Trader Stories

		BIO: Stuart Harris is an English-born analyst and writer who helps businesses understand problems and spot opportunities that they're not seeing clearly. A multilinguist, Stuart has lived around the globe, following a career path that took him to countries such as France, Italy, Malaysia, and the Netherlands, before returning to the UK. Stuart worked in the '80s as a journalist with the Reuters News Agency covering general news and sports, and later specialized in financial markets. Moving into market research and advertising planning, he conducted projects throughout Europe, Latin America, West Africa and Asia for multinational clients. He currently provides trend spotting insight and market analysis, and is slated to co-author a book about online visionaries.
Name: Stuart Harris Location: UK Trading Since: 2003

How did you get started trading forex with OANDA? Stuart Harris: I started using OANDA back in '96 when we were moving to Malaysia from Holland. I looked for foreign currency rates and OANDA's currency converter came up at the top of the search.

In 2003 I wanted to hedge some currency risk when we were selling our house in Holland and moving to the UK. The Euro at the time was in good shape against the Pound, and I was looking around to see if there was a way that we could lock in at a decent rate. Commercially there wasn't an option (the banks were offering forward contracts with specific dates, but the risk was too high). I had worked in the financial markets as a reporter in London in the '80s, so I knew a little about market trading. I had considered online trading over the years but never got around to it. But this time I had a real business need.

I looked at various retail forex trading options. Since I was already familiar with OANDA, I started with its game to familiarize myself with the platform and the process before going live. It was quite daunting at first to play with real money—our own money. My wife was very unfamiliar with it, but I said, "Trust me," and she did. I figured out how much margin we would need to represent our exposure and went ahead.

Which currencies do you trade in? Stuart Harris: I must say I only trade EUR/GBP. That was my specific need at the beginning, and the currency pair I am familiar with. I don't do it full time, and I do it completely amateurishly. I don't use charts or anything like that. I do it kind of by 'gut feel' on a day-to-day basis.

Do you impose any technical barriers on your gut feelings? Stuart Harris: I am aware of interest rates and the global fundamentals. When there is a range of movement and as long as the currency is moving, then I'm in business. I study the range and price swings. I'm aware of what the high has been and what the low has been, and if it's tightened. That gives me the confidence to wing it.

It's kind of like a hobby for me, especially if one looks at my limited rate of return. I now have an entity trading account for my company using my company's money—it's a one-man limited company, I hasten to add. I'm pretty pleased with the rate of return. I was getting around 5% a week until I got hit with a margin call when I was away from the computer at the wrong time and the market moved sharply. I licked my wounds for a day, and then got back into trading and have averaged about 7% a week since. For a non-professional, that's pretty good going I think.

Do you remember your very first major trade? Stuart Harris: Depends on what you call major. I'm very aware that I'm a small player. That said, I am pretty sure it was taking a short position EUR/GBP at 0.7000 for 70,000 units.

Did such a large trade give you nightmares that first time? Stuart Harris: For a while I notched up some nice wins, but then the nightmare was seeing the market go against me. It took me a few times to realize I could just sit it out. The next thing to go wrong was when I started using stop losses. The market would hit the stop loss and then go back again. I only use manual trailing stops now.

The interface itself is sometimes a nightmare. Maybe a dozen times I have put in a trade, either a limit order or more usually a market order, and the splash screen has a default buy or sell. So I've put in a sell order when I meant it to be a buy or vice versa. On occasions I've lost 1000, 1500 Euros by putting an order on the wrong side. I think it's a design fault of the platform that can be improved. Anybody who has used the platform has probably made the same mistake at least once.

If you're not using stop losses directly, how do you remain disciplined? Stuart Harris: When it's a longer term trade, it's not by design. I aim to just grow my capital steadily. If I looked at the fundamentals, went through the trouble of learning the technicalities of trading, I'm pretty sure I would try to hold positions over several days or several weeks and take 200- or 300-pip positions. But what I've done by trial and error is to create a system that gives me solid gains over time. I'm probably getting 40–50% over the year, basically by day trading, which is not stellar by professional standards, but I am pretty pleased with it.

Do you feel the impulse to always have open trades? Stuart Harris: I usually have some trades open. I'm more likely to think that I can steal a few pips here, 4 or 5 pips there, so I trade every day that I can. One of my best runs was when I was on vacation. I wasn't supposed to be looking at the computer at all, but finally I hooked up an outside dial-up line to check my trades and for those two weeks, I couldn't put a foot wrong. It was really strange. I came away well ahead.

