My efforts to learn how to day trade or swing trade using technical analysis have taken me to a second course (the first being OTA or Online Trading Academy). As I don't think I posted here on OTA before, I found the instructor--Chris Muldoon-- to be good, but the infrastructure or delivery mechanism of OTA to be seriously deficient. Also, the 7 day course was simply not enough to launch one into being able to trade. More later on OTA. (Reminders to self: cover the flawed use of TradeStation, the poor quality of the written material, the mess-up over my retake, the badly designed website, the stupid sales efforts.)
This post is about the second course I tried, which is provided by Barry Burns (BB hereafter). His web-based selling process can be annoying, but what convinced me to buy it was his free 5-video series n which he lays out some basic concepts so that you can see how he teaches. About $300 cost for a series of videos, pdf documents, and Word files. The downloading of these and unlocking of them using security codes takes awhile, maybe an hour. The materials are not very well organized. It seeems that he threw in additional materials to fill in holes in the initial material, and called them "special bonuses" instead of "bug fixes". His delivery is very clear and easy to listen to/follow in the videos. Much of the material is "filler"-not really telling you anything new, just repeating what he has already presented. This course is considerably cheaper than most. It is also very much a "one-man show". These are his personal favorite ideas, rather than the product of an organization that has done research and testing. BB said to me in an email (one good thing is he does make himself available for emails in reply to questions) that he is not a believer in the value ofbacktesting. He also admitted in another email that he has no knowledge of Excel, which I found hard to believe.
He begins with Trends (covered in course 1 of 2), which he defines based on a 50 period moving average rather than the classic "higher highs, higher lows; lower highs lower lows" definition. (I think a 50 period moving average is a better way to measure a trend than relying only on the "outliers" that constitute extreme highs and lows. But there is still some ambiguity that arises from the possibility of a 50 period MA becoming flat or nearly flat.) A trend ends when the 50 MA goes flat or becomes close to flat. BB says that if the trend looks close to flat, one should default to calling it flat. An trend is not necessarily followed by a trend in the opposite direction. A downtrend could be followed by another downtrend. These would be treated as two separate downtrends, rather than a single downtrend. Once a trend has been identified, the trader is to count "waves", which are straight lines connecting cycle highs and cycle lows. The cycles are analagous to breathing. A typical trend lasts for five waves, but could be three or more than 5. The purpose of counting the waves is to try to identify whether the price is at an early part of the trend, the middle, or the end. The goal is to trade the stock in the middle of the trend, after it is far enough along so that it will likely continue, but not so far along that it will be likely to reverse. The logic is ok, but I wonder whether it is really possible to predict how long a trend is going to last from the trading activity alone.
He uses a 15 period EMA in addition to the 50 SMA. Not sure exactly why.
The second major concept is momentum, covered in couse 2 of 2. (Example of quality problem--the manual for course two does not have page numbers whereas course 1 manual does.)
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