Hi,
I've read a lot over the last year regarding Goldline and kept quiet. I purchased the system 18 months ago. Why? because I was using their horse racing program and making a small profit (£100/month approx) and was offered it cheap. Like a lot of people I've always been interested in looking for the real get rich quick scheme, which doesn't exist. Shares seemed a logical step along the road, after all we all know stock traders make obscene profits!
So 18 months down the road I now know a lot more about trading than I did before. I can download historical data, draw charts, apply indicators and back-test systems. So what about Goldline, does it work, would I buy it now?
Yes it does work, it does return a profit over the longer term, their are periods of draw-down, but then doesn't every system. If you want a system that trades indices via spread betting which will make you a profit then Goldline is an option. It's automated, has excellent money management (the strength of the package for beginners), and via some back-testing of my own will generate a profit long term.
No, I would not personally buy it now. If you are prepared to work at learning how to trade, starting with the basics of charting and simple indicators you can soon devise systems which will show profits. So long as you stop looking for all the answers from other people and are prepared to do some work yourself. The other reason, is that I now understand money management, probably the most important and critical aspect of trading and yet the least talked about or understood. Having lost all the Goldline profit over the first year! I now trade both Goldline and my own trading system, and both are returning consistent profit.
So how does it work. Firstly, I have not reverse engineered the program, I have just recorded all the recommendations over a couple of months and worked out a system that gives approximately the same signals. I am not claiming it is the actual Goldline system, just a close approximation which via back testing generates a profit.
If you take one of the four indices (Dow, Nasdaq, Dax and Nikkie Not FTSE!) say the dow, and plot a 20 day moving average of the average daily value ((O+C+H+L)/4) and offset this by a measure to allow for the average volatility, you end up with three lines. My lines are the 20 day simple moving average of (O+H+L+C)/4, and upper line which is offset by adding 1.25* 50 day moving average of the range, and a lower line which is offset by the same amount. This gives a channel, which moves with the price when the market is going sideways, increases or decreases as the market becomes more or les volatile. When the market starts to trend, and it only needs a trending period of a week or so, the system will generate a buy or sell signal, when the price moves outside the outer bands. It is thus a trend following system.
Like most trend following systems, it gets you in late and out after the top (or bottom), but because the program uses trailing stops, will frequently generate a profit.
I have not worked out all the details of the stops used by the program yet, the initial stop is the middle line, after all, if the index moves by more than 125% of its recent volatility it is unlikely to retrace back the following day. This stop is held in place for a couple of days (it varies due to some unknown parameters) then the stop is moved to follow the direction of the market, it gradually moves from the centre line to the upper band, as in a trending market the bands will be lagging the market.
That is basically how it works. My version is to use the middle band as the stop, not moving it for 3 days, then moving it to follow the middle band until the index is visually above the upper band by a fair margin. Then I switch to the upper band which should lock in more profits but occasionally gets you out to early. The attached chart shows the bands along with the dow high and low for this year.
Before I sign off, I'm not going to give more details than already provided, if you can't follow this then you need to study a bit more and maybe buy a couple of books. I recently read 'Technical Analysis for Dummies' again and was surprised how much extra was in their from my first reading! Secondly, I will reply but am currently working in the North and living in the South so am only home at weekends. Whilst I'm happy to use my PC at work to place trades and move stops, I can't spend long periods reading or answering posts, I save it for the weekend. Evenings without the family are great for reading and back-testing though!
Regards Stephen
I've read a lot over the last year regarding Goldline and kept quiet. I purchased the system 18 months ago. Why? because I was using their horse racing program and making a small profit (£100/month approx) and was offered it cheap. Like a lot of people I've always been interested in looking for the real get rich quick scheme, which doesn't exist. Shares seemed a logical step along the road, after all we all know stock traders make obscene profits!
So 18 months down the road I now know a lot more about trading than I did before. I can download historical data, draw charts, apply indicators and back-test systems. So what about Goldline, does it work, would I buy it now?
Yes it does work, it does return a profit over the longer term, their are periods of draw-down, but then doesn't every system. If you want a system that trades indices via spread betting which will make you a profit then Goldline is an option. It's automated, has excellent money management (the strength of the package for beginners), and via some back-testing of my own will generate a profit long term.
No, I would not personally buy it now. If you are prepared to work at learning how to trade, starting with the basics of charting and simple indicators you can soon devise systems which will show profits. So long as you stop looking for all the answers from other people and are prepared to do some work yourself. The other reason, is that I now understand money management, probably the most important and critical aspect of trading and yet the least talked about or understood. Having lost all the Goldline profit over the first year! I now trade both Goldline and my own trading system, and both are returning consistent profit.
So how does it work. Firstly, I have not reverse engineered the program, I have just recorded all the recommendations over a couple of months and worked out a system that gives approximately the same signals. I am not claiming it is the actual Goldline system, just a close approximation which via back testing generates a profit.
If you take one of the four indices (Dow, Nasdaq, Dax and Nikkie Not FTSE!) say the dow, and plot a 20 day moving average of the average daily value ((O+C+H+L)/4) and offset this by a measure to allow for the average volatility, you end up with three lines. My lines are the 20 day simple moving average of (O+H+L+C)/4, and upper line which is offset by adding 1.25* 50 day moving average of the range, and a lower line which is offset by the same amount. This gives a channel, which moves with the price when the market is going sideways, increases or decreases as the market becomes more or les volatile. When the market starts to trend, and it only needs a trending period of a week or so, the system will generate a buy or sell signal, when the price moves outside the outer bands. It is thus a trend following system.
Like most trend following systems, it gets you in late and out after the top (or bottom), but because the program uses trailing stops, will frequently generate a profit.
I have not worked out all the details of the stops used by the program yet, the initial stop is the middle line, after all, if the index moves by more than 125% of its recent volatility it is unlikely to retrace back the following day. This stop is held in place for a couple of days (it varies due to some unknown parameters) then the stop is moved to follow the direction of the market, it gradually moves from the centre line to the upper band, as in a trending market the bands will be lagging the market.
That is basically how it works. My version is to use the middle band as the stop, not moving it for 3 days, then moving it to follow the middle band until the index is visually above the upper band by a fair margin. Then I switch to the upper band which should lock in more profits but occasionally gets you out to early. The attached chart shows the bands along with the dow high and low for this year.
Before I sign off, I'm not going to give more details than already provided, if you can't follow this then you need to study a bit more and maybe buy a couple of books. I recently read 'Technical Analysis for Dummies' again and was surprised how much extra was in their from my first reading! Secondly, I will reply but am currently working in the North and living in the South so am only home at weekends. Whilst I'm happy to use my PC at work to place trades and move stops, I can't spend long periods reading or answering posts, I save it for the weekend. Evenings without the family are great for reading and back-testing though!
Regards Stephen
