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.
Profiting in a Declining Market
Anything can happen in commodity trading. As much as inflation can come about there can be deflation and result in a declining market. Most people do not think it is possible to profit in a declining market. This could not be further than the truth. As long as there exist trends profits can be made on the upside or on the downside. However on the upside there is no limit how high it can go…so there is statistically more profits on the upside.
So many are afraid of bear markets but there are successful trend following commodity trading advisors that know how to make profits in commodity bear markets. Many commodity trading advisors like bear markets because there is less involvement of both the public and institutions. The common knowledge that the public is always wrong. More so, the public has a stigma about going short.
To me as a trend following commodity trader…it is as easy going short as going long. I really do not even think about it. I let price dictate my actions with my model monitoring the situation.
I have seen in my career that Bear markets go far below their true economic value. One example of this was last years Crude trade. It completely fell out of bed and has almost doubled from it’s bear market lows.
If you want to be a successful commodity trader. Make yourself available to which ever direction any market wants to go. This is the one of the keys to be a successful commodity trader.
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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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Risky and speculative, many investors shy away from investing in commodities. However, it can be a very lucrative way to make money if you have the stomach for its wild ups and downs.