LS Trader: Results Further Explained

Today I am going to explain more about our results on the LS Trader website focusing on the spreads. It is important to remember that the spread is already included in the results. IG Index changed their platform about 2 years or so ago at which point they moved from using the mid price (plus spread after exit) to using the stop price as the sell point which includes the spread. Therefore, when a trade gets closed, the spread is already included in that figure, so the results on our website actually include the spreads.

It also includes the spread on all the rollover positions as well as the exact spread discount that is given by IG Index when doing a rollover. Because of this, I widen the entry stops to include the spread opening and closing so that as the stop is slightly wider, the bet size is slightly smaller, so the spread is most definitely covered and factored in to the results.

One reason why this system is so effective is that it is not a frequent trading system. It averages around 4 trades per week and some times we are in trades for several months. The spread is therefore insignificant as the low frequency of trades only generates a small spread. It is short term systems such as day trading systems that have issues with spread as they trade so frequently that in most cases they cannot beat the spread they generate, which is one of the reasons day trading does not work.

Also, the spread is small on most markets. If you take Wheat, Corn or Oats as an example the opening and closing spread combined is 2 points. We will often use stops between 80 & 100 points for these markets so that means the total spread is only around 2%.

I hope that provides another insight into our results.

Kind Regards,

Robert Stewart