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Sharefinder... should I or not?!

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bonkerrs

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I have been on/off with the idea of trading shares for many years now, right now I'm 'ON' again

This brings me to asking here about Sharefinder's SPA package. I was interested in their product last time I was 'ON'... about 4-6 years ago. Back then they had a regular column in a share magazine (can't remember which one) and the portfolio was doing quite well. That caught my eye plus the fact that Louise Bedford used them and spoke about them in her charting book. Don't know if she is still using them now.

I would greatly appreciate if anyone who uses them or have any comments about them to reply to this post, particularly on SPA - Market Master. I'm keen to hear about anything to do with Sharefinder's products.

p.s. they are referred to as a 'black box' trading software... is this right?
 

Before you invest a cent in this, you should check out Nick's site www.thechartist.com.au

Single handidly the best value for money in education and advice in investing/trading.

Cheers,
 
I guess basically what i'm after is a charting software that has buy/sell indicators but has them based on a mixture of my own rules and the software pre-loaded indictors.
 
Hi Bonkerrs,
I'm fairly new to this forum but having traded for many years I'm always on the lookout for new sources of information and opinions. I have been a Sharefinder customer for most of this time and use their SPA package. Consequently, these two facts have lead me to your post. I hope it helps someone.

Depending on your definition of flexible and how much you want to add yourself, SPA does allow you to adjust the rules and your risk profile by numerous methods but you don't have to. The best thing is, you can back test them to make sure they work!

Before I answer your question, let me first say it's NOT a black box system. I hate these and the sharks that sell them vehemently; closely followed by stock picking/ramping newsletters . With SPA, nothing is hidden and everything is clearly documented in the manual. For example, all the buy/sell signals are based on known technical indicators.

OK, more info' from your question:
Market Master is a charting package and a very good one. Apparently Bloomberg have just installed it on every global trading terminal. Not bad! Their data feed is also very clean, one of the best. SPA leverage's off Market Masters functionality.

The SPA product is a complete "Methodology" and I mean "complete". It includes Technical Signals, Money Management and Risk management, all of which are transparent to the user. I haven't seen this combination from anyone else in Australia. Again, you can back test and prove everything. It is primarily used to actively trade shares. The outcome is a "high probability" that you will consistently make money over the medium and therefore long term. And it does....

Performance is an easy one. My latest portfolio, started in Sept06 with $100k is currently sitting at $150k, about 65%pa (after all costs). The XAO-AC has only risen 30% in this fantastic year. My largest short term drawdown was about 10%, caused by China sneezing in March. As you noted Sharefinder and SPA have been around for a long time. I've met many long term customers that have averaged 25%pa over these years. This also happens to be the average researched return. Eg:Sharefinder run a public portfolio open to scrutiny that has averaged about 28%pa over the last 6 years.

For me the real test is how much effort was required to achieve my profit; about 10-20 minutes each day plus the actual trading and paperwork time. Of course, it took longer when I first started but eventually I became very mechanical about it. I've introduced a few friends to SPA that have never traded but wanted to achieve better returns for their Super etc. They have all been able to use it successfully.

So for my direct personal opinion, should you buy it? Yes! (If it suits your need)

Cheers and good luck!
 
I have been using the spa system for 5 years now and it suites my style of trading,the returns have been very positive and I would recommend them for mechanical trading
 

Hi Look Left,

If this SPA sharefinder package isn't a black box system, then why are they charging over $2500 for it? What makes this worth 15 times as much as something like Amibroker?
 
Hi Bonkerrs

I haven’t used Share finder but Look Lefts account is pretty much what I have heard unlike many others in the business it would not be a bad place to start you can do a lot worse.

Prof AB is I think the best valve bar none for a charting package but you do need a trading system and some time to harness its power

From what I understand using Market Master with SPA pretty much gives you that from day one just depends where you are in the trading journey I guess…..


Focus
 
Hi Bob,
The general trading community tends to refer to anything that comes in a package as a "Black box system" and seldom give any credence to real methodologies. I think this is either because there have been or are to many "bad eggs" out there or they just haven't taken the time to discover the difference. Classic examples of "black box" systems are the many software packages we see each year showing multiple moving bars or dials supposedly giving trend strength indications, etc and telling you to buy or sell. These are often little more than moving average indicators, which are of little use on their own. These black box systems have no transparency or historic evidence; you can't see inside. Thus the term "Black Box".

As I said in my first reply, with SPA everything is visible and everything is very well documented. The included Money and Risk management are priceless, something every successful trader knows are critical. The only propriety piece of information is one technical indicator, the SIROC. I believe this is owned by the Market Master software company, not Sharefinder, so is available to anyone with Market Master.

Your main question is a good one; What do you get for your AUD$2500? What's the value?

The Market Master charting package is included in this price. Alone it's worth about AUD$1000. Other professional style charting packages such as MetaStock range in value from AUD$700 to AUD$5000. I looked at several of these before settling on Market Master years ago. It was the best 'value for money' for me then. After perusing the AmiBroker spec's it may be that AmiBroker, and other packages, are be better "Value for money" for some people. There are to many personal factors to consider.

