Andrew Abraham

andy-0101 My name in Andrew Abraham. I have been investing in commodities and managed futures since 1994. I adhere to the philosophy of trend following. Trend following stresses a disciplined approach to commodity/ futures trading. Successful trend following and commodity futures investing requires patience, discipline and actively managing the risk. What sets me apart from other traders is that I am not only concerned about the return on investment but how much risk I will have to tolerate to achieve my goals.

Contact Details

If you are interested in contacting for speaking engagements. Please email me at Andrabr9@gmail.com or call 954 903 0638.

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Risk Warning

Futures and commodity trading involve substantial risk. The evaluations of futures and commodities may fluctuate and as a result, clients may lose more than their original investment. In no event should the content of this website be construed as an express or an implied promise, guarantee or implication by, that you will profit, or that losses can or will be limited in any manner whatsoever. Past results are no indication of future performance. Information provided on this website is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible, where projections of future conditions are attempted.

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The Presidential Election & Trend Following

A colleague sent me his update on his trading and included his views on the potential volatility with it’s impact on Trend following due to the US Elections…

PRESIDENTIAL ELECTION
This is probably the most interesting and unpredictable presidential election in our lifetime. It will come down to who will win Florida, Ohio, N. Carolina, & Pennsylvania.

Regardless of who wins – they’ll inherit a huge mess:

Unemployment of 9.7% (U6)
Over 45 million Americans now in Poverty
43 million American on food stamps
94 million who have dropped out of the labor force and no longer look for a job. This is why unemployment has dropped, it doesn’t count those who have stopped looking for work.
A 50 year low on the Labor Force participation rate of only 62.8%
Record low home ownership rate
Riots in the streets
Systemic Poverty. We have spent over $22 TRILLION on the ‘War on Poverty’. Apparently we’ve lost.
National debt has doubled in the last 8 years and is at $19 to $20 Trillion dollars. Much of this debt is short term and costs the Gov’t over $200 billion/yr of the budget. A spike in interest rates could easily double or triple the payment. Hence the Gov’t pressure to keep rates low into eternity.

What does all this mean for Alternative Investments & trend following? Stocks will eventually run low on buy backs and cost cutting, therefore the returns will shrink. Should Mr. Trump win, the 15% Corp tax rate he proposes would be a huge winner for the economy and could be a game changer. Hillary has said she’ll raise taxes including raising them on the middle class and continue with most of the current policies in place. Regardless of who wins volatility like we haven’t seen for years could manifest in a dramatic fashion.

What do you think?

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Trend Following Leading Stocks

In this recent example of a leading stock AHS for Trend Following

You will notice there are two entries at two occasions. The two entries are a W pattern and a Livermore shake out plus 3. The W pattern is a low and a lower low and look to buy the high of the first low as demonstrated. The Livermore Shakeout Plus 3.

ahs

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Hitting New Equity Highs and Then….

August has not bee overly kind to trend following CTAs, myself included.I finally after a long struggle was hitting new highs in equity. I told one of my potential investors, it does not mean anything as this is a long struggle and similar to a marathon. Trend following takes a very strong mindset based on determination and the will to continue regardless how tough it gets. As David Druz wrote in my book
The Bible of Trend Following

Trend Following is getting knocked down and getting back up…Sounds easy right, nope…After getting back up…getting knock down again, and guess what, Having it happen once again, getting knocked down!

This simple statement accentuates trend following. This is why when I teach, I stress the emotional aspect. Trend following in itself is rather simplistic. Prices go up and we buy…prices go down and we sell….however there are so many aspects such as risk per trade…correlation etc….

Bottom line of my ranting…Trend following takes a great deal of emotional fortitude as well as humbleness. The markets are unforgiving. Once you think you are getting out of a draw down…boom…your equity curve swings….

This is the reality of trend following. More so the last several years have been the toughest I have ever seen. No one rings a bell…however with all of this money printing at some point I personally believe we will see rampant inflation that most are not expecting.

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Trend Following Indicator For Metastock

I have been receiving numerous requests for my Trend Following Indicator. It is coded for Metastock. I have been a metastock user since 1994. I have not found another platform as easy to use as Metastock…

You can note the coloring showing trends all based on moving averages.

metastock

ara1

araa2

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Paul Tudor Jones- Firings

Yesterday on CNBC there was a piece about Paul Tudor Jones laying off approximately 20% of his staff.

