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.
Indiana Brown And The Lost Economy
After sorting out interest rates and the UK mortgage crisis, trouble-shooter Gordon Brown is off to tell US banks to ‘fess up to their losses. Also visiting the land of the free is the Pope, whose aim is to see Bush, and bash the bishops. Who’s going to have the most fun there then?
Over to the markets where oil and EURUSD reached new highs and equities put their worries behind them to push on once again.
I stuck with the winning formula of trading EURUSD again today, but this time selling the Dollar. Early trade had taken the price back above $1.58, but breaking $1.5850 seemed to be too much trouble. I reckoned the key to the next move would be European inflation, due out at 10 o’clock.
The break of resistance ahead of the numbers smacked of a leak (not for the first time), why else would you take the risk? Sure enough, the numbers were stronger than expected (3.6% annual) and that was good enough for me. I placed a £10 spread bet to buy at $1.5875; my stop was well down at $1.5820 to avoid any early volatility.
Check out the chart, this one moved like the Dewsbury Moor clan on benefits day. I jumped the gun, closing off £5 for my customary £50 profit, but in volatile trading I like to lock a small profit away. I didn’t bring my stop up to break-even straight away, preferring to wait for a small correction and subsequent rally.
Further profits came at $1.5891 and ‘96; this seemed reasonable as the $1.59 big figure could have been a major stumbling block. It wasn’t; it put up as much of an obstacle as UK immigration officials, allowing the Euro to surge ahead. I sold further £1 bets at $1.5939 and $1.5950 before eventually being stopped out at $1.5925. Total profit on the trade was a heart-warming £276.
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When I was a bond fund manager I could never fathom out the thought process of equity investors. They seemed to be eternal optimists; there was always a reason the buy the market. And there’s been a bit of that again today.
Admittedly corporate results today were generally better than downgraded expectations, but reaction to the US economic numbers went something like this:
CPI 4.0% annual. Pleased the market because it was bang on the forecast
Housing Starts 947,000, -11.9%, lower than expected and weakest in 17 years. Good for the market as this improves the chances of further cuts in interest rates
Industrial Production +0.3%. Much better than the forecast of -0.1%, should see the market higher.
Give me strength. The wind’s too strong at the moment. I’ll let it run its course and stay at the forex table for a while longer. Back in the UK, banks are the big performers today, shrugging off fears of job losses, rising inflation and falling house prices; to me they’re placing far too much faith in Indiana Brown and the Lost Economy.
Happy Trading
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