Commodity Trading & Trend Following

Almost all market watchers ( except trend followers) are waiting for todays job report. The reality that many do not understand is that the Stock market might not fall and the economy might worsen. All one has to do is look at Zimbabwe. The stock market in Zimbabwe flourished with inflation ravaging the country and the economy imploded. Another interesting fact is that with many expecting a double dip or a stock market crash neither of these two events might not happen. However all the while the economy worsens with unemployment and housing.

The good news with this though is you do not need to figure out which direction the stock market will be headed or the outcome of today’s job report. As a trend follower you just need to have a plan and follow it. No one knows where any market is going. It is a level playing field. What you need to do however is manage your risk. Defense..Defense..Defense…

If there will be a crisis, trend followers as in most cases in the past were positioned before hand and took advantage. Trend followers made money in the crisis of 2008.

If you want to compound your way to wealth have a plan and follow it. What does this mean..If you trade yourself… consider a method that matches your personality. I am a trend follower. I have no emotion. My system is followed diligently by my colleagues and all trades are executed by them on the trading desk. A complete plan as far as identifying a potential trade…stops are immediately placed… risks are measured…correlations of positions are checked…total risk is checked… This is my methodology. I trade multiple systems…multiple time frames..multiple markets to hopefully grind out that proverbial 10-15% return overtime. More so I allocate to commodity trading advisors that think the way I think and strongly monitor risk. This is my goal to continue grinding out returns and compounding money over time. It is truly a marathon. This is a get rich slow…over a long period of time.

Compare this with trying to figure out the markets. Even if you can figure out the market, it can go a complete different direction. As in the video below Nouriel Roubini discusses the current situation. It is interesting and mentally stimulating but it is not necessary to know what he knows in order to be successful. Is a 40% chance of a Double Dip a positive or negative thing? You tell me? The cup is half full or half empty?

Follow the trend …have a plan… manage the risk… have discipline and patience to let the plan work out over time

Andrew Abraham
Andrabr9@gmail.com
www.myinvestorsplace.com
Futures trading involves risk. People can and do lose mone