The question that pops into my mind is it that Paul Tudor Jones is just too big…or have the markets just been too tough. In all of my career, I have never had such a rough period. Many Global Macro guys as well as CTAs – Commodity trading Advisors have struggled since 2011. If I look at a rolling 5 year period , only small CTAs have profited. Most have gone through very tough draw downs.

John Henry the legendary Trend follower closed up his shop over the last years. Many called for the “Death of Trend Following” Is Paul Tudor Jones another nail on the coffin?

I doubt that very much. What I do not doubt, is how emotionally draining and how tough trend following can be. That is why most do not succeed. It is easy to quit. It is not easy to show up and put on trade after trade in the face of adversity…

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Relative Strength leaders China ETF Trend Following

The old saying I say all the time…you want to buy the strongest. Chinese ETFs currently are the strongest based on Relative strength. This is confirmed by the moving averages. One could simply buy the breakout…in this case 70 day high…filtered by being above moving averages. The stops also can be moving averages or average true range. The first trade did not work…however the second so far is trending along….

Sorry folks and all those who like complicated. This is very simple and takes very little time.

china

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Systematic Trading -Taking Trades You Think will Not Work

I know this first hand….Taking Trades You Think will Not Work Been there and over the years have grown from it. I hear it all the time from traders and trend followers who use an automated algo systematic way of trading.

One must realize as I realized…that we do not know the future….that anything can happen….that we must be consistent when following an automated systematic trend following system.

Once you start second guessing your system you are doomed. You need to internalize that your profits are made over a very long serious of trades over years.

Try to keep this in mind when trend following.

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Consistency in your Trading

I speak to many people who want to become “better” trend followers or traders. I see the same thing over and over again. The more complicated the better….Always striving for the perfect system or indicator. Trying to avoid trades that do not work…ie Losing

The only way to reach any kind of durable market success is through losing. Realize this and accept this.

The simpler the trend following methodology, the better the chance of long term compounding of money. Nothing optimized!

The real world is tough. We must be flexible in our expectations and rigid in our rules…

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Tough Year for Hedge Funds – 2.55% YTD

The fact that hedge funds are struggling goes to prove how tough trend following and all trading really is.

I report to Eureka hedge my trading results and received an email from them this morning.

What stood out in this report was Long/Short Equity traders and CTAs ( Commodity trading Advisors) had double digit returns. I am a CTA and the last several years have been the toughest for me since 1994.

That is why you need a complete trading plan and the fortitude to stick with it…

Hedge funds up 1.52%, posting fifth consecutive month of gains – 2.55% year-to-date

Index Flash Update – 10 August 2016

Hedge funds were up during the month of July, gaining 1.52%1 while underlying markets as represented by the MSCI World Index (Local) were up 4.18%. Roughly 73% of the underlying constituent hedge funds for the Eurekahedge Hedge Fund Index were in positive territory this month thanks to a broad-based global equity market rally and an improving investor risk appetite post-Brexit. Latin American managers led performance among regional mandates this month, and were up 4.30% while relative value managers topped the table across strategies, gaining 2.92% over the same period.

As of 2016 year-to-date, hedge funds gained 2.55% with over half of managers posting positive year-to-date returns. Roughly 12% of hedge fund managers have posted year-to-date returns in excess of 10% over the past seven months, down from 16% of funds over the same period last year. One-third of these funds posting double digit gains are long/short equity mandated while another quarter of them are CTA/managed futures mandated hedge funds.

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High Tight Flag Pattern Failure – Trend Following Cotton

Trend following patterns work and sometimes as in the case of Cotton, they don’t. I was in this trend following trade and as always I temper my expectations. Anything can happen when trend following. I had very nice profit in this position and noted a high tight flag. This is a rare trend following pattern. It led me to think potentially that the cotton move could be like it was in 2010. That was a massive move….however as much is past performance is not indicative of future performance, I received an email from my trade desk that I was filled and out of this position.

Point…
Anything can and will happen with Trend following. Trade with hard stops. Understand that trend following is a grind. Most of the time you will be giving back profits…However if you can stay in the game or marathon…potentially you stand the ability to compound money…

cotton

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THE RISK OF LOSS IN TRADING COMMODITY FUTURES, OPTIONS, AND FOREIGN EXCHANGE (“FOREX”) IS SUBSTANTIAL.

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