The market at the moment is stuck firmly around the 7,000 level and this might well remain the case until we get to see if Brexit is going to make it through Parliament. The price action of the stocks I am following is not providing any clear signals and looking at the broader market it does feel as if there is more downside risk than upside at the moment. I keep looking at the US markets and with the trajectory of their monetary policy and the headwinds valuations now face, there is to my mind limited upside from here and I can’t help but feel we are in for a more prolonged period of range bound trading.
Compass Group have reported this morning with numbers that are broadly in line and more importantly they have reiterated their guidance for the next year. The shares are up by nearly +3%, but I would expect them to settle back to their recent range over the coming days unless the broader market finds reason to pick up again. We had a similar situation with Experian which has given back its post results gains. Compass Group is a great company that has lots of room to continue delivering good organic growth and it’s companies like this that are worth watching if the market does suddenly sell off again providing an opportunity to buy at a good price.
I am happy for now to continue waiting for a better trading signal in one of my stocks. Another sell off would make things more interesting, but I fear that for now we are likely to remain stuck at current levels.
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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