Commodity Trading & Trend Following

One of the vast differences between the results of trend following in commodity futures trading lies in which markets a trader invests in.

The number of markets usually depends on account size. The larger an account the more markets possible to be traded and vice versa. Do to this constraint smaller accounts can not trade as many markets. One of the principles of commodity futures trading is that is a known fact between commodity trading advisors…and professionals…that no one knows the future and anything can happen. So if we take this fact it is quite possible to miss one of the most trending markets just solely on portfolio selection.

This is a solution in which I use in my trading. It is called Tactical portfolio selection. What this means is, identify the strongest and the weakest markets once a week. Once these markets are identified I look for low risk trades, usually less than 1% of my account. This way I make myself available for oppurtunities when they are available. In my opinion this is the truest example of trend following. Why would I want to try to trade a market that is not highly ranked. This would mean it is not truly trending and my goal is to trend follow the strongest and weakest markets with low risk bets.

Andrew Abraham
www.myinvestorsplace.com

Futures and commodity trading involve substantial risk.People can and do lose money trading.