wheat etc, forex markets, interest rate futures and stock indexes.
FSB: What time frame is the system developed for?
LST: The system uses end of day data and is essentially a weekly system. It is only necessary to open trades once per week, which we do on a Monday. We also on the Monday adjust our stop losses on the markets that we are already in to either reduce risk or lock in profits. Then we leave it alone until the following week. It takes around 15 minutes per week to follow.
FSB: Who is it suitable for?
LST: Anyone who wants to make a tax free income in around 15 minutes per week and has a pc with an internet connection. No previous knowledge of the stock markets is required and no technical knowledge is required. We provide ample instruction in the member's area ranging from how to open a spread betting account right through to how to open trades and how to move stops. Everything that is need is supplied.
FSB: How many trades are typically made each week?
LST: The system typically makes around 150 to 200 trades per year which breaks down on average to 3-5 trades per week.
FSB: How much capital is required/recommended to trade the system?
LST: It is possible to start with as little as £2000 but at least £3000 is ideal, more is better. Obviously small accounts are a bit limited as to how many markets they can trade initially but over time the account size can be built up quite well even from a small start.
We always stress that this should not be money that is required to live on but should be expendable money. The reason for this is that if you need the money or it is worry money for you then it will likely prevent you from following the system correctly and this is where people can get in to trouble.
FSB: It is my understanding that you have different account portfolios based by account size. Tell us more about the different portfolios and risk per trade applicable to each.
>> Page 2 - LSTrader Interview Continues Here: Questions about the System
Please do not copy/paste this content without permission. If you want to use any of it on your website contact us via email at 
traderATfinancial-spread-betting.com (remove the AT and substitute by @).