But AmiBroker is not a methodology or a even a black box system, it's just a charting/testing package.

The remaining AUD$1500 could probably be valued at more than $5000 IMHO. Why...
There are many traders out there that spend a fortune on books and courses and never implement their new knowledge. So how much was your last training course or your last wiz-bang trading book, AND you how much did you get out of them (rhetorical). I'm mean REALLY get out of them. How much have you implemented! How much have they permanently changed your trading style, your trading psychology and your trading outcome?

I've learnt more from the SPA methodology, the manuals and the company members themselves than any book I have on my shelf. (In fact the more advanced books now make sense). But more importantly, my trading is now mechanical and consistent, my trading psychology is improving every day and my bank balance hasn't looked back.

What is the $1500 worth. Hmmm... 3% of the profits it created this year alone and a good nights sleep.

Cheers!
 
Look Left said:
Sharefinder run a public portfolio open to scrutiny that has averaged about 28%pa over the last 6 years.
Click to expand...

Is this in the newsletter emails they send out to anyone who subscribes?

Backtesting. How is this done? Can I get an example of how backtesting is performed with SPA MM? By backtesting, are you backtesting an indicator to see if it will hold true?

Sorry if my posts are short and meaningless, I have nothing to add because I don't know anything at this stage. All I have is questions so far!
 
Good Morning Bonkerss,
Never apologise for asking thoughtful questions, it's a great way to learn and may help you stay out of trouble. The trick is to make sure the answer is factual AND makes sense.

Details of the public portfolio/s are made available through several means.
  • Primarily, the complete list of trades from the 6 years is available for every members to download and load into the portfolio management software. (See graph below). We can scrutinise EVERY trade; study the signal, the amount, the timing, the risk values. They also have a written trading plan which must be obeyed. On the rare occasion they make a mistake, the trade is closed immediately but NOT deleted, which adds reality to the portfolio.
Additional means are:
​
  • Every day the data download displays the last 5 days buy/sells in the background.
  • Each week the email newsletter provides an update of how the various portfolios have changed. (It also includes an international and local market summary).
  • Each month a video newsletter (eUGM) is sent out that includes items like training, market updates and explanations. It also covers the Portfolios on a regular basis.
Below is a graph of the portfolio as of last week. This picture tells the story. For details buy the book.


Back testing is done using a combination of Market Master (MM) and the portfolio management tool known as TradeMaster(TM). MM scans the stocks using the SPA technical indicator rules to produce a list of every signal. TM is then used to import the signals; applying the signal sequence and money/risk management rules to eventually produce a portfolio of trades.

In both MM and TM you can change all the SPA parameters to test thousands of combinations of indicator settings and money/risk management rules. (But you don't have to). In MM you can change the indicator settings, like Volatility and SIROC smoothing but you can't apply new indicators automatically. In TM you can change the money/risk management rules, like risk allocation and brokerage, even turning them off.

So effectively, the back testing allows you to "play" with the methodology, tuning it to your own needs and trying to improve it. Most people only play with the money/risk management rules because the trading signals are so robust. Again the methodology's transparency is rare.

Cheers!

A wise trader once said:
"Money and risk management won't make a losing trading system profitable but bad management can turn a profitable trading system into a loser! It can also make a profitable trading system even better."
 
Just received the promotional CD-Rom, it's basically a recording of one of their intro nights + other stuff on it. Haven't had a chance to view the contents yet.

Right now, I'm probably above 50% sold on the SPA.
 
They have a presentation in Brissy which I plan to attend to get some more idea. Will post back with what I see there.
 
R0n1n said:
They have a presentation in Brissy which I plan to attend to get some more idea. Will post back with what I see there.
Click to expand...

Good stuff!! I wanted to go to one but just missed the Sydney presentation and they don't have one planned here at the moment. At this stage, do you know much about them?
 
On the rare occasion they make a mistake, the trade is closed immediately but NOT deleted, which adds reality to the portfolio
Click to expand...

Apart from Nick Radge I am not aware of any others that are as transparent
 
bonkerrs said:
Good stuff!! I wanted to go to one but just missed the Sydney presentation and they don't have one planned here at the moment. At this stage, do you know much about them?
Click to expand...

Bonkers, I have heard about them from various people but wanted to see in real what the real deal is. Some who have made money from them can't stop prasing them others just say they are average.
 
Yes, the Sharefinder members are a very dedicated group and many like myself have no problem praising the products and company. I suppose it's because we have gained so much, mentally and financially; we've put in a large amount of effort to learn how the methodology works and what things can go wrong. Most of all, what you see is what you get!

