Listening to the Newspapers when Trading Commodities
It seems the newspapers always have reasons why markets moved either up or down. People feel better when they have reasons. Had an interesting discussion with my wife regarding this. She told me the reason that silver went down( according to the newspaper she read) was because China was raising interest rates. My response was ” Really”! I mentioned the fact that the Chinese rose interest rates numerous times this year and why did silver keep on rising then? She told me the newspaper was right. As any good husband would say ” Yes you are right” the newspaper reporter knows exactly why this happened.
However as a trend follower and commodity trader I do not care nor even listen to any of this noise. The fact is the price moved up or down, no knows the future and actual reasons do not matter. Everything is price. These are not just my thoughts but Richard Donchian the founding father of trend following. Richard Donchian made a fortune trend following after losing all of his money in the Great Depression. Richard Donchian is a role model for me and every other serious trend follower. If he made money from the 1940s to almost the 1980s so can any other trend follower who has a plan that is robust and is full of risk & money management.
My point is very simple, one can easily distracted by listening to CNBC or Bloomberg with all of their panelist predictions and projections. The same can be said for those scouring the Wall Street Journal or FT looking for answers. The answer is only in one place…. PRICE ACTION!
Everything is perceptions in the markets…fear and greed are always present. Too many do not want to do the work and expect to be told the answers on how to make money. Trend following & commodity trading is not easy nor retirement in a box. It takes commitment, discipline and patience to compound money over time. Trend following & commodity trading is not for everyone. Make a commitment to developing and following a plan if you want to trade yourself or you can allocate to a commodity trading advisor who understands risk and his plan addresses this issue fully. You can be a passenger on the plan or you can be the pilot. Either way trend following & commodity trading takes work.
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.