I’ve been doing the rounds recently to discover more about trading courses and classes. I started with a Siam Kidd article last year and followed up earlier this week with another regarding Learn To Trade. Today, I’m going to be talking about my experience with Online Trading Academy and their half-day investing class, held at their premises in St. Albans, just outside of London.
First impressions are positive. OTA have their own training building located on a small industrial estate in St Albans, with plenty of parking and good access from the A1 / M25 corridor. From my previous courses I had an expectation in mind as to what the day would hold but, as it turns out, I was going to be a little surprised at the content.
Usually these things follow a broadly similar pattern of presenting the markets, usually the Forex market, and demonstrating with some simple charts how easy it is to extract money from the markets, “just follow our rules” and “use our software” and you’ll be retired in no time. Obviously this is very far from the truth. OTA’s half day class kicks off with an introduction to our presenter for the day – and he’s the only one in the room – a guy by the name of Graham Spruce, who is, as it turns out, reasonably active on Twitter and, for a change, tweets about NQ, ES and YM, which are the e-mini Futures contracts for the Nasdaq, S&P500 and Dow Jones Industrial indexes. These asset classes are, in my view, a wholly better proposition than FX.
We get to this point very quickly, with Graham telling us early on that OTA offer a 3-day, 9-5 course teaching about Market Timing for £199 which again, I have to say seems pretty reasonable and good value for money – so much so that I’m actually considering going on it in June of this year. Market timing is absolutely crucial as far as making trading and investing decisions goes, and so to hear this is actually quite refreshing.
Graham’s approach is not a sales pitch, much more factual and to-the-point than I have encountered previously. He talks confidently about the market as if he knows what he’s talking about, so early on I decide I might throw a couple of challenges out to test the waters. I’m not an expert by any means but I know a little, perhaps a little more than I’ve initially let on.
What’s interesting here is that Graham talks about Stocks, Futures, Options and Forex. These are the major asset classes to trade and this alone is unusual in it’s approach. I’ve been going to various courses and seminars since 2003 and I can honestly say, this is the first time I have ever seen these thrown out so early on in a presentation, simply because everyone usually tries to get you to trade things that are easy to get into trading – such as Crypto and FX. Getting into trading Futures is more complex, but does have benefits because you’ll be trading the actual underlying market, rather than a brokers’ interpretation of it – assuming you choose a Direct Access broker, that is. More on that later.
90% lose money
There’s an oft-quoted adage floating around the trading industry that 90% of traders lose money. I think it’s actually a touch higher than that, but when Graham announces who’d like to meet a trader he knows who loses 90% of the time, none of the two other attendees (it’s a small course, there are chairs for eight) puts their hand up. However, I do. Why? Well, if you can show me a trader who consistently loses 90% of the time, I’d like to meet that person and find out what they’re doing. That way, I can flip their strategy and suddenly I’m winning 90% of the time. Graham agrees.
He talks about historic traders, those who have made millions from trading, billions even. Talks about getting on the right side of the trade, trading with and when the institutions and banks trade. Again, this is refreshing because it suggests they don’t want you to trade all the time. This is good.
Graham talks about supply and demand, rather than support and resistance. This is also good, because these are the factors that drive the market. Support and resistance is all very well until such time as it fails to be support and resistance, which happens a lot. Support isn’t always support any more than resistance is always resistance. At some point, they both fail and cease to become what they were. So as traders we must ask ourselves what they mean.
Graham also talks about not using company fundamentals as an investment guide because, let’s face it, they might not be all that accurate (Lehman Bros for example), how many people do not understand how the pension system works or how much the majority of the public are going to have to live on in retirement, the fallacy of investing in Unit Trusts and what they are. He spends quite some time on this which is again, refreshing. He talks about very few people having plans for a down market whilst we are in this, the biggest bull run in the history of the modern markets. Again, this is not to be disputed. He also talks about having good diversity in your investment/trading portfolio which is again, a great way of spreading risk and a strategy advocated by many.
Technical Indicators and Risk Management
You may not know this, but I am not a fan of ‘technical indicators’. In fact, let me go so far as to say I think they’re a crock. Everyone will shout out now that they have their favourite, MACD, RSI, Williams, Bollinger, whatever. But my opinion, having traded using indicators, is that they are by and large a complete waste of time, and it’s because they’re historic, in every sense of the word. They do not tell you anything you cannot already see on the chart. There are confirmation of what you already know and hence superfluous. All indicators – prove me wrong by all means – derive the information they can give you from price and/or volume. So why not just use price and volume? (and in spot FX you can’t see volume, so you’ve only got price to work with anyway).
And this is where Graham really surprises me, because he doesn’t like indicators much either, and suggests dispensing with them. He does show me a chart later with some Bollinger Bands on but when pressed, admits that he only uses them for confirmation of something else rather than a decision making tool. Personally I hate them with a passion you can only dream of.
