Good morning. I managed to get a trade away and closed yesterday in Legal and General. The shares have been well supported and looked in a good position to benefit from any bounce in the market which we had yesterday. The shares are rallying again today along with the financials after comments from Dominic Raab that a Brexit deal is not far away.It is rare to get back to back rises of +2% in the Legal and General share price and the shares are now at a level where there is limited upside unless the market continues to rally. My feeling is we might yet have another sell off or two which could bring them back onto my radar. I am not yet convinced the market is ready to begin a year end rally, we could be a few weeks away from that and it might well be a more muted one given the current negative newsflow and bond market activity. We also have to contend with a likely Fed rate hike in December which could well leave the market more nervous than usual as we head into the year end.
I believe the utilities might be a more interesting area for trades over the coming weeks and I still have a close eye on Centrica along with United Utilities, SSE and Severn Trent. The share prices of all of these companies have been beaten up following the rise in bond yields and the potential for political interference if a Labour government comes to power. The downside looks limited to me unless there is a snap election and they all seem to be settling into more range bound trading.
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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