Andrew Abraham

andy-0101 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.

Contact Details

If you are interested in contacting for speaking engagements. Please email me at Andrabr9@gmail.com or call 954 903 0638.

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Risk Warning

Futures and commodity trading involve substantial risk. The evaluations of futures and commodities may fluctuate and as a result, clients may lose more than their original investment. In no event should the content of this website be construed as an express or an implied promise, guarantee or implication by, that you will profit, or that losses can or will be limited in any manner whatsoever. Past results are no indication of future performance. Information provided on this website is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible, where projections of future conditions are attempted.

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What Really Are the Risks when Trend Following & Commodity trading

In one simple word, HUGE! Anything can happen in the commodity markets. All one has to do is look at what has recently happened with crude oil and silver. These commodities moved sharply. Losses for commodity traders on the wrong side of this have lost tremendously. There is a trade which is a spread trade called the widow maker, Do I need to say more?

Clearly there are huge risks. Our job as commodity traders or investors with commodities is to “TRY” to mitigate some of these inherent risks…and even then I will say again…” TRY”.

Too many think that trading commodities is a sure way to make money. There is no sure way. There is however the approach to trade commodities with a well thought out plan that is robust that is chock full of measures to “Try” to mitigate the inherent volatility of trading commodities. Most traders or even investors lack this thought out plan. That is why most investors and even commodity trading advisors lose money in the commodity markets. I personally probably have seen every mistake as well as made every possible mistake possible over the last 17 years. The old adage is you learn from your mistakes is well ingrained in my psyche.

The key points that one needs to take into account before they put on any position is risk per trade. Too many do not even think in these terms. What am I willing to lose to see if this trade works? This is the question that one has to ask. My number is simple, .75% of 1% on one model and 1.25% on my slightly more aggressive model. Then one needs to think in terms of sector risk. Too many times traders will plow into a sector and get over weighted which is a recipe for disaster. Then one needs to max out the total portfolio risk. In other words once open trade equity reaches x % …stop taking trades and tighten up existing stops because the volatility on the account will increase with more positions. Next, one needs to look at margin to equity to see they are not extending their risk profile as well.

There is no magic to any of these. These are not promises to negate risk. Risk is always present. Our job is to “Try” to mitigate and stay in the marathon of trend following. One needs to look at their account not daily or monthly…but to think about it as what will my account look like in 10 years. I have personally allocated to groups of commodity trading advisors who have netted me over the years in the 15% range on average. This is over 17 years! This is between bull markets and bear markets, inflation and deflation. None of this matters.

As Michael Covel states in his blog “Decades of Huge Trend Trading Returns”. It is true but do not think there are not risks or draw downs. There will always be draw downs which test your patience. There will always be risk. There will always be extended periods for years you do not make money( YES YEARS!). However there will be periods that you will hit new equity peaks. Trend following and commodity trading have changed my life. It takes discipline and patience. If I can do it, so can you…but it is work…it is not easy…it is not retirement in a box with some magical system or commodity trading advisor. Remember the risks. Commodity trading is not for everyone.

Trading futures and options involves substantial risk of loss no matter who is managing your money and is not suitable for all investors. Past performance is not indicative of future results.

Andrew Abraham
Myinvestorsplace.com
Abrahamcta.com


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