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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Profiting from Trend Breakouts & Failures

Profiting from Trend Breakouts
Trend Breakout trading was proposed by Richard Donchian back in the 1940s. What is fascinating with Richard Donchian is that he lost of all his money in the Great Depression. He picked himself up and thought there had to be a better way. He came up with a technical approach to trading stocks, currencies and commodities called a breakout strategy. His work became the foundation on which later many traders around the world would build their systems. The concepts are very simple however they are very hard to actually trade from a psychological standpoint. Donchian developed the 4 week rule. The concept of the 4 week rule is one of the most successful systems tested by time. Decades later William Eckhardt and Richard Dennis the originators of the Turtles program used the same strategy in the 1980s. Both Eckhardt and Dennis were futures traders and they made a bet to see if trading can be taught. They ran advertisements and gathered a group of traders for a 2 week course. Most of this 2 week course was not built on the actual methodology rather “How to think and cope with the fears & greed’s in the markets”. The traders in this program all had various levels of success mostly due to the trading mentality & psychology they built up and developed. The strategy they learned was very simple, yet hard to actually do. Donchian’s strategy was to “buy when a stock made a 4 week new high” and his exit rule was ” sell when it makes a two week low”. The KISS principle- Keep it simple and keep it stupid!
1) Cover short positions and buy long whenever the price exceeds highs of the four preceding weeks.
2) Liquidate long positions and sell short whenever the price falls below the lows of the four preceding weeks.

Absolutely not rocket science! The Donchian system is based on sound technical principles with signals that are mechanical and simple. It is a trend-following approach that every trader with discipline is guaranteed to be on the right side of every trend. You cannot miss a trade! Donchian didn’t predict price movements, he just followed them. He knew his opinion did not mean anything. He knew that trends have existed throughout time and will continue in the future. A trend in motion is more likely to continue than reverse. Donchian learned that the strongest trending moves start from new market highs NOT market lows. He learned the proverbial phrase “let profits run, while cutting losses short” (actually this is on the back of my business card).

Many traders just do not get it. I am glad you are reading this article and you will learn it is not just the system; it is the money management and trading psychology that will help you to become a successful trader. The fact is that more than 90% of all traders fail. They spend too much time trying to find the Holy Grail system or Holy Grail Indicator. They do not believe that simple and robust can make them money. They think complicated is better. I can tell you first hand after trading (surviving) more than 19 years in order to be successful you need a simple robust simple, money management, correct trading psychology, patience and discipline. If you can combine these attributes you put yourself in the position to compound money. It is not easy. You will have to work. You will have to work on yourself. However if I can do it, so can you! You will be surprised to know that some of the original turtles became billionaires trading with this simple strategy. Jerry Parker was one of the original turtles. He was an accountant and did not know anything about trading. He learned under Eckhardt and Dennis. At one point in his career he was managing in excess of $2 billion dollars. He had been trading since 1988 and received a 2% management fee and 20% of the profit from his clients. You do the math. He is not alone. Bruce Kovner is a trend follower who buys & sells breakouts was the principle of Caxton. He too became a billionaire. Louis Moore Bacon is another example from Moore Capital Management. In 1990 he created Moore Global Investments using $25,000 he inherited from his family. Moore is currently managing billions!

Again, I want to point out strongly, trading is not easy nor for everyone. It was not easy for me nor will it be for you. It is a process.

Past Performance is not indicative of future performance


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