Good morning. The current constitutional crisis is making trade selection very difficult at the moment and it is a little too easy to end up on the wrong side of a trade as new information continues to emerge and impact on valuations. Where the country is heading with Brexit is going to have a major impact on some stock valuations. With the odds seemingly increasing of a no deal Brexit the market is going to struggle to make any headway with more downside risk if we do end up crashing out. There are of course the overseas earners that will benefit from a weak pound, but we have already seen plenty of upside in those and they are not without risk if the UK does find a route to a deal and the pound starts to surge.The utilities lost a lot of ground yesterday over fears of a snap election and the arrival of a Labour government along with the decision by the European Court of Justice to suspend the UK capacity market which impacted on the generators.
My trading list has dwindled somewhat until we get some stability. After the strong numbers from Experian this week I like the shares and if they continue to trade around the £18 £18.50 mark I can see potential trades here. Centrica report on the 22nd and I am still interested in a trade here if the numbers please the market. SSE reported earlier in the week which pushed the shares all the way to £12 and they have subsequently come all the way back to £11.30 after the ECJ announcement yesterday. I am still interested in SSE and will be watching them closely over the coming days. Compass Group report on the 20th and I am hoping to return this one to my trade list after the numbers. Legal and General are back where I would be buying if it were not for the Brexit factor and I think for now I will wait to see what happens over the weekend. I am also watching Imperial Brands and despite the official announcement from the FDA over their intended ban on Menthol cigarettes the shares have been relatively resilient which I feel reflect the very cheap valuation. There are in fact several stocks that ordinarily I would have traded, but for now I’ll see what the next developments are in the Brexit drama that is unfolding.
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.
Trading Futures, Equity CFDs, Options, Forex Exchange and Spread Betting involves the use of leverage and carries a high level of risk to your capital, and is not suitable for all investors. Only speculate with money you can afford to lose. Trading or placing any bets can result in consumers incurring liabilities in excess of their initial stake. Please ensure you fully understand the risks, and seek independent advice if necessary. You must be aware of the risks and be willing to accept them before commencing trading. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to Buy or Sell any investments. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. Please be aware that hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown or discussed on this site.
Trading Futures, Equity CFDs, Options, Forex Exchange and Spread Betting may not be suitable for everyone. All speculative trading involves substantial risk as well as a potential for profit. In order to trade successfully you must be financially and psychologically prepared to accept losses. Only risk capital, that is, money you can afford to lose, should be used. The risks associated with trading Futures, Equity CFDs, Options, Forex Exchange and Spread Betting are substantial. A stop loss may not limit your losses to the amount intended. In fact, you may sustain a total loss of the initial margin funds and any additional funds that you deposit with your broker to establish or maintain a position in the stock index futures market. If the market moves against your position, you may be called upon by your broker to deposit a substantial amount of additional margin funds, on short notice, in order to maintain your position. If you do not provide the required funds within the prescribed time, your position may be liquidated at a loss, and you will be liable for any resulting deficit in your account. This brief statement cannot, of course, disclose all the risks and other significant aspects of the stock index futures markets. You should therefore carefully study Trading Futures, Equity CFDs, Options, Forex Exchange and Spread Betting before you trade.