Commodity Trading & Trend Following

Every trend follower knows not to predict. The price of silver has been a rocket ship in the trajectory of the sky. In the last silver mania move back in the 1970s investors and traders could not believe how high silver could go. I remember being at a conference when Leo Melamed former chairman of the CME stated he got out too early in silver. As trend followers we have a plan. We hope for these rare big moves like silver has done already. We follow the move and do not arbitrarily decide when to exit. Silver futures have now surged to a new 31-year high of $42.86 per ounce as of this morning. All we need is for silver to rise by another 15.5% and silver will reach its all time high set in 1980 of $49.45 per ounce. However, silver’s high of $49.45 per ounce in 1980 would equal about $140 per ounce in today’s dollars adjusted to the consumer price index and about $400 per ounce in today’s dollars adjusted to the real rate of price inflation. What a move that will be! Trend followers believe anything can happen. A simple recent example was the ascent and crash of crude oil. Where is the logic for crude to go to $147 dollars a barrel and then implode to $30 range? I am sure some fundamental experts have reasons in hind sight but trend followers made money in both directions.

According to National Inflation Association they expect a silver mania and prices to move by $2 or more on a single day. Maybe a silver mania is on the way and maybe we have experienced the high in silver today? Who knows…trend followers do not care. We just try to make ourselves available when there are trends. No predictions.. No fear..No greed…Just a thought out plan based on every possible outcome.

Past performance is not indicative of future performance
Futures trading involves risk. People can and do lose money

Andrew Abraham
Myinvestorsplace.com
Abrahamcta.com