NEWSLETTER

============================================= Thursday, November 6, 2003

A Free Winning Roulette System - More on ITS

This week we will be discussing a roulette system, that was posted by a friend from Cyprus. His name is Kani and his winning idea is indeed very interesting.

Kani's system consists of a 55 step progression and he bets on the single streets in Roulette. Single streets consist of the set of 3 numbers, such as 1-2-3 or 4-5-6, etc.

We will refer to them as streets numbers 1-12 respectively. So street 1 will be the 3 numbers 1-2-3. Street 2 will be 4-5-6. Street 3 will be 7-8-9, all the way to street 12 which will consist of 34-35-36.

Kani bets on all the 12 streets, but with a special way. He first places one unit on all 12 streets and tracks which street will show up. Of course, placing a unit on all 12 streets is equivalent to not placing any bet at all, since the streets pay 12 to 1 and the profit will be null. And a zero could wipe out all the 12 units. Therefore, our first bet will be a mere observation of which street has hit. And if this happens to be a zero, we observe one more decision until one of the 12 streets hits.

Let's say number 8 comes up. This belongs to street no. 3. So the next bet is on the 11 other streets, that is, on all streets but no. 3. How much do we bet on each street? The amount of the first entry of the progression table below:

Spin/Bet per Street (in units) ------ -------------------------------- 1 0 2 1 3 1 4 1 5 2 6 2 7 2 8 3 9 3 10 4 11 5 12 6 13 7 14 8 15 9 16 10 17 11 18 12 19 13 20 14 21 15 22 17 23 19 24 21 25 23 26 25 27 27 28 29 29 31 30 34 31 37 32 40 33 43 34 47 35 52 36 57 37 62 38 67 39 74 40 81 41 89 42 97 43 107 44 116 45 127 46 138 47 150 48 165 49 180 50 195 51 215 52 235 53 255 54 280 55 305

The figures are in units. Kani plays with $0.10 units. They can be $1, $5, or any unit that the table allows. The progression goes from 1 unit all the way to 305. However, there won't be any need to go that far. You will see, that we will have exit points, particularly when we are ahead.

Now, why would this be a winning system? The progression is built in such a way, that when all streets are hit within 55 spins, one will make a profit. However, one will make a profit also on the way to hitting all streets, while advancing on the progression. The question is when to quit.

Roulette Number is the actual number that comes up on the roulette wheel. Street 1-12 is the street no. as explained above Spin no. is the number of the spin. No. of streets to bet on decreases as we cover more streets. Bet per street is per the progression table. Total bet is calculated by the bet per street times the number of streets we're betting on. The unit value used is $1. Win/Lose is a "W" when one of the streets we're betting on hit, a "L", when it doesn't hit. Cash is what we gain or lose per bet. Net is the net running total.

The very first spin is an observation. We see Street 10 hits. Then we bet on all the other streets. As expected, the very first bet wins, bringing us ahead by $1. We cross out streets 5 and 10 and bet on all the remaining ones, etc.

In Example 2, we see that we end up negative if we continue to cover all the streets. This is why an exit point is necessary. We see around spin 16, we have a decent profit. This is an indication to quit the progression.

In example 3, we are negative most of the time, except at the very beginning and towards the very end. We also observe that the bet per street goes to 107 units, which may surpass some table limits. One way to overcome that is to split the bet into the 3 numbers equally. So, instead of betting 107 units on one streets, you could bet 36 units on each of the 3 numbers of those streets.

Example 3 also shows that you may need a very large bankroll to pursue with the progression. One may not have the patience or the courage to continue with it, as the losses incurred may rise quite high. So in this case, we see that the suggestion of leaving the progression at the earlier stages is much more valid.

The ITS - Intraday Trade system announced 3 weeks ago, is doing extremely well. The course
is $2000 and the purchasers may return it for a full refund, if the trades do not produce a profit
during the free testing period. The fact that no one has returned it for 3 weeks shows that it's
making daily profits.

If – following these principles – you have an OVERALL loss over these 10 trades, you are refunded without discussion.

Q. Hi Edmond, I'm from England and bought your TTS system. Am interested in your new method only because this method is TOTALLY non subjective. Everyone should come up with the same numbers unlike the TTS method where the bands may be different depending on which high/low points you pick. Is this correct? Can you play this method with options at all or is it spread betting? Don't like using no stop loss!! How far have you actually checked this method on the FTSE 100 and what if anything do you see as the potential weakness in the method. will it work on all types on market conditions or is it based on the volatility approach.

Best wishes

A. ITS is specially developed for spread betting. However, you can apply it also for options, futures and stocks as explained in the course.

If you use it for the special spread betting it is designed for, you don't need stops because you are absolutely protected and know in advance exactly how much you risk on a trade.

If you want to use it for options, you need indeed to use a stop. I'm using simply 50% stop loss when I trade options.

I have thoroughly tested it on all indexes, individual stocks and commodities. The results are the same for all markets traded but you have a limited offering of markets with the special spread betting ITS is made for.

To conclude: consider ITS a trading system specially developed for spread betting but also giving excellent results for "normal" trading.

Q. So will it work for spreads like May corn /May soybeans as well or similar? Do you need a bar chart with open , high, low close etc. or will it work from closing prices alone? What software did you use for back-testing your results and will I come up with exactly the same numbers as you? No SUBJECTIVITY!!

A. You need a complete bar graph: open, high, low, close.
I didn't even use any software for testing: I only used a bar graph of the FTSE on the internet.
You can use Yahoo or whatever. I used http://www.night-trading.com/charts/. This is a very good and easy to use Dutch website. Following the rules of ITS test procedure, you'll come up with exactly the same results as I have. In fact you could feed the test procedure to a computer and it would make the same trades.

Q. What sort of drawdown is there with the method and will the results be similar if I just traded futures or individual stocks instead? Will the ratio be 70% wins using 30 point loss to 70 point win?

A. Drawdown per trade when using it for spread betting is fixed by yourself. For example 30 or 40 or 50. When using it for normal trading, the drawdown depends on your stop loss and where you get out exactly (as a stop loss does not guarantee that you get out at the defined level).
So to come back to the spread betting: if you decide to risk 30 points on one trade, that's exactly what you'll lose when you have a bad trade. Because you have a better than 70% success rate and you risk only 10% on one trade, it's easy to see that a drawdown will barely exist at all.
Take care when using ITS on other trading instruments as spread betting, because you'll still have a better than 70% success rate, but you don't control as absolutely your profit/loss ratio.

Q. Is the profit ratio always 70 for a win? What I mean is on the 70% of winners will the profit target of 70 points always be hit. Do you always get out at the end of the day or can the trade last a few days?

A. Profit ratio depends on the maximum risk you take. If you take for example 30 points risk, your potential profit will be 70 points. You always get out at the end of the day, at least for spread betting.

Q. It's OK to have a 70 point profit target but it may only be hit maybe 50% of the time.
You state that that your winners are over 70% and losers are 30%.
So if you have 70 winners at 70 units = 4900 units and 30 losers at 30 units= 900. That leaves 4000 units profit. Do you see what I'm getting at here? What is the actual unit win rate?

A. To resume it in another way: I meant that you make 70 points profit on all profitable trades (70% or more). So indeed your calculation is right: if you profit only on 70% of your trades, your total profit will be (70 X 70 units) - (30 X 30 units) = 4000 units. Looks fantastic to me.
And please remember that 70% win rate is very conservative, as I had a 100% win rate on the FTSE!

Click here to read more about ITS and to place your orders. Your investment will have a huge return.