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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Using Long Term Moving Averages to Determine Trend $QQQ $GDX

Trend following all depends on your time frame. In order to avoid all the noise out there, I strongly suggest to look at weekly moving averages to get an idea where we are at the moment in the dominant trend. In this video regarding trend following you can get some ideas in order to help you become a better trend follower by looking at the long term via weekly charts and weekly moving averages.

What the weekly are showing at the moment ( however they can change very simply as well) that Gold is starting or potentially starting an up trend and the Nasdaq is starting a down trend.

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2008 Stock Market Again?

I received this chart from a friend this morning….There is an overlay of 2008 stock market chart and today’s stock market action….

What do you think from a trend following perspective?
histry

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Bible of Trend Following

I just shared this piece from David Druz….Trend following is extremely challenging….Psychology is the key…

The Bible of Trend Following

I’ve been trading for investors for over 30 years. My first fund, Tactical Commodity Fund started in mid-1981. Tactical’s current program began in 1993 as an offshoot of that first fund but with lower leverage and some evolutionary changes. I’ve learned a lot over the years. I’ve seen a lot of markets, a lot of bull moves, a lot of bear moves. And I can tell you I wish I had read this book 30 years ago. I would have made more money, especially near the beginning. Do yourself a favor. Read it. Now.

My trading-for-investors career began not long after gold peaked around 870 and a bit over a year before the S&P bottomed near 100. I subsequently watched gold drop more than 70% over 19 years and then rally over 700% in the next 12. I watched the stock market rally for over 17 years with just one big, brief pullback along the way only to witness two retracements greater than 50% in the next 10 years.

I’ve seen almost too numerous to remember booms and busts in the commodity, currency and interest rate markets. I’ve seen things happen that everyone said never would and watched as things didn’t happen that everyone said were inevitable. I’ve traded and held positions in these markets nearly every single day since mid-1981.

Tactical was one of the first systematic, computerized fund managers. We started out on a Radio Shack TRS 80, before the first Apple. Historical data that costs pennies now took months to type in by hand. We ran Fourier transforms and proved there were in fact no repeatable hidden cycles in the markets while everyone else was still talking about them. We tested all the market lore to see what was true and what wasn’t. We tested the early mechanical systems that were touted and found most of them didn’t hold up. Indicators that people still use today we learned years ago don’t really give you a statistical advantage.

I wrote my own back testing software and tested everything I could think of. When personal computers advanced we bought the latest. For a number of years we had two Sun workstations running 24/7 doing systems testing when those were state of the art. Of course now you can do the same things much faster on a laptop. But that was then and this is now. We kept testing. We kept learning.

I read every book I could get my hands on about trading. I listened to the old traders. When I worked during summer breaks in college at a brokerage firm at the Chicago Board of Trade I kept my ears open as the old timers related their adventures, their successes, their failures. I tried to understand the psychology of the winners and how it differed from the losers. I got the idea that the psychology of the trader was as important if not more important than anything in success or failure.

I spent a lot of time learning things the hard way, a lot of trial and error, a lot of hard knocks. Trading is still a lot of hard knocks. Drawdowns can go on seemingly forever. You can have days, weeks, even months on end without much in the way of profits. It can feel like you are a punching bag or a movie double who takes all the hits. But that’s the nature of the game, of the business.

Even after you’ve learned how to do it, you still take your hits. To succeed you just need to stand up every time you get knocked down. You need to have the confidence that standing up is the right thing to do. You need to know when to stand back up and how. And just by standing up again and again and staying standing as long as you can before you get hit again, well, you can actually make more money than you lose over the long run in trend trading. It’s quite the amazing process.

Very few people succeed in this process. The learning curve is too steep and the correct psychology is too hard to implement. If you have any attachment to making money, and who doesn’t, it is very tough to trade correctly.

This brings me to the book you hold in your hands. To reiterate: I surely wish I had it 30 years ago. It would have saved me a lot of work. And I would have made more money, especially in the early years. More specifically I would have lost less money and that would have put me farther ahead today. Andy Abraham has written a gem. His writing style is enjoyable, clear and entertaining. He covers all the main ingredients needed for successful trend trading. He tells the truth.

What impresses me most about Andy’s writing is his honesty. He doesn’t sugar coat things. He doesn’t tell you it’s easy to make money. He tells you that you need patience and discipline. (By the way “Patience and Discipline” has been Tactical’s slogan since its inception.) Andy tells you drawdowns and losses are part of the business. He presents a track record of one of his own programs that he started just a few years ago that has not made new highs in 17 months. That’s exactly how it works sometimes. What is so refreshing is Andy’s honesty about it. The man has integrity.

A characteristic of those traders who have been successful over many years is honesty with respect to their trading. You need to understand your own psychology, where you are mentally strong and weak, how you deal with baser emotions, particularly fear and greed. If you lack honesty with yourself you will almost certainly fail. Andy’s honesty, more than anything, tells me he understands trading psychology and gives me confidence he is qualified to teach others what he knows. I have yet to run across a trading book that emphasizes the psychological aspect of trading better than this one.

This book is not a cookbook. It does not outline a mechanical system. It explains the psychology needed to succeed in trend trading, gives some examples of traders who have applied it and sets out the underlying principles which should be followed for success— trade the best markets, trade with the trend, bet small, use stoplosses, cut losses, ride winners, don’t overtrade, be patient, be disciplined.

As a bonus, Andy gives you the scaffolding for a particular methodology that works for him as an example of everything he sets out in the basic rules. Just as you would never think of moving into a new house that has been framed but before the roof, walls and interior are finished you cannot and should not attempt to trade Andy’s “system” without doing all the finishing carpentry. You need to do your own back testing—doable these days with off the shelf software he describes—to fill in the parameter values and to learn how his trade-the-best market portfolio ranker shuffles which market signals you take. For those who don’t have a clue where to begin Andy gives you his exact pattern to follow. Your own back testing fills in the parameter blanks.

