Trading notes from Andrew Collins


 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.
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