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.
Absolute Returns in Trading Commodities
The goal of trend following commodity trading advisors is the idea of absolute returns over long periods of time. What this means as much as there is a commodity trading advisor index or comparisons… there is not a standard benchmark. The goal of commodity trading advisors is to provide returns in all market conditions. However do not mistake this that commodity trading advisors year in and year out provide positive returns. Commodity trading advisors can only provide positive returns when a commodity, currency, interest rate or index trend. If there is no trend….there are not going to positive returns. Trends do develop over time. Due to this there are some successful trend following commodity traders that have returned double digit returns on average over many years. They are disciplined, consistent and focused in their futures trading.
The idea of trading commodities is not similar to the idea of indexing or benchmarking. These are usually only one directional and in many cases can lead to extreme draw downs. Ask anyone who invested in an index fund based on the Nasdaq and ask them how they feel currently.
Commodity trading advisors look at a basket of potential markets. They will equally go long or short without any opinion.
Too many investors look at monthly results compared to an index. This is not the way to compound money over long periods of time. To make it clear, most commodity trading advisors struggled 2005 and 2006 and then in 2007 and in 2008 when the world was melting down these very same commodity trading advisors had strong performances. Anyone interested in investing in commodity trading must take a very long time horizon. Nothing can happen for years and then low and behold large performances are realized. Trading commodities is one of the hardest yet easiest thing to do. It takes commitment…discipline…and a strong desire to succeed over long periods of time. Realize anything can happen when trading commodities…as well, know for a fact there can and will be long periods nothing happens ( no returns). This is the truth about trading commodities! There is no get rich quick way in commodity trading but rather make yourself available for oppurtunities when they present themselves. This is the holy grail of futures trading!
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Andrew Abraham
www.myinvestorsplace.com
Futures trading involves risk. People can and do lose money
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