Well, I said the FTSE could get to 5000, didn't I?
Can it hold these levels and consolidate higher? I think it's entirely possible. The technicals look good; we've rallied 40 – 50% from the March lows, and a lot of individual stocks (some of which I've been fortunate enough to hold since then) have done much better than that.
The last few weeks have been great for my favorite approach, ‘do nothing' trading. I don't mean literally do nothing, but I mean, get a position on, add to it, watch the momentum, and if it's looking decent, let it run.
Equity Long Have Worked Out Very Well
So that's precisely what I've been doing, and why I haven't blogged much, ‘cos I haven't changed a thing. You can look back at my blogs to see what I bought, and I'm still hanging on to most of it. Star trades include – long British Airways from 121, and added Aer Lingus recently from 0.50 EUR; long Quintain Estates and Development from 54p; and a whole bunch of auto and resources stocks including Inchcape, Ford, Aquarius Platinum. I sold and then bought back into BHP Billiton, big oilie BP and stuck with small oilie Afren and miner Anglo Pacific. Plus the ragbag of low-priced banks, retailers and small/mid-caps that I've been blogging about over the course of the year.
It's an awful lot of trades to have on the go at one time, (that's why I call my style a micro macro hedge fund), and one of the ways I control risk is by making sure I'm not running enormous position sizes. And on all the equity longs I've got stops in place now between 20% – 50% above the entry point, to protect my trading capital.
Some Mistakes On FX
It's not all been plain sailing though. (When is it ever?). I've royally messed up some currency trades, partly because I've been very busy at work and I haven't had time to monitor the trading closely. Because I've been away from the screen for hours at a time, I'd set some of the margins on the trades more wide than I'd normally do, with the result that I've blown up plenty of cash, particularly misreading the yen crosses.
