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.
End Of The Monkey Business
It feels like I’ve missed more sitters than Peter Crouch today. I’ve written off today as a silly quarter-end with some dodgy moves, but taking my eye off the ball cost me missed opportunities in FTSE and the Euro.
I’ve been bleating on about the run up to this quarter-end for a few days now. If you missed it, or fell asleep, I’ve been suspicious of the FTSE rally going into today. I explained that, although to you and me it’s just another day, the quarter-end is more meaningful to the big boys in fund management outfits.
Crucially, a lot of these big boys charge their fees, based on a percentage of the funds under management, at the end of a quarter; unsurprisingly these guys want prices as high as possible to bring the readies in. They’re also aware that reports and valuations from today will highlight any possible breaches and could lead to awkward questions.
As a brief example, a fund manager might be told that he can only hold 5% of the fund in cash. But being a free spirit, and wanting to do the best for his client, he might have ‘overlooked’ the rising cash balance from dividends and a few sales, allowing cash to rise to 8%. His actions might have benefited the client during the period of falling prices, but he doesn’t need the aggravation of justifying this to a room of jobsworths.So he invests the spare cash to comply with the rules. I reckon there’s been a bit of this monkey business over the past week.
In my fund management days, when I never did any of the above, there were a whole range of valuation points; these included 10 and 12 o’clock for some funds and unit trusts and the 4.30pm close for client funds. This might explain this morning’s rally in FTSE. The other point is that prices don’t always reverse immediately, so I’ll be watching rather than charging in wearing my bearskin.
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As well as the FTSE’s Viagra rally from the opening levels, check out the Euro today. Providing more ammunition for the European Central Bank to sit on rates, Eurozone inflation leapt to a 3.5% annual rate. Now to me that’s pretty close to 1.5 above the “2% or below” that the ECB is tasked with; would they dare to raise rates?
The inflation data helped EURGBP to a new high of £0.7982 and gave an adrenalin shot to a tiring EURUSD rate, helping it back up to $1.5896.
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I’ve just placed a £3 spreadbet to sell Alliance & Leicester at 518.11. It looks a bit like traders are getting bored with the takeover story and I’d been watching for it to break support at 520p. It’s not a high conviction trade, and with the risk of the Bank of England announcing more help for the banks I’m keeping the size small. Going into the close I’ve stuck a stop out of harm’s way at 540p.
Happy Trading
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