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.
Better Than Waking Up To Kylie
I could hardly have asked for a better start to the day, although waking up to Kylie singing, “You’ve just been so lucky. Lucky, lucky, lucky,” would have been pretty damn good.
I must have been sniffing my marker pens too much on Friday because I deliberately ran several bets over the weekend. In Friday’s blog (Always Look On The Bright Side Of Life) I mentioned that, in addition to my scrappy short in Barclays, I’d opened a small short in Alliance & Leicester.
Not long after that I was attracted to one of my favourites, the EURUSD trade. Throughout the day it had suffered some serious GBH, but by late afternoon its attackers had lost interest. I hadn’t; at first I was only looking for a cheeky in and out to pay for some weekend Guinness, but it’s ended up being one of my star deals of the year.
Check out the chart; the price stopped falling and looked to be queuing up to bash through $1.5750. Now technically I jumped the gun, buying £10 at $1.5745 when I should have waited for the price to break, and remain above $1.5750. But this was a ‘He Who Dares…’ moment; I was prepared to risk some of my earlier profits to get in early on the trade. Using Fibonacci’s bonking bunnies I reckoned I could get 30-40 pips out of the trade and go into the weekend as happy as Larry.
The reaction to the break of resistance justified my early move. I was soon able to close half my bet at $1.5771, bringing my stop up to $1.5746 and locking in £130. And this was where the marker pens came in; I reckoned there was still plenty of life left in the old Euro dog and decided to run my remaining £5 bet over the weekend. I hardly ever do that, with good reason, but on this occasion the television match official gave the try.
This morning’s early price came in at $1.5830 and though it dropped to test support at $1.58 my stop remained intact. It seemed rude not to take some profits so I closed out bets at $1.5835, $1.5855 and $1.5863. Running a more discreet stop loss worked this time; as I’d already made a profit I was more relaxed about trailing a greater distance from the market.
Feeling confident enough to take a rare lunchbreak I brought my stop up to $1.5855 and left a limit order to sell £1 at $1.5945. Bingo! On the money again. I lost £1 at 1.5945 and am left with a £1 bet at $1.5936, protected by a stop loss at $1.5885. The trade has netted me a jackpot of £648, plus a further £140 on my remaining bet at the stop loss level.
Of course it’s not better than waking up to Kylie, but it’s easier to explain to the missus.
April 22nd, 2008 at 7:41 am
Nice one, take the rest of the week off. And you must be quids in on the A&L short, with more to come I suspect as the realization that the great baking shareholder dilution of 2008 is just kicking off.
It’s all a bit directionless and uninspirational at the moment, maybe currencies are the place to be. But I did go short of the May 6200 calls at 53, so the smart money should be going on a big FTSE surge over the next few days
April 22nd, 2008 at 7:44 am
D’oh. Not baking, banking shareholder dilution. What a waker.
April 22nd, 2008 at 8:18 am
Morning Ken,
yeah, the aim of the week is not to p*ss away all my early profits. A&L doing quietly OK, though seems better supported at the moment; Barclays short is doing OK as well. But they’re only small scale as i’m still on an equity learning curve.
On the May calls your balls are made of better quality steel than mine; I’ve sold 6375s, 6400s and 6425s, all for between 10-12p. So far there’s a lack of balance as I can’t bring myself to write puts up here. Wrote a token scrap of 5450s last week, but I wouldn’t want much size at that level.
Waiting for a sign from above to sell FTSE properly, but am trying to stay patient. Popping across to the forex side helps resist ‘boredom’ trading.
April 22nd, 2008 at 8:20 am
Having said all that, 5 Weetabix and a phone call about rugby saw me miss the turnaround in €$ just now.Doh!
April 22nd, 2008 at 8:51 am
Got a sign from above (the sun came out) so dipped a tentative toe in the ’sell’ end of the FTSE pool.
April 22nd, 2008 at 9:47 am
And I’ve got a very high voice too; gonads the size of a peanut here-
just short a scrap of some May 6350 Calls for 16, probably balanced off with some 5600 Puts for 17
Squeak!
April 22nd, 2008 at 9:50 am
As for baking surely the amount of ‘dough rises’ as the rights issues come thick & fast
Do I hear $35bn?
April 22nd, 2008 at 12:10 pm
FTSE put country really is a scary place. It’s easy to see us being 500 points down in the next 3 weeks. Can’t see the same on the upside (now I really am asking for it).
Sorely tempted to go for a FTSE short spreadbet, as that’s where I think the big money lies. But then I want to go increasingly long if the index goes over 6100, in order to protect my reproductive gear as FTSE climbs to put my options in the money.
Dither, dither, dither.
Still can’t figure out how the recent RBS rumours and now announcement is good news. £12bn recapitalisation with 11 for 18 dilution, both at the top end of expectations. Plus asset sales and more write offs. And nobody seems to have mentioned the divi — no way RBS is going to be paying out 10% on all those new shares. Yet RBS is about 20% up on its recent lows.
As for Gordon and Al’s £50bn bail-out, what a flop. Abbey has knocked a token 0.1% of a select few of its deals, while completely withdrawing their fixes and buy-to-lets. And, the Government’s very own bank, Gordon Rock, is showing real leadership by lopping 0.1% off its SVR — that’s the rate that it’s telling its own customers is uncompetitive and can be bettered elsewhere. What a shambles.
April 22nd, 2008 at 12:40 pm
Seems to be a classic case of the old saying, attributed to, amongst others, Galbraith, Buffet and David Beckham, “the market can make as much sense as a group of women with pmt for longer than your account, and testicles, can take the pain.” Still feels like it wants to go up, but I’m sure that’s because I’m a bit short. If I was long I’d be concerned that it wasn’t reaching last week’s highs and it had the risk of investors waking up and smelling the coffee.Fixed rate mortgages still rising and, perversely, so is the cost of long-term debt. More gilts equals higher yields equals a new problem.Over to you Gordon.
April 22nd, 2008 at 12:58 pm
Couple of obs on Royal Bank of Shambles
The rights issue and disposals get Tier 1 ratio to 6.5%-back in line with the Euro average. And at least they are first in the queue-step forward BARC, HBOS, A&L etc etc.
Part of the dividend becomes scrip, and on forecasts I have seen (ex rights) of 40-43p of eps and a payout ratio of 45% you get a divi of about 18p-which would equate to a yield of about 5.6%.
My question (any answers gratefully rec’d) is where is the dosh going to come from to pay for £30+bn of potential rights issues?
Sure some might come out of wonga that has been temporarily dumped in short term bonds, but I suspect that parts of the equity market might see some weakness (?resources, engineers?) as cash calls come through. Though the banks have juust paid out quite a wodge in divis!
Banks 14% of FTAS, Oils 16%, Miners 11% ? Sell top performing sectors to buy into underperformers?
Dilema between market having to absob these cash calls (so short) and a potential rally in the banks sector -once people have bitten the bullet. Either way I think my 6700 call looks safe for a while (cue huge rally!)
I personally would be nervous on HBOS/BARC as I don’t think they have written down Alt A/RMBS /Commercial Mortgage portfolios to anything like the levels RBS has today (if at all at HBOS)
Alt A 83p in the £ down to 50p
RMBS 72p in the £ down to 38p and a few others too.