What is the difference between trading and investing?
A trader concentrates risk, an investor diversifies it.
What is the chance that anyone can become a successful day trader?
With excellent training and a dedicated work ethic, maybe only 20% of people might have a successful trading career, and that’s a generous figure. Most pro trading instructors would honestly tell you that the figure is less than 10%.
What are the characteristics of successful traders?
There are many, including: discipline, focus, resilience, integrity, risk awareness, flexibility, competitiveness, adaptability and the ability to perform under pressure. But even with all these character traits someone might still be unsuccessful while someone who appears quite unsuited to the task can often do very well. It’s a bit of a crapshoot at times.
Can I learn to trade by myself?
Yes. But very few people know where to start or what constitutes the right knowledge. If you have a lot of time, initiative and a competitive spirit, then it is quite possible. But even a short course will move you much further along the learning curve and save you money in the long run.
What is the difference between trading on a simulator and trading live?
It’s like the difference between night and day. Trading is a tremendously psychological game. Once real money (and especially one’s own) is involved, humans often behave in irrational and self-destructive ways.
How important is capital and risk management to trading?
It is the most important aspect of trading and the one that is studied the least. Trading is a business of managing probabilities and most traders blow-up because they do not have a risk management plan.
Does technical analysis work?
This depends what one means by technical analysis. In general, standard, out-of-the-box technical indicators do not work; you will not find too many pro traders who rely on technical indicators. Charting is a more successful method, but it is an art which requires the analysis of thousands of charts before one can develop an intuition for the charts. Traditional trade patterns rarely work in real time, although in retrospect, they often seem to predict the future.
However, technical indicators are effective at establishing discipline for new traders. Also, they can work if they are custom developed and are backed up by a large sample of data. Certain chart patterns can and do work but the fact is almost all new traders have no idea how to interpret these charts. It takes a lot of practice, critical, objective thinking and ideally, a mentor to guide you to their mastery.
How effective is fundamental analysis?
This all depends on how good one’s analysis is! Fundamental analysis is obviously necessary for longer term trades. Ideally, people should assess the fundamentals to understand how institutional traders are positioning themselves, and then use technical analysis for finding the ideal entry and exit points. Fundamental analysis is particularly effective for trading the bond and forex markets.
What is Market Profile, Order Flow and Volume Profile?
These are forms of analysis which developed ideas from the trading pits and brought them to electronic markets. They help us determine whether big traders are actively buying or selling a financial product, understanding whether a short squeeze or capitulation is imminent, where levels of reversal are likely to occur, and so on. One should always try to follow the big money and these tools or approaches help us understand how and where institutions are positioning themselves.
How dominant are trading algorithms in the financial markets?
They are very dominant, but the degree depends on the product of course. The highest volume products, such as the S&P e-mini, or Treasury Notes might have over 80% of their volume originating from a computer algorithm. For many people, these algos seem to obfuscate market direction, especially if one has a very short term approach. But if you understand how to recognize them, or when and where they are most active, you can profit from anticipating their moves. This is a skill which takes time and focus to develop.
Is there a chance for a trader to succeed against trading robots?
Computers will always be faster than a human, but they are not as smart as a human. One can day-trade alongside the robots and succeed, but this is a unique skill that requires much focus and attention. Our Scalp Trading course, taught by a global expert in this style of trading, shows you this technique. But not everyone is suited to this type of trading. Most people have a better chance of success by longer term trading strategies and avoiding situations where speed is critical.
What are the best markets to trade?
The best markets to trade are characterized by high liquidity, transparency and access to significant leverage. The futures market fits all three of the criteria. Forex meets 2 of the other attributes, but lacks transparency. However, not everyone is suited to trading futures or forex and prefer stocks (for a variety of reasons). The main drawbacks of stocks is that they require a greater base of capital to trade, lack leverage, and are more likely to do ‘irrational’ things over the short term. The main advantage of stocks is that they typically react slower to economic news events than futures and one can climb aboard a trend early. This gives anyone with the right training an advantage over many other traders.
To find out what type of trading best suits you we suggest you contact us for a free assessment of your trader profile.
For more details
What is the difference between learning online and in a physical classroom?
This depends on the number of students and the technology being used. Ultimately, the success of any course comes down to the knowledge and talent of the instructor, the quality of the material, the level of personal attention, the ability to interact and engage with the learning community and instructor, as well as the pedagogical method. Physical classrooms begin to lose their effectiveness when class sizes are larger than 12 to 15 students.
To ensure you receive the best possible training, we keep classes small – anywhere between 1 to 6 students, depending on the course. We also have a vibrant chat platform where students and traders mingle and discuss markets and emerging opportunities with instructors and students.
What are the main benefits of learning online?
Convenience, a global network of alumni, the ability to learn from the world’s best traders and instructors, and better value for your educational investment (you’re not indirectly paying for advertising or premium office space!)
Do you travel to meet with students?
Our teachers do travel to train corporate clients and select trading groups. We also have links with international proprietary trading firms where we conduct on-site training.
How is OFA’s business model different from that of other firms?
Most people who take a trading course are motivated by 2 things: the cost of a course (cheap) or the market presence of a school (big advertising budgets). These are obviously the wrong reasons to take a course. It is important to understand that virtually all the material you will find in these cheap courses is available for free online, or in a library book. Secondly, some of the most well-known schools devote about half their revenues to marketing and promotion. In the end, it is you – the consumer – who pays for this.
We are a global collective of successful traders and trading instructors who operate their own trading and investment firms. Teaching is something we do, primarily because we enjoy it, and partly because we have expertise we would simply like to pass on, but also because we are always recruiting talent for partner trading firms. We recognize the great value of supporting a global community of traders as it can lead to other opportunities and partnerships.