How do you react to the winning and losing streaks? Stuart Harris: One of the big challenges for me is to recognize when I'm tuned in and when I'm not. If I am not tuned in and I try to play anyway, nothing goes right. I just have to let it be and do something else.

I used to take the losing streaks very badly. I remember one time when I was still very green at it. There was a big celebration one Christmas and I wanted to go, but I got into a position where the market had gone against me. I decided to close the position and take the hit. That just ruined my evening and I felt even worse a couple of days later when the market reversed completely. If I had held onto the position and just relaxed, I would have made Euros on it.

Gradually I've learned that sooner or later with EUR/GBP the market will come back eventually, so I've taken the view that I'll wait. Obviously there's the risk that it will go so far against me that I'll get a margin call, but I try to be careful not to let that happen. For me, it's worth the wait, at least for EUR/GBP. I don't think I could wait out Cable because it could go so far against me, I could get absolutely burned.

If you don't exit your losing positions, how would you describe your level of discipline? Stuart Harris: It depends what you mean by discipline. As far as I'm concerned, I'm just holding my nerve. It's really important to remain detached from it. I put all of my trading figures into spreadsheets daily, sometimes hourly. A big killing would be nice, of course, but what I'm really after is steady growth for my capital.

What's your leverage? Stuart Harris: I tend to use 20 to 1. However, I've been experimenting with 30 to 1, which I find works fine.

Have you had many margin calls? Stuart Harris: I had one just a couple of weeks ago, which cost me all of the profit I had made over two months and a little of the capital. That's the only "real" margin call I've had.

I did have a false market call about a year ago. The system closed me out and knocked off 6000 EUR for no reason. I called OANDA and they recognized that there was a blip in their system and reinstated my positions. I thought that was tremendously impressive. I have a sense that OANDA has a desire to play fair and to look after their customers.

Where do you get your market news? Stuart Harris: I used to read market commentary every day, but to be honest, it didn't make a difference. Of course you need to be aware of big changes like monthly policy committees, economic numbers, all that kind of stuff. However, I remember working in the financial futures exchange when everybody would be ultra tense because the housing starts numbers were coming out or the NFP was due. It would be 10 minutes of utter mayhem, screaming and shouting, blood all over the market, and at the end of it all prices would be the same as they were before. Maybe the numbers don't matter so much. If there was some sort of magic formula, wouldn't everybody be doing it?

Do you have any comments on the FXTrade platform? Stuart Harris: I must say that the Java code running the platform over the internet is a bit of a pain. I'm used to it, but it can go a bit blippy. For example, if I try to log in as another user and transfer funds, it takes me to the original account and not the account I switched to. I played with a platform recently from another trader and it was sweet because it behaved more like a piece of software. With OANDA, I can't copy and paste my numbers and put them into my spreadsheets as far as I know, so I have to type them in. I'm not complaining and I'm not going to stop using OANDA because it uses Java code, but it can be a bit of a pain.

What about having easy internet access all over the world without downloading all that software? Stuart Harris: You are absolutely right. I access FXTrade from multiple computers at home and kind of take that for granted. All that's required is for the computer to be fully Java enabled.

Anything else about the FXTrade platform or OANDA? Stuart Harris: I like the FXTrade platform. I'm seeing lots of little improvements that make life easy for me. I have no complaints apart from the odd interface glitch. And you're responsive. Obviously people are listening because improvements are always being made to the platform.

Unless you really screw up big time, you have me locked in. The spreads have narrowed mostly. I like the new cash management interface—it's a lot easier to add funds and transfer funds than it used to be. I really like the real-time chat window—there is somebody there within a minute or so. I would say in my experience OANDA's customer service is really outstanding, and that makes a huge difference.

Other trading platforms call me up, ask me to try their platform, and they're very, very pushy. They send me a demo of their platform, but when I look at it, their spreads are wide, their minimum deposit is high, and it just doesn't have that feel. I have a huge and growing sense of trust in OANDA. Nobody is bugging me to do anything more, to invest more, to try different things. It's not at all pushy. I don't know how that is for growing your business, but as a customer it gives me great confidence. As you know, in the financial market trust is everything. It's the easiest thing in the world for someone to just take your money and run. When people ask me, I recommend you with confidence.