Trading notes from Andrew Collins

Andrew2018
The market is remaining in risk off mode with a plethora of issues creating some serious headwinds at the moment. Next week’s vote on the Withdrawal Agreement is going to be pivotal for the UK market and from my perspective I hope it will start to open up slightly more in the way of trading opportunities. A lot depends on the outcome and at the moment looking at the share price action of the Brexit sensitive stocks the market is expecting a poor outcome. If in the unlikely event the WA is voted through it should mean a strong recovery into the year end for a lot of stocks that have been beaten up so badly in recent weeks. Conversely if the vote fails by a wide margin I would expect the market to attach a high probability to the idea of a hard Brexit which might well place stocks under even more pressure.
Finding any stock that provides reasonable trading opportunities at the moment is difficult given that so many are trending down in anticipation of a poor Brexit result. This isn’t going to remain the case and I will be trading again soon. I believe the market is not in the least positioned for a year end rally at the moment given the uncertainties that next week could bring. If we get a surprise and the WA wins through there should be plenty of time to buy into a number of stocks that will benefit. If as the market expects the vote does not go through and is voted down by a wide margin we might well get more selling pressure, but that could generate an over reaction in some stocks which are already pricing in a poor result and that is where a trading opportunity might also arise. Possibly the worst case from a trading perspective is the WA  loses by a small number of votes and that receives a muted market reaction and we end up in a similar situation to where we currently stand.
In terms of the stocks I am watching not much has changed. The likes of Experian and Compass Group are for me the premier stocks, but I need them around 4% to 5% lower than where they currently stand. SSE and Centrica have some trading merits at the moment, especially the latter. The beaten up Brexit stocks are numerous, but in the event of a positive result for the WA next week, Legal and General and Aviva are likely to be the top pick with Legal and General at the head of the list although Aviva has more upside if the Brexit uncertainty is removed in my view.

 

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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