July 8, 2010
My Most Profitable Week Ever
I just thought I'd post a quick trading update today because it's been a very exciting few days and I now have some spare time having closed virtually all of my positions earlier today. As I predicted a few weeks ago, I haven't been trading forex at all whilst the World Cup (and Wimbledon) has been on, and have been concentrating on my stock trading instead, and boy am I glad I did. It's been my most profitable week ever and it's more than paid for my upcoming 6 week holiday in Thailand.
Whilst all the 'experts' were waffling on about death crosses on the major indices and people like John Piper were saying that the FTSE's heading for 1500 (which is one of the funniest things I've ever heard), I was busy buying shares and opening some sizeable long positions. This was because my indicators were telling me that both the indices and the individual stocks and sectors within these indices were massively oversold. Plus on a fundamental basis many of the leading stocks were now looking very cheap.
My biggest positions were on Barclays and Lloyds because I'd bought shares in these two banks and taken several long positions every time they fell to an attractive level. I was looking to sell/close out the lot at 300p and 60p respectively, but thought it would take weeks to reach this level. However all of my limit orders were triggered shortly after the market opened this morning and to cap it all off, I even got a slightly better price on Lloyds because it opened at 60.86p.
Apart from the banks I also had long positions in Tesco, Unilever and Royal Dutch Shell, and they've all been closed out for a decent profit. I also had a long-standing investment in JKX Oil which was closed out this morning at 266p for another healthy profit. Plus I bought shares in ISF, a FTSE 100 tracker, when the FTSE was around 4850 and that was automatically closed out yesterday when the FTSE hit the 5000 level. The only position that didn't work out was on Aquarius Platinum, but after they reported that a fatal accident had occurred I decided to close out for a 4 point loss.
Overall though it's been a fantastic week and I'm now in the strange and very rare position of having no spread betting positions open and being around 85% in cash. The only stock I hold at the moment is Public Services Properties Investments (PSPI), which is an AIM-listed property company that pays a dividend of nearly 10% per year, but this is very much a long-term investment.
I'm not sure where the FTSE's heading from here. It could potentially move up to 5400 or 5500 if more money continues to be ploughed into the markets, but I think it's more likely to head back down below 5000, and possibly as low as 4600 in the next few months. I personally won't be buying any stocks or going long at these kind of levels as it's far too risky, but if it falls back to the 4800's I shall be re-entering the markets once more.
Trading stocks and forex can be a lonely and depressing job at times, but on weeks like this I think it's the best job in the world.
Talking of forex, I have still been keeping an eye on the major currency pairs but to be honest I haven't seen any decent trading opportunities recently. The GBP/USD and EUR/USD pairs have now turned bullish on the daily charts (signified by the Supertrend indicator turning green) so I will only be looking to go long on the 4 hour chart from now on. However I'm looking for a decent sized pull-back on either one of them first of all before I would be confident after going long as they're both looking a bit toppy (is that a word?) at the moment.
Anyway I've waffled on long enough. I'll try and write a few more blog posts before my holiday and will be in touch soon.