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.
Using Mental Stops in Commodity & Forex Trading
In my years of experience trading commodities, it seems the only time mental stops should be used is by a large trader who doesn’t want his open stop sitting in the market for the fear that someone might run their stop. For most other traders having mental stops is a serious flaw in their trading. These traders are afraid of getting whip sawed. Well they might avoid getting whip sawed once or twice until the time the market sears through their mental stop and destroys their trading account. As Ed Seykota has said so many times, ” If you want to avoid whip saws..Don’t Trade!”.
What I have seen with mental stops is the commodity trader freezes. All it takes is one bad trade to destroy a trading career. I have seen one successful trader that was a mutual fund manager for decades freeze and blow up his personal trading account.If you have never seen something like this you are fortunate. Not using pre determined stops are one of the main reasons of failure. In my opinion mental stops are an invitation to destroy your trading career. If you are allocating to commodity trading advisors …make sure you understand how they place their stops. Understand their risk management. NEVER>>>NEVER…simply just rely on past trading results.
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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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starting to love this forex trading! The more I get into it.