Trading U.K stock market using Mark Minervini strategy

-->

14th Dec '18 by unwise2

1516 comments 109004 reads

Mark has been interviewed by Stocko a couple of times and from some of the comments on various threads there appears to be a few of us using his methods to trade the U.K stock market. I thought it would be useful to have a dedicated thread where we can discuss how well its working.

Personally I have been in cash at least 50% since the end of May and at 95-100% since early October. Getting out of stocks as they roll over has protected me from any real damage.

I'm struggling to find many setups I want to buy so I am developing my "sit out power"

How is everyone else doing?

Unlock with Email

Unlock with Google

Already have an account?
Login here

About the Author

Unwise2

Premium Member

1516 comments

unwise2

4th Feb '19

I appreciate transaction costs are an important part of trading but this thread is about trading in the U.K.

Discussion about the cheapest way to trade U.S stocks inside/outside an ISA or spreadbetting could be moved to a new thread with an appropriate title, that is useful information that isn't going to be found by other Stocko readers when it's put on a thread with the title of this one.

Sorry to sound like the Grinch/Scrooge but I see way too many discussions drift way off course.

Rusty2

4th Feb '19

I think the point is it maybe alright for Minervini to do multiple trades a day on the amounts he trades but in the UK your transaction costs, stamp duty and the wider spreads will eat away at your profits. One reason why I generally exclude shares with wide spreads. I did look at Ab Dynamics (LON:ABDP) a few weeks ago but the actual spread then was 100p, on a price around 1500, so that's nearly 7%.

unwise2

4th Feb '19

I agree spreads can be a problem in the U.K, but they aren't always as bad as they appear, right now Ab Dynamics (LON:ABDP) is showing 1550/1600 bid/ask but in the last hour I can see a sell at 1552 and buys at 1578 on my L2 feed. A circa 1.7% spread isn't great but it's not terrible either.

Rusty2

4th Feb '19

But that is the problem, may come come down to 3% but if there is some bad news, likely to widen or not be able to sell. I've had problems selling illiquid stocks in the past. When I was looking to buy the spread was 100p, that was the actual trades. I have also bought Bioventix (LON:BVXP) when the spread was only 2% but I have seen it around 8%, it is not a share I would trade frequently. STM (LON:STM) and James Latham (LON:LTHM) can have very wide spreads and be difficult to buy/sell. Biome Technologies (LON:BIOM) is another that can be very difficult to trade.

unwise2

4th Feb '19

if there is some bad news, likely to widen or not be able to sell. I've had problems selling illiquid stocks in the past.

This is where positon size is important and I rarely hold a stock like Ab Dynamics (LON:ABDP) into results or a trading update.

I usually limit a position to a maximum of 10% of the past 50 days average volume, a figure that is available in my L2 feed.

maffs0

5th Feb '19

Just found this thread. Really interesting as this links with my approach. I have a US based Interactive Broker account with my SIPP and a margin account and I'm trading MM style very successfully since getting back into the market after Christmas. I have 5 US stocks currently (HLF, MEDP, GHDX, LRN and WDAY) all in profit. I'm hoping MSON will break out tomorrow and I'll be buying if it goes above $20.05.

My ISA (UK stocks) is pretty much all in cash as there are really very few set-ups at the moment. I have found in the past that I can't be as picky partly as the UK has a lot less stocks than the US and many of the stocks that do set up are illiquid and therefore don't interest me. I don't know if it's just my perception, but it seems to me that US stocks tend to be more liquid with smaller spreads, move faster, and momentum plays seems to work more consistently over there.

I will keep looking for good plays over here and will post if I find any. Most of the stocks that pass his trend template over here are oil and gas, not an area I am comfortable in.

M.

dmjram

5th Feb '19

From memory, Mark has L2 data but doesn't use as a key input into his trade decisions.

In the UK do you find it to useful in the trading process given the generally wider spreads and their seemingly greater inter day volatility compared to the US?

unwise2

5th Feb '19

In the UK do you find it to useful in the trading process given the generally wider spreads and their seemingly greater inter day volatility compared to the US?

Yes I do, in addition to realtime pricing I can see trades happening live so I can see what the real bid/offer is. This isn't very important for larger caps but very helpful for small to mid caps.

