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.

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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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Bear Trap,Bull Trap and MF Global Trap

We as trend followers easily fall into bear traps…bull traps but few escaped the MF Global trap. I personally started transferring accounts and only got out 2 accounts because I liquidated them instead of transferring. However I also kept a large chunk of liquidity at treasury direct. I still have 7 accounts which are flat positions ( thank GD) with cash in them. The key is what to learn from all of this. I chuckle to myself as I have said many times to other trend followers and potential clients, I have seen every mistake and made every mistake. Well I can add the MF Global as another mistake which I am using as a learning lesson.

These are my opinions on what I “think” I have learned from this.
1.Regardless of size always have two FCMS or two IBs. This way you can transfer or offset positions in an emergency.
2.Sometimes we are not paranoid enough.
3.If you are uncomfortable regarding your FCM, liquidate immediately…do not do the 3 day transfer. My 3 day transfer came and went and the cash was not wired out as promised.
4.If you are trading managed accounts always keep the bulk of the money at Treasury Direct- A deposit service of the FED
5.If customers are not made whole the entire industry is at risk. If segregated accounts can be violated -NOTHING IS SAFE!
6. Diversify and diversify more. Besides running my own trend following programs I invest with groups of CTAs. I never risk more than 3% of my net wealth to any one investment.
7. If you invest with a CTA via a fund product understand fully where is their cash deposited.

These are trying times for the majority of trend followers & CTAs. I believe we will get through this and believe those who have funds at MF Global will be made whole. If they aren’t ( myself included) it could destroy the Futures industry an outcome I see as not an option.

Learn from mistakes, learn from others.

Abraham Investment Management

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

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1 comment to Bear Trap,Bull Trap and MF Global Trap

  • I agree with all points, but especially with “5.If customers are not made whole the entire industry is at risk. If segregated accounts can be violated -NOTHING IS SAFE!”

    It’s unreal to believe that customer money could be unaccounted for. That shifts the bankruptcy from total incompetence to outright fraud. In my book “Jackass Investing,” I expose the myth that government regulations protect investors. I’m disappointed that industry participants and regulators continue to do their best to confirm what I’ve written. It’d be great to be proven wrong on this myth. If you’d like to read it, here’s a complimentary link to “Myth #14: Government Regulations Protect Investors”: http://jackassinvesting.com/lookinside/lookinside_chapter_14-01.php .

    You can also read my current blog post on the MF Global fiasco at: http://www.jackassinvesting.com/wblog/blog.php

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