I am not posting much at the moment simply because not a lot has changed and despite the relative stability of the market the downside risks remain, at least until we get past the Brexit vote when hopefully a path other than a hard Brexit will be found. There are lots of good stocks that have been hit very hard and until there is some clarity on this issue it is difficult to see any meaningful recovery in their share prices. However, if we do get a satisfactory resolution there should be plenty of time to buy into one of these stocks and take advantage of a relief rally and possibly also an end of year rally in the broader market. There are always trades around, but from my perspective they are all low conviction at the moment and it has been easier to sit on my hands. I expect that will change soon. A lot of companies have reported and in terms of ticking the boxes at the moment only two have ticked all of them and they are Compass Group and Experian. Both have benefited from a post results bounce and neither has given back much ground, but any broad based sell off could bring them back onto the radar. Aside from that SSE has ticked some of the boxes, but the shares are trading towards their lows and the share price action isn’t great, but I believe supported by the yield. Centrica is in the same place having disappointed the market with its numbers recently. The share price action in Legal and General has been quite good and they have held up relatively well despite the Brexit threat and this is one I will be continuing to monitor as we approach the Brexit vote. Overall, not the most exciting of markets to trade into, but that is likely to change during the last two weeks of December. I hope to get a bit more active soon!
TRADING BIO: I have been a professional money manager in London for over 25 years and trading my own funds simultaneously. Unlike many popular traders, I have a very different approach to my trading and focus almost solely on risk management and fund longevity. Another difference is that I don’t trade indices, forex, commodities or glamour stocks. My focus is on cyclical UK FTSE 100 blue chips where the leverage of CFDs and spreadbets allows you to take advantage of the more predictable and staid price action. Trade volumes are low so as to minimise costs paid away to the market, often a significant drain on performance for a trading portfolio. At any one time I may be studying around a dozen such equities but unlikely to be holding more than one position I don’t profess to get it right every time as markets and information changes which can cause movements that you simply cannot predict. What I try to do is manage my risk with small enough position sizes which also provides the potential to diversify when conditions are right to do so. I keep strict stop losses to avoid damaging my account when positions go wrong. It is much better to get stopped out and revisit the position than continue holding and hoping! I like the concept of true copy trading as it allows Followers to see the true activity of a trader’s account and make honest and accurate decisions. By taking a lower risk approach and trading in modest sizes my intent is for any Follower to be able to use their ‘multiplier’ to gear up my trade sizes if they personally wish to scale up the trades in search of higher returns.
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