For context the smallest Mcap company I have bought since using MM's method is approx £30m.

unwise2

5th Feb '19

Future (LON:FUTR) is a good example of why I don't screen for earnings growth on Stocko. If you look at the stock report the recently reported full year normalised earnings are listed as 13.5p, 2019 is forecast to be 27.1p so it appears EPS growth is forecast to be 100%.

If you go and read the results RNS you will see adjusted EPS was reported as 26.2p which means EPS is actually forecast to grow less than 4%. 2017 normalised EPS listed by Stocko is also very different to that reported by FUTR.

I don't blame Stocko for this, they buy in their data from Thomson Reuters. I'm just pointing out that any earnings screens results will contain numerous errors.

dmjram

5th Feb '19

RockRose Energy (RRE) is setting up a pivot at 672.

Still not a great market with relatively few set ups that meet the criteria.

maffs0

5th Feb '19

Burford Capital (LON:BUR) looks like it might be setting up a buy point at £18.80. The 50 day is below the 200 day so its not technically in MM territory, but that could change quite quickly.

M.

unwise2

5th Feb '19

The 50 day is below the 200 day so its not technically in MM territory, but that could change quite quickly.

Something Mark frequently says on his MPA sevice is trading is an art not a science, there is a certain amount of wiggle room to some of his rules. I have seen Mark put stocks on his watchlist when the 50d is below the 200d but only when there has been a significant market correction like we have recently had. Another example of bending the rules slightly is Mark recently bought a power play after 8 days, in his books he wrote a minimum of 10.

I already bought Burford Capital (LON:BUR) on 24.01.19 and may add more if it breaks out of 1880p

unwise2

5th Feb '19

Yesterdays MPA session also had David Ryan on as a guest, both David and Mark said the market had been hard work for the last few months, basically like running in place. I found it reassuring that 2 of the worlds best traders with 35/40 years experience have also been struggling to make any real gains.

Trading the U.K has been even more challenging due to additional fears around Brexit.

Rusty2

5th Feb '19

Yes this is the problem relying on data produced by a third party, there have been a few anomalies discovered by members on here and usually corrected by Thomson Reuters. The adjusted EPS is a difficult one as can be many different adjustments.

BottleMerchant

5th Feb '19

Not a UK share but Chemometec (CPH:CHEMM) passes all but one of my Minervini Code 33 criteria as well as being Minervini powerplay.

To my untrained eye it is showing signs of breaking out of a VCP pattern

Rusty2

5th Feb '19

3 that are close to being selected on my screen are Airea (LON:AIEA), £3IN and Focusrite (LON:TUNE).

mmarkkj777

5th Feb '19

Yea, I've just topped up on Burford Capital (LON:BUR). Also, T Clarke (LON:CTO) have just broken out again today, held this since Dec.

probably too late for today, but probably worth looking out for a pull-back.

ISAallowance

5th Feb '19

EI (LON:EIG) are UK, liquid, and forming a base close to the 52 week high. Trading statement due tomorrow so I guess Minervini might not take a position until after that even if it broke out today. I hold already, but may take an additional trading position if it breaks out.

Edit: I notice I've marked the 52wk intra-day high there, it's not the 52wk closing high, which one is normally used by traders?

unwise2

5th Feb '19

Mark uses an intraday high for working out pivot points. The base that started 11.01.19 is a bit short. I nearly bought EI (LON:EIG) on 02.01.19 when it broke above 187.

Howard Adams

5th Feb '19

Hi ISAallowence

EI (LON:EIG) AGM/trading update is 07/02/19 according to Stocko and EI (LON:EIG) own calendar

https://www.eigroupplc.com/en/investors/financial-calendar.html#category1

Regards
Howard

Unlock the metrics for all these stocks and more...

Take a free trial

Facebook Twitter Youtube Instagram RSS

This site cannot substitute for professional investment advice or independent factual verification. To use it, you must accept our Terms of Use, Privacy and Disclaimer policies.

Unlock the metrics for all these stocks and more...

Take a free trial

Trading U.K stock market using Mark Minervini strategy

Unlock the rest of this article with a 14 day trial

About the Author

Unwise2

1516 comments

Unlock the metrics for all these stocks and more...

Unlock the metrics for all these stocks and more...