My name in Andrew Abraham. I have been investing in commodities and managed futures since 1994. I am a commodity trading advisor/co manager of a commodity pool who adheres 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 us apart from other Commodity trading advisors and commodity pools is that we are not only concerned about the return on investment but how much risk you will have to tolerate to achieve your goals.
Doing the Hard Thing In Commodity Trading!
Too many books and blogs seem to make commodity trading and forex trading seem so easy… The truth can not be further from this…Successful trading is so hard… It is a truly a mental battle..There is no easy money in commodity trading….. You earn it..( that is if you truly want it ). There is only one person that can control your success… that is you.. Regardless if you trade yourself…or if you allocate to a commodity trading advisor. The end of the day..You are responsible!
Too many people think the commodity markets and currency markets are exciting and fun. They forget that these markets can be cruel and ruthless to a trader that does not have a well thought out plan. Again…what I have stated over and over again is that most forex and commodity traders fail. Probably over 90%. You have a choice.
Look at these examples below and if you have been trading without a plan…you will see the mental anguish that one could go through!
1.Your trend following mechanical trading system gets a signal to go short corn. However you read in the papers that Jim Rogers has just announced that he has bought the mother load of corn and expects it to go through the roof. What do you do?
1.Sell anyway
2.You buy instead
3. Do not take the signal and wait for the next
2.Your trend following mechanical trading system gets a signal to go short the SP 500 but it gaps down the limit.
What do you do?
1.Sell anyway
2.You buy instead
3. Do not take the signal and wait for the next
3.You are short Gold ( yes short gold) and the market reaches your exit stop. You are using a mental stop btw. You read on your charts that the market is overbought and you think for sure the gold market will turn. What do you do?
1. Follow your trading plan and cover
2. Wait because you think the market will turn.
4. You invest with a commodity trading advisor who has a 4 year record of 20% + per year with draw downs of 15% max. This year is a rough year for virtually all trend following commodity trading advisors. You see your monthly NAV and see your commodity trading advisor is down 19%. What do you do?
1.Stick with him as you know the greatest draw down is always ahead of him.
2. You sell and run for the hills.
The above are common stories that I have seen repeatedly in real time..and in real commodity trading.
What is the right thing to do?
The right thing to do is realize all of these situations ahead of time. They will surely occur. Have a plan..Follow your plan..Believe in your plan. Test your plan..and most of all have the discipline and patience to compound your way to wealth. The wealth you will earn…you will have worked for. Commodity trading is HARD. You will have earned this money.
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Andrew Abraham
A.Abraham@AngusJackson.com
www.AJpartnersinc.com
www.myinvestorsplace.com
Futures trading involves risk. People can and do lose money
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Andy,
I think its safe to say that the hardest thing about trend following is to sit and wait, but that’s where the money is.
Jim
Add some discipline into the equation and over time potentially good things should happen…
All the best
Andy
Doing the Hard Thing In Commodity Trading! | Commodity Trading & Trend Following - great post, I think this covers most of the questions that I had about advisor best day forex trading