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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Psychology of Risk in Commodity Trading

The psychology of risk in commodity trading is not that often of an issue discussed. I want to share an interview with my colleague Martin Bedick.

Martin Bedick
on the
Psychology of
Risk in Trading
bedick

AJ: Martin, one of your main interests has been the psychology involved in commodity trading. What is it about this areas that interest you?

MB: You are not going to believe this, but I actually thought trading was going to be an easy way to make money. It was only after a poor period of trading, I realized I had a problem. Since I wasn’t making any progress, I decided to re-think my approach to trading.
In the original Market Wizards book, there was an interview with Van Tharpe. He was a psychologist that worked with traders, and at that time was working with Ed Sekoyta, one of the greatest traders in the last 30 yrs. After reading this interview, I arranged to attend one of their weekend commodity workshops.
AJ: What did you learn at this workshop?

MB: I learned how important one’s mindset is to trading successfully.
AJ: Could you elaborate for us please?

MB: Sure, as you know, trading is not easy and all traders are going to be presented with challenges on a constant basis. One of my all time favorite quotes comes from Mark Douglas’ book The Disciplined Trader. He states, “Most people like to think of themselves as risk takers, but what they really want is a guaranteed outcome with a little bit of suspense.”
AJ: Are you saying they are not aware of the risk?

MB: No, I am saying that they have not accepted the risk.
Truly accepting the risk in trading, means you are no longer afraid of what may happen. The only thing that is certain in trading is nothing is certain! Once you understand that anything can happen, you will always act in your best interest and protect yourself.
The successful trader is not afraid. Losing traders are always fearful.
AJ: What are they so fearful of?

MB: Most are fearful of losing money. However, some are afraid of their analysis being wrong, and others fear either missing a big move or leaving money on the table.
AJ: So conquering your fears and accepting risk are similar in trading?

MB: Yes, most traders spend vast amounts of time searching for a method to eliminate the risk. We all know this is impossible. Instead, one needs to change their mindset so that they truly learn to accept the risk.
This may be the risk of losing money, the risk of being wrong which can lead to criticism from colleagues or clients, or the risk of missing moves by either entering late or exiting early which could lead to a different type of angst all together. Only then, when one can truly accept all the risks involved in trading, will you become a better trader.
AJ: Thank you Martin, for that glimpse into the psychology of commodity trading today. I believe our readers will find your views both interesting and valuable.

If you have commodity related questions please, feel free to contact me. I will be happy to answer your questions to the best of my ability.

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Andrew Abraham
A.Abraham@AngusJackson.com
www.AJpartnersinc.com

Futures trading involves risk. People can and do lose money


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