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.
Randomness of Commodity Trading Advisors Returns
The reality is there exists a great deal of correlation between trend following commodity trading advisors… But there are always a difference in their returns…Many times because I have managed accounts I see a great overlap. It seems virtually every commodity trading advisor had the sugar trade. The sugar trade was a perfect setup. It was a low volatile period and for whatever reason sugar went upwards. The same can be argued for so many commodity trading advisors were short the US dollar.
Again..there are differences in returns. It finally dawned on me during a discussion with another commodity trading advisor that I will probably invest with. The differences can be as subtle as a difference in the stops used by the commodity trading advisor. In one of my systems… I use a 2 period standard deviation trailing stop. On another I use an ATR stop..similar but different…as well on a another model I use a combination of ATR and x period low ( or high ) in price. The same can be said on entries..Many commodity trading advisors are long Gold…but we have different entry prices. As well one of the commodity trading advisors I have allocated to scales into the trade. Again different results.
Point!
I know from all my years of experience to diversify and never allocate more than 5%. More so..
I know what my personal goal is …Compound my way to wealth.
With this goal in mind..if I allocate to groups of commodity traders that think the way I think…that are extremely aware of the risks…I am smoothing out my own trading. In one period I might out perform them…or vice versa… but it does not matter.. my goal is to compound money over the long run.
There will be a randomness of the returns of the commodity trading advisors I allocate to…as well as the commodity trading I do with my partners.
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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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