I won't pigeon hole those that don't do so well but I will put forward several reasons, all of which are discussed openly on the Sharefinder Forum.
  1. The biggest reason people fail with SPA is they fail to follow the rules for various reasons: They miss signals, don't fill all their positions, second guess the market or the methodology etc. So for most of the time only 50% of their money is in the market. The other 50% is sitting in the bank earning nothing. Simple maths tells you the return is already halved. They have also stopped the affect of compounding and reduced their probability of achieving an expected return, as both items rely on churning your money through the market. The end result is a low return.
  2. Second reason is starting with a small account. The percentage brokerage costs are to high and rapidly eat into your profit. This leads to meltdown!
  3. Stop to soon. SPA is a medium term methodology and yet people expect it to work in the first month. They want every trade to be profitable. So they stop after a few losing trades. Those that continue past the initial closed trade drawdown never look back.
I can give you a great example of item 1. Recently, i helped another member who had two large SPA portfolios. One produced about 55%(his wifes!) while his only produced 14%, since Sep06. Why the difference? I analysed the portfolios and found that both portfolios had periods when they weren't fully invested according to the rules. The wife's wasn't to bad but could have been a lot better. However, his was under invested by over 30% for large periods. He had failed to consistently fill all his planned positions in a rapid manner. The good part is, the user is now even more dedicated to following his trading plan and acting immediately to get his money in the market. The light bulb just switched on!

I hope you enjoy the presentation. Take an open mind and ask lot's of questions for Bonkerrs. Have a chat with Gary Stone if you can. You should find him direct and friendly.

Cheers!
 
ok guys just back from the presentation. So here it goes..

Shortform:
its great for someone starting in the share market who does not know how to interpret charts/indicators etc. Its a medium term system with money management built in. The return that I was shown till date was 67% pa, this includes brokerage.

Longform:
It was a 3 hour presentation. The system is long only, no short or leveraged product support, so no CFDs etc. In a down market you will not get any buy signal, and yes its a fully mechinacal system or you can say its a technical charting package with a trading system/money management built on top of it.

I did ask loads of questions and Gary did answer them upfront. There were no claims of 100% returns or 100% hit rate etc or any magic potion formula.

I did ask him about the indicators the system used and to my surprise Gary actually showed me all the indicators the system used (6 of them). Except for SIROC all are public domain. He was upfront about the SIROC as well in that if I did enough research I will probably understand and be able to code it up. You can add more indicators to the system but then ur results will wary. The scans everyday spit out a list of stocks which are grouped by high risk, medium risk, low risk and no trade.

As I said above if u have just entered the stock market or about to enter this system will save u from fair amount of pain.

There was no hard sell, although there is no coaching provided, one to one or group style, its is assumed that you will read the manual and follow the buy/sell signals, kind of monkey see monkey do. It seems to be geared towards people who do not wanna or cannot dedicate the time to learn indicators, price actions etc and everything else required to trade successfully and consistently. (from what I saw when buy signals were triggerd, the system did not show which indicators triggered them and at what value. There could be an option of doing it somewhere in the package but I did not see it.)

If you have any more questions, do ask.
 
R0n1n,
That was a very fair an unbiased review. Thank you!!

I have two clarifications and one personal view to add. (Edit: Added one)
In a down market you will not get any buy signal
Click to expand...
You do get signals in a down market but they are fewer and money management rules come into play. But yes, it is only a LONG system.

(from what I saw when buy signals were triggerd, the system did not show which indicators triggered them and at what value. There could be an option of doing it somewhere in the package but I did not see it.)
Click to expand...
All the signals and their associated values are documented in the manual. Up until 3 years ago users had to manually scan for the buy/sell signals. Now days, a symbol appears on the Market Master chart and all the signals information can be obtained by clicking on the signal. To speed up the whole scan process and help traders become mechanical an automatic scanner generates the list you mentioned.

It seems to be geared towards people who do not wanna or cannot dedicate the time to learn indicators, price actions etc and everything else required to trade successfully and consistently.
Click to expand...
Although this is a fair comment, in the real world becoming a successful and consistent trader is damn hard. Very hard! It takes years. You only have to look at this forum for evidence. So I would suggest that it's not only for those not wishing to go through the hard yakka but for those wishing to start trading with a solid foundation, more experienced traders that have failed to achieve their dreams and everyone wanting further education. I'm a full time trader/researcher and it's helped me.

Cheers!

PS: I believe CFD adaptation is coming in the next 6 months.
 
Thanks R0n1n for the review.

At this stage I fall into the catergory of 'people who don't have a lot of time learning about indicators or maybe don't have the desire to' but would like to start investing. This software is sounding even more attractive to me!:

I wanted to start somewhere and I think this is a great opportunity to learn and trade live (maybe not straight away) at the same time.

This is a very big ball park type of question, say... I have 30K to buy the software and use the remaining amount as trading capital and I trade following the indicators and money management rules ruthlessly. Based on your experience and present results. Do you think it is possible to withdraw an amount of $$ annually from the capital (in the first couple of years trading)? Maybe a few hundred bucks? This question shows how new to investing I am at the moment.

Whaat other costs are involved after the initial software purchase, eg. data provider fees (monthly/annually)? Who provides the data for SPA?
 
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