Andy advises everyone that they must trade a style that fits their personality. I believe very strongly he is absolutely correct. You will not follow a system that does not suit you. In his wisdom Andy thus does not give you all the parameter values for the formulas in his personal trading scaffold. He wants you to do your own back testing, to find a methodology that you are comfortable with yourself and have confidence in. When all is said and done your approach may be identical to his with your own parameter values. It may be significantly different. Regardless, you cannot develop the confidence to pull the trigger after multiple losses in a row without having done the work yourself. Guaranteed.

It’s a fair bet to say that any trend following methodology likely to succeed over time will employ the general psychological and fundamental trading rules Andy outlines. The specifics of everyone’s approach will vary, but the broad principles outlined here will be present in one form or another in virtually all robustly successful trend following approaches. People say that markets have changed and new rules are needed for the new game. I’ve heard that for over 30 years. The markets do change but the underlying fundamental rules for success don’t seem to. They are all outlined here. How great.

You are lucky to have picked up this book. If you are a seasoned trader, reviewing the basic elements of winning psychology makes this book worth perusing cover to cover. We can all use reminders, yours truly always. If you are new to trading this book can save you years of trial and error and monetary losses. This book is now on my short list of recommended reading material for traders. I sincerely thank Andy for having written it. Have fun reading it. I wish you all the best in your trading.

Dave Druz
Tactical Investment Management
CTA / CPO since 1981
Haleiwa, Hawaii
April 2012

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Time to Go Long the Stock Market Again- Trend Following

We have had several nice up days…so all clear? Well, there were no breakouts today of leading stocks. The lack of buyable stocks is a cause for caution and I would take new position very carefully if at all, but this follow through looks a bit better. We are still below the 50 day and 200 day exponential moving averages. We are not on a buy on my Andrew Abraham Trend following model. One day above support is positive but not a complete positive.

My leaders are not the most dynamic…You want to see in growth stocks tech companies or new unique product companies….rather we only have food stocks, utilities and metals. Not impressive…

Watching
FB
TTWO
XRS
EW
HA
MXL
ELLI

qqq

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Trend Following Breakouts and Retracements $GDX $SPY $QQQ

When we trend follow we either buy/sell breakouts or utilize trend retracements as entries….
We always look at the stock market first as everything is interconnected. In this video we discuss the stock market as well as the ETF GDX.

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Trend Following the Stock Market Weekend Review $GDX $SPY $MXL $QQQ

Been a very tough stock market for traders who are battling along with the bulls and bears. Fridays action was somewhat encouraging, albeit on lower volume. Lower volume does not show commitment rather a potential bear market rally. The market rallied due to jaw boning of crude cutbacks. Crude flew up and the stock market followed. What is interesting is that many of the prior leaders are now also failing. Reits are failing and crossing their perspective 50 day moving averages.

Uncertainty is the theme for the stock market right now. However we do not walk away from the stock market. We are always building our watchlist.
On my watch list is
$ELLI
$MXL

Time will tell however sidelines are where I am located at the moment.

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Deutsche Bank Great Short for Trend Followers

I had a call yesterday of bottom fisher whose hands have been getting burned. He asked me what I thought about Deutsche Bank AG. I told him very simply, from a trend following perspective it was in a long down turn. Other than that, I do not have any opinion. He was exuberant as he told me the bottom was in and it had jumped 14%. He had thought he was buying a bargain as we all like to do, however Cheap has been getting cheaper. He had gotten in around 25.

I tried to explain him the fundamentals of trend following. We have no idea where any market is going. We react…not predict…Leave that to CNBC. We look to let our profits run and cut our losses short.

He was doing non of the above…I did not give any advice rather…Trade with the trend…

db

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Jim Rogers Warned “The Market Knows It’s Over”

After yesterday it might be fair to say we saw the Bull Stock Market Highs 5/20/15 on the SP 2134.72.
7/20/15 on the QQQ at 5231.94 also looks the highs for the current cycle. From a trend following standpoint I have been stating repeatedly the situation. My students have avoided a great deal of the recent blood bath. I read an article that Trillions of dollars have already been lost.

Yesterday Jim Rogers Warned

“The Market Knows It’s Over”

“We’re All Going To Suffer”

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Andreas Clenow Trend Following Podcast on Top Traders Unplugged

I want to share this the site Traders Unplugged. I truly enjoy listening…

“Never accept the old-style, blackbox explanation – always understand what is going on.” – Andreas Clenow (Tweet)

In our continued conversation with Andreas Clenow, we discuss the research and work that goes into making his trading model, how he deals with risk and drawdowns, and how he explains his models to potential investors. In this episode, we will dive into how clear and explainable a trading model should be, and what questions you should ask firms before investing in them.
Thanks for listening and please welcome back Andreas Clenow.

trendfolowing

trendfolowing2

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Trend Following the Stock Market Weekend Review

It was a very ugly session on Friday. Closed almost on the intraday lows. Volume was slightly higher than average. It might seem we are in the late stages of a Bull market or early stages of a Bear market. The “FANG” stocks are not holding up well and failing with breakout attempts. Some of the FANG stocks from a trend following standpoint ( breaking 50 Day Moving Averages show complete weakness). This is a tough market to be long. The question is will the recent support hold?

In the meantime GLD is moving up past the 200 day exponential moving average.

Learn how to trend follow via trendfollowingmentor.com

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts, commodity options or forex can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results. You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

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