Commodity Futures Trading Second Worst Performing Strategy YTD
Commodity futures trading was the second-worst performing strategy this year. So what does that mean for trend following? Does one who invests in commodity futures trading need to make profits every month or is it more important to make money over a long period of time? Commodity trading advisors and in general commodity futures trading are down to a lack of clear trends in markets. Again who says there must be trends all the time? The way a clever commodity trading advisor looks as this a buying opportunity because, statistically, money-making trends are likely to reappear. After periods of congestion or trendless markets,many times are followed by breakouts both up and down. Foolish investors who are trying to chase last years returns, ( Commodity trading advisors as well as generally commodity futures trading were the stand-out performer in a 2008 for hedge funds, in which the average strategy lost 19.07 percent according to Credit Suisse/Tremont.) give up on the strategy and loss money. Time after time you can see commodity trading advisors who rack up large money under management during the good times only to give it back when reality sets in and choppy markets reappear. The key to successful trend following is patience…and discipline. For those that do not have these characteristics should not invest in commodity futures trading.