This week, we sit down with John Woolfitt, Director of Trading at Atlantic Capital Markets. Founded at the start of 2016, Atlantic Capital Markets is one of the very few privately owned, fully regulated multi-asset advisory brokers in the UK.
Along with all other advisors at Atlantic Capital Markets, John is a charted member of the CISI (Chartered Institute for Securities & Investment). His expertise surrounding trading and capital investment means his view on the subject area is extremely well regarded throughout the industry, and is not to be missed.
On the Podcast
The term advisory trading, or advisory management, refers to the provision of professional, personalised investment guidance. John Woolfitt speaks on Atlantic Capital Markets’ role in the industry and how their specialised services allow private investors to consult with experienced investment professionals before making changes to their portfolios. Rather than managing their funds for them, Atlantic Capital Markets’ advisory trading professionals simply provide guidance tailored to each individual investor’s specific financial situation.
As someone who has been in the trading and investment industry for nearly 20 years, John has witnessed countless mistakes from early, inexperienced traders. He claims that a lot of errors early on in a trader’s career stem from a lack of investment discipline. From taking positions that are clearly oversized for their accounts to having inappropriately low levels of risk management, the absence of self-control from young traders tends to be what catches them out.
John is also of the opinion that the recent emergence of social media has given rise to unrealistic expectations regarding profit targets amongst inexperienced traders, and misled them to believe in the “online hype” surrounding a stock without really doing thorough research on the company.
Risk management
According to the Atlantic Capital Markets’ Director of Trading, one of the best and simplest strategies for new investors to align their risk levels with their risk tolerance is use of correct position sizing. Position sizing refers to the number of units invested in a particular security by an investor or trader. John’s advice is for a singular exposure to a stock to not account for more than 20% margin on a trader’s account at any point in time.
In addition to position sizing, John believes another useful risk management tool in trading is the correct employment of stop-loss orders. A stop-loss order is an order placed by a trader to buy or sell a security when it reaches a certain price, and is designed to limit an investor’s loss on a position in that security. If used effectively, John says, stop-losses can prove to be critical to a trader’s short- and long-term success as they facilitate natural position revaluation.
Together with discussing the importance of news awareness and whether new investors can sometimes end up trading too many different asset classes, the podcast moves onto a topic that many young traders will find appealing – meme stocks. Similarly to many experienced traders, John believes meme stocks have no place in a professional trader’s portfolio and that they are not a sustainable investment strategy in the long-term. His position on the subject appears to be very clear.
