I have completed another trade this morning, this time in Vodafone. I did try to run the profit but was stopped out albeit at a profit first thing this morning. I will always try to run a profit once a position is showing one by raising the stop level and sometimes it can pay big dividends and in others you simply give back a bit of the profit and end up hitting the raised stop. I will certainly look to buy back into Vodafone if the shares slip back below the £1.40 level. To my mind they now more than discount a dividend cut which seems to be the market’s major worry. The other stock that I am watching closely is Centrica who report on Thursday.
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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