FT has been trading full time from home for two years, with nothing but four kids and a beach to distract him .
He fills his spare time with weight training and rugby, though more coaching than playing these days.
FT mostly trades the forex markets and although he plays FTSE on occasions his bread and butter market is £$.
He likes to think that his technique is evolving but still hasn’t the temperament or money to back the big calls. He prefers to trade between 1 and 3 times a day, aiming to take regular small gains, but feels part of the evolution is in not dealing if the conditions don’t feel right.
Giving A Bit Back
Perhaps I should have taken more notice of the headlines this morning before trading; I sold EURGBP, looking for a quick correction, but missed out by a few pips. Instead of earning my beer money I ended up giving away £240, and that always hurts on a Friday.
The UK economy is looking as gloomy as the weather. Here’s a snapshot:
Nationwide house prices fell 0.6% on the month; the 1.1% annual rise is the lowest in 12 years.
The GFK Consumer Confidence number was the lowest in 15 years.
UK banks are fighting to avoid new mortgage business; yesterday the Nationwide raised the cost of its 2-year mortgage to 7.1%. With official rates expected to fall to 5% in April, just how mean is that?
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Sterling was thumped in early trade, on the back of the bigger than expected fall in house prices. The EURGBP hit a record high of £0.7915 and GBPUSD fell to $1.9930. As the EURGBP dropped back below the £0.79 figure I reckoned it ought to continue down to test support at £0.7860.
I was only after a quick turn so I placed a £10 sell bet at £0.7896 with a limit order to close out 10-pips lower. As a precaution I placed my stop at £0.7920, 5 pips above the record high.
The trade looked to be working; the price was slowly trending down and reached £0.7887 bid just before the UK GDP data. Then I took a right hook to the head, followed by a nasty uppercut.
Although the GDP number for the quarter was in line at 0.6%, the annual rate came in slightly lower at 2.8%. This saw Sterling lose its bid, followed swiftly by a member of the European Central Bank emphasising that they’ll raise rates if needed to curb inflation. This wasn’t new news, but it was a useful shot of Nandrolone to an already perky market.
My stop was triggered at £0.7920, leaving a £240 hole in my back pocket. My mate, Harry Hindsight, pointed out the bullish flag pattern and reckoned I should have tightened my stop loss to just above the breakout point, and he’s probably right. But there you go, part of trading is taking the losses and I’m still up on the week.
I haven’t seen the PaddyPower odds on this Parliamentary Handicap Hurdles race, but I reckon Gordon Brown on the far left will win. He’s refused an open contest and has insisted that he’s declared the winner.
Happy Trading
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March 28th, 2008 at 1:31 pm
So, after 5 months of falling house prices, Nationwide has finally come clean and admitted that it does actually expect house prices to fall this year. With even the most vested interests jumping on the bandwagon, the gloom really is spreading.
Interesting trade on EURGBP, risking £240 for a potential reward of £100. Just the tap water for you this weekend, then. Enjoy!
March 28th, 2008 at 3:11 pm
Here’s a new one. Opened a short on Signet at a smidgen under 60p. It’s in a long-term downtrend in the downbeaten General Retailers and is rapidly retreating from its most recent lower high.
Looking for it to drop back down through its falling 20MA around 55 then on to a new lower low below 50. Initial stop just above the recent high at 65.
March 28th, 2008 at 8:06 pm
Evening ken.
Can see the sense in that trade, given margin pressure and falling sales; though somewhat intrigued by recent price action on what appears to be little ‘new’ news. Figures I think due on or around 9 April.
Some analysts are bulling the ‘turnaround’ story (is that the ‘turnaround and the CEO has left the building’) and the latest encumbent to enter the rapidly revolving door is kicking off by shutting quite a few US stores. Last set of figs in Jan poor, US dreadful, UK trading OK. Not sure if there is a merger (Zales?) or potential property angle here.
My trusty tweaked MACD has given several long (25 Jul 07, 10 & 26 Sep, 14 Jan & most recently, 19 Mar) signals, all against the overall trend and with mixed success. Less good on the short signals, (24 Jan, 5 Feb and I suspect one today)!
Personally I prefer the other SIG (Sheffield Insulations Group-or am i giving away my age!) ric=SHI, as a builders merchanty/construction related stock currently on its knees, but which I think is ‘base-building’ (yep you have to get out the longer terrm chart!) but I know your views on housebuilders/banks/consumer facing stocks!
Really want to see it through 900 to’invest’ rather than ‘trade’-though not a bad ‘trading range’ stock either recently.
March 31st, 2008 at 7:58 am
Hey GG, SIG does look interesting. The volume has dried up in the last few days, just as it’s done when it reached this level in recent months. So with buyers jumping ship, we could well see it go round the 750-850 trading roundabout one more time. I may short it if it goes back to 850 today or tomorrow, which fits with my bearish sentiment in general and in this sector in particular.
An upside breakout also looks interesting with potential for a run up to 1000-ish. It’s carrying a bit too much debt for my conservative tastes but not enough to be a showstopper on its own. So, 900 seems like a good trigger this way.
March 31st, 2008 at 8:10 am
Morning guys,
back from a weekend in sunny sunny devon. Great weekend all round with under 10s picking up the trophy in the local rugby tournament. You’re right Ken, every so often I drop my guard on the risk/reward ratio. Sometimes it works, sometimes I get a slap for it. I’ll leave you and GG to mull over obscure backstreet smaller equities. Meanwhile short FTSE, long Friends Prov is paying off today. I’ll have a look at Barclays once I’ve woken up and gone through a few e-mails.