We talk about risk management – and here Graham is a bit different than these guys , advocating to risk no more than 1% on each trade and ideally 0.5% if possible. We also discuss stops, market manipulation and traps, and the reason most traders fail is that they do not have a simple rule based strategy, or at least not one that they stick to. Discipline and sticking to your trading plan. Again, this is good stuff. And of course, they don’t understand market timing. At this point, I’m pretty convinced that Graham is actually a trader. This isn’t from a script, because he can be challenged on it and defend himself with competence, something many cannot unless they really know what they’re talking about.
On the subject of indicators, I challenge Graham a little on the subject of volume, as it is, in my view, a leading indicator. If you’re looking at a 15-minute chart and halfway through that 15 minutes, the volume is double that of the previous 15-minute chart, you might think that something is happening and you’d probably be right. Again, volume can be used as confirmation for trading decisions, along with price. However, when challenged about using something like Depth of Market – a common tool where you can see on your (Futures) price board where the orders might lie – and hence predict supply and demand, he again answers well, saying that it can’t be relied upon because often institutions will ‘ghost’ in limit orders and pull them at the last minute, all quite legit and above board I might add.
This is the first time ever, in nearly 15 years, that I have heard an ‘educator’ talk about limit orders. These are handy little things that enable you to buy at a pre-determined price, so you’re just sitting there, waiting for the market to enter you into a trade. I love limit orders for buy and sell, because it a) means you don’t have to hesitate pulling the trigger, a common problem with traders who start to second-guess their strategy and use Market Orders and b) if you’ve got them in a liquid market like ES/YM/NQ you’re not going to have a problem getting filled.
A good direct access broker, as mentioned earlier, is the best way to trade the market. You’re trading the actual market with these guys, not your brokers’ interpretation of the market as is the case with Spread Betting, for example. Two Direct Access brokers that I know of are TradeStation and Interactive Brokers (google ’em) and I’ve had accounts with both of those guys in the past with no problems whatsoever. Good liquidity, solid reliable platforms and good customer support. They are professional trader packages, and OTA seem to advocate the use of TradeStation, the software that is evident in all of Graham’s screenshots.
Part of the process for entering into the ‘Academy’ involves an admissions process which starts with the course I’m sitting now. It’s followed up by the 3-day, all-day Market Timing Course before you can go into the full Academy. I ask what kind of price this is and I’m told most students spend around £20,000 on the full course which is quite a lot, I think you’ll agree. To go from a free course to a £199 course and then up to £20k – depending on your requirements – is a big step. The process to get to that point involves watching a short online video, completing an online planner and then having a pre-class 1:1 with a coach who will discuss your requirements. However, despite the cost I have to say it all seems quite credible so far. I’ve chatted with a few other OTA staff members who come across as being quite legit, which is again somewhat unusual for this industry.
The strategy itself is patented under US law on patent number 8650115 – see it here – and they apparently have a legal team that will aggressively seek out anyone who tries to divulge the strategy online. I’m not sure how true this is but it seems feasible. I’ve read the patent and you can do so on that link, but essentially it was filed in 2012, approved in 2014 and relates to a “Computer based trading system and methodology utilizing supply and demand analysis”. Again, seems legit. Why bother to go to the trouble of patenting something and defending it if it’s not?
The following topics are covered in the 3-day 9-5 seminar:
- Core strategy
- Basics of buying selling
- How strategy applies to all asset classes
- Building the blueprint for income goals
- Market manipulation and risk management
- Putting it all together
Again, these all seem to make sense and form part of a cohesive, common-sense approach to trading the markets. It’s £199 but you can bring your spouse or significant other for free, which again makes sense as you’re investing for your future together, it’s something you both ought to think about understanding.
The full Academy course also gives you access to OTA’s “Pro Picks” and 2 hours a day on a live trading session with an experienced trader. We were shown what seems to be a credible video of one of these live trading sessions where the instructor is sharing his screen, taking live trades and actually posting profits – as are the vast majority of students who reported in when asked.
Usually this is the bit where I swagger around a bit and essentially suggest that things may not be quite as they seem, that snake oil may well be involved and so on.
But in this instance, I’m not going to do that, because I actually like Graham. Instead I’m going to say that actually, this is a really good half-day (3 hour) course, and that if you’re interested in learning about how to trade, you should go on it. I’m not suggesting for a moment that you should spend any money – that choice is yours to make – but from what I saw yesterday, it’s good content and it stacks up in my experience.
I am quite interested in attending the £199 course, I will say that. This seems like great value for money, but I’m going to reach out to OTA and ask them if they’ll consider letting me attend for free, not only as part of this journalistic process but also as part of my genuine desire to resume and improve my trading. And we will go from there. But so far, OTA would appear to have their stuff together. Which is refreshing.