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Recent Posts by Stuart McPhee

Your #1 Trading Goal

The bottom line is that money management will make or break you as a trader. This is a widely accepted fact.  Proper money management rules have been proven over long periods of time and are not secrets to anyone. The rules of ‘keeping your trades small’ and ‘cutting losses’ for example, have worked for hundreds of years, yet many people ignore them. 

No matter what aims you may identify when first determining what you are setting out to achieve with your trading, all aims are secondary to your primary goal — preserving your trading capital. This is by far the most important aspect of successful trading. Simply stated, you need capital to trade.

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Timing is Everything

I believe one of the most often overlooked yet simple decision to make when developing your trading plan is the timing.  What will your trading style be like and what type of trends will you look to trade?

I also believe this is critical as trying to trade a wide range of trading styles and time frames at the same time, becomes counter-productive.  It makes it difficult for the trader to focus on one approach and master that approach. 

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Gaining an Edge

There are numerous scientific studies alleging that forecasting market movements is practically impossible. In 2013, Eugene Fama, Lars Peter Hansen and Robert Shiller got the Nobel Prize in Economic Sciences for a study that questioned our abilities to accurately forecast short-term asset price changes.  This raises the question of how traders can gain an edge in the market and consistently profit. 

I personally use technical analysis (the study of price action) to identify trading opportunities.  I think it is important to distinguish what we are doing as traders - as a technical analyst however, at no time do I attempt to forecast – I think this should be left to economists

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Themes to Watch in 2019

Themes to watch in 2019: Mixed Bag in Asia, What Next for the Fed? Deal or No Deal? Critical Times for Britain

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Introduction to the Candlestick Pattern – Marubozu

Technical analysis is the study of actual movements in the price of a financial product.  However in my opinion, technical analysis is less about trading and more about the study of mass psychology.  We study the way people react in certain situations in the market, which is quite prevalent when identifying and trading using chart patterns. 

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Developing Your Trading Strategy

One of the most common questions I am asked is how you can develop a trading strategy to use in the foreign exchange markets.  Like trading any product, there is a time-tested process to work through to develop a trading strategy or plan that you will be able to implement with confidence.  As simple as it sounds, you need to work out what will and won’t work in the market as you look to develop some trading rules. 

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One of My Favourite Candlestick Patterns – the Doji

Technical analysis is the study of actual movements in the price of a financial product.  However in my opinion, technical analysis is less about trading and more about the study of mass psychology.  We study the way people react in certain situations in the market, which is quite prevalent when identifying and trading using chart patterns.

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Trading Forex with Consistency is Underrated

Determining precisely when to initiate a trade may be one of the most difficult decisions foreign exchange (forex) investors face. It is what is referred to as the entry signal and figuring out a consistent way of entering and exiting a position is an extremely important trait for all traders to have.

I believe that most people trade forex randomly, indiscriminately, and without any process or methodology. These people will stare at a chart to see if something jumps out at them. Even if they must stare at it for a few minutes, they will keep on looking until they find something

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Let Data Drive Your Trading Decisions Further

Businesses around the world invest heavily in analytics and Business Intelligence (BI) to feed decision makers critical data to help with making decisions on the company’s future.  In fact, people and organisations have never had access to more information in history.

I believe data driven decisions also has a place in trading.

Trading is best done when it is considered as a process – a rules based activity.  As you would have heard countless times, if you want to trade successfully, you need to develop and then follow a written trading plan that suits your personality.  

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Managing Risks and Rewards

An important reason why many people fail in the markets is that they do not employ sound money management methods.  This is for a whole host of reasons and often because they get too emotionally involved.

When people are trading with their own money, it is close to impossible to not become emotionally involved at some stage.

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