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OANDA’s Paul Hayward tells Tom Welsh what to expect from City A.M.’s trading conference

Q How did you get involved in trading?

A I started working as a trader for a market-maker in 1985, and technical analysis featured heavily on the risk and position management side of things. I then became more involved in sales. I worked at HSBC in the 1990s, and had an opportunity to work in the Middle East for OANDA, which was a breath of fresh air. It has a different approach to the market and is very technologically-advanced.

Q You’ll be speaking at City A.M.’s Active Trader Conference about technical analysis. What will you cover, and what will traders get from your discussion?

A We’ll cover a broad variety of topics. It will probably range from questions about risk management to pattern recognition, and perhaps the use of key indicators and overlays. Anyone attending will also be interested to find out how our clients use technical analysis, and who uses it more successfully than others.

Q How can learning the principles of technical analysis improve a trader’s performance?

A From a newcomer’s perspective, an understanding of simple techniques enforces a sense of risk and position management. This is absolutely fundamental to the trading process. Ultimately, preservation of capital is critical, and technical analysis helps improve performance in that respect. An understanding of basic tools – pattern recognition, for instance – can help a trader understand when and where to enter the market. And when technical analysis becomes more sophisticated, it’s more about trying to predict market direction – trends, counter-trends and so on. Charts reflect trader behaviour, and so it’s key they have an understanding of how they work.

Q What advice would you give to novices approaching the subject for the first time?

A Technical analysis is more a dark art than an absolute science. It’s important to take time to learn the basics, to recognise areas of support and resistance, to see how trends are developing. Ultimately the best advice is to start small. Risk small amounts, develop your skills. As you do so, you can begin to develop your confidence.

Q Why is technical analysis particularly useful for forex traders?

A Forex is a large market. You’re trading one currency against another in a broad macro context. You therefore need some way of enforcing discipline on yourself to see where and when you’re going to enter and exit. It’s fine if you’re an economist with a broad understanding of how fundamentals affect currencies. But the majority of traders don’t have that second-by-second information. So you need something like technical analysis to enforce discipline in your position management.

Q What is the biggest mistake a trader can make?

A Excessive leverage is the thing that will get you in the end. Leverage can be beneficial. But people often only look at positives. They know it can increase profits, but they forget it has the same effect on losses.

Q What’s the most important lesson you’ve learnt as a trader?

A Don’t let your heart rule your head. It’s all about maintaining discipline. It’s probably wrong to say you should take emotion out of trading completely, but if you’re undisciplined, you put yourself in a position where you get stubborn about things. You make decisions when the market says something different.

Q Why are you looking forward to being part of Active Trader?

A There is a huge amount of information available for traders. You can YouTube yourself to death in your bedroom, and can find lots of people putting themselves forward as trading gurus. And there is a great deal you can learn from them. But it’s important to get that broad range of experience, and there’s no better opportunity of finding it than getting together with a group of like-minded people. You can never stop learning in our business. If you constantly put yourself in a position where you can glean skills and knowledge from other people, you can certainly improve your overall performance.

Paul Hayward is head of sales at OANDA. He will be speaking at this year’s City A.M. Active Trader conference this Friday at the Grange Hotel, Tower Bridge, London E1 8GP. Buy your ticket now for only £65 at cityam.com/activetrader or call 0203 201 8900

HOW TO BUY YOUR TICKET
City A.M. Active Trader, London’s best trading conference, takes place this Friday at the Grange Hotel, Tower Bridge. To see the full speaker line-up and to buy your ticket today for only £65, visit: cityam.com/activetrader or call: 0203 201 8900