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.
Forget About Predictions in Trend Following
One needs to forget about predicting if they want to succeed in the investment arena. Sorry…no more CNBC Guru experts or Bloomberg soothsayers. I have yet to meet someone who has accurately predicted consistently anything long term. There was Joe Granville as well as Robert Prector. They called stock market crashes but most market participants today have never heard of Joe Granville. The fact is you do not need to predict anything in order to have the potential over time to succeed in the investment arena. The key to potentially compounding your way to wealth is trend following.
Trend trading demands patience and discipline to follow exactly a well thought out and tested plan. There is no emotion no guessing…Actually it can be very boring and boring is good. Successful trend following requires a strong focus on risk management system that is based on current market price, the account size and current market volatility. I do not risk more than 1% of my account size for any trade. Besides my own trading, when I allocate to other commodity trading advisors I want to know their risk per trade, risk per sector,total equity risk as well as margin to equity. This gives me a feeling of potential draw downs to expect. What I am referring to as far as risk per trade this tells me how much to buy or sell based on my current account size.
Forget about black boxes…forget about finding the holy grail. The only holy grail in trading is patience, discipline and following a good plan based on risk. The key is not the return on investment rather how much risk is needed or used to get to that return on investment.
Trend following gives investors potential profits in all types of asset classes such as commodities,currencies, bonds or any liquid vehicle as well is in bull markets and bear markets. Once you realize you do not need to predict and rather react you are on the right track potentially for compounding your way to wealth.
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
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