Posts Tagged ‘commodity’

Doing the Hard Thing In Commodity Trading!

November 4th, 2009

Too many books and blogs seem to make commodity trading and forex trading seem so easy… The truth can not be further from this…Successful trading is so hard… It is a truly a mental battle..There is no easy money in commodity trading….. You earn it..( that is if you truly want it ). There is only one person that can control your success… that is you.. Regardless if you trade yourself…or if you allocate to a commodity trading advisor. The end of the day..You are responsible!
Too many people think the commodity markets and currency markets are exciting and fun. They forget that these markets can be cruel and ruthless to a trader that does not have a well thought out plan. Again…what I have stated over and over again is that most forex and commodity traders fail. Probably over 90%. You have a choice.
Look at these examples below and if you have been trading without a plan…you will see the mental anguish that one could go through!

1.Your trend following mechanical trading system gets a signal to go short corn. However you read in the papers that Jim Rogers has just announced that he has bought the mother load of corn and expects it to go through the roof. What do you do?
1.Sell anyway
2.You buy instead
3. Do not take the signal and wait for the next

2.Your trend following mechanical trading system gets a signal to go short the SP 500 but it gaps down the limit.
What do you do?
1.Sell anyway
2.You buy instead
3. Do not take the signal and wait for the next

3.You are short Gold ( yes short gold) and the market reaches your exit stop. You are using a mental stop btw. You read on your charts that the market is overbought and you think for sure the gold market will turn. What do you do?
1. Follow your trading plan and cover
2. Wait because you think the market will turn.

4. You invest with a commodity trading advisor who has a 4 year record of 20% + per year with draw downs of 15% max. This year is a rough year for virtually all trend following commodity trading advisors. You see your monthly NAV and see your commodity trading advisor is down 19%. What do you do?
1.Stick with him as you know the greatest draw down is always ahead of him.
2. You sell and run for the hills.

The above are common stories that I have seen repeatedly in real time..and in real commodity trading.

What is the right thing to do?
The right thing to do is realize all of these situations ahead of time. They will surely occur. Have a plan..Follow your plan..Believe in your plan. Test your plan..and most of all have the discipline and patience to compound your way to wealth. The wealth you will earn…you will have worked for. Commodity trading is HARD. You will have earned this money.

Andrew Abraham
A.Abraham@AngusJackson.com
www.AJpartnersinc.com
www.myinvestorsplace.com

Futures trading involves risk. People can and do lose money

My name in Andrew Abraham. I have been investing in commodities and managed futures since 1994. I am a commodity trading advisor/co manager of a commodity pool who adheres 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 us apart from other Commodity trading advisors and commodity pools is that we are not only concerned about the return on investment but how much risk you will have to tolerate to achieve your goals.

Article Source:http://www.articlesbase.com/wealth-building-articles/doing-the-hard-thing-in-commodity-trading-1417659.html

Comments Off »

Posted in Build Long Term wealth

Tags:

Is The Stock Market Starting to Fail?

November 3rd, 2009

The proverbial question is we in a V shaped recovery or a Bear Market Rally. Without predicting (One word every true trend follower hates) there are signs becoming apparent the stock market rally from March might be coming to an end. There are technical indicators which are pointing to weakness as well as recent economic figures are beginning to disappoint investors hoping for a recovery. The stock market is down approx 5 percent from its 2009 peak of 1097.91 on Oct. 19. What more so troubling is that the SP 500 index is below its 50 day moving average. The 200 day moving average is currently at 981. A break below this number would be considered very negative. More so there have been distinct divergences between current price action and numerous momentum indicators.

Besides the technical’s there are the fundamental issues…such as the Commerce Department figures released on Oct. 30 showed Americans cut spending in September, the first reduction in five months. Foreclosures are increasing…unemployment has been increasing. Simple question… how can companies be making money…people are spending less… people are losing their homes… people are losing their jobs? It is pretty obvious to question this rally as so many have.

However Obama has come out with his recent radio address.. “We have made progress”!

Maybe I am missing something but I do not understand what progress…except as trying to convince people we are out of the woods.

Paul Tudor Jones has come out very loudly and stated that the rally since March has been a Bear Market rally. As well Christopher Wood, chief strategist at CLSA Ltd has told his readers after Friday’s action to go short the US Stock Indices. Nouriel Roubini is sounding much more of the profit of doom again.

Trend followers do not make predictions. This is not my goal but the green shoots are looking very unhealthy and the ramifications can be very hard for stock market investors. When commodity trading and investing it is paramount to have a plan and have the discipline to stick with it. There are too many investors who bought this stock market rally without a plan. Trading without a plan can destroy a portfolio.

Futures Trading is Risky. People Can and Do Lose Money

Andy Abraham

Myinvestorsplace.com

AJPartners.com

My name in Andrew Abraham. I am a commodity trading advisor – co manager of a commodity pool who adheres to the philosophy of trend following.

Article Source:http://www.articlesbase.com/wealth-building-articles/is-the-stock-market-starting-to-fail-1414164.html

Comments Off »

Posted in Build Long Term wealth

Tags:

Second Guessing Commodity Trading Systems

October 26th, 2009

Mechanical trading systems used in commodity trading if followed with discipline and patience can assist one in their quest for long term success. Many of these systems are based on trend following. One of the most positive aspects of mechanical commodity trading systems is that it helps commodity traders control their emotions ( or at least it should)
Mechanical trading systems accomplishes this by automatically placing your buy and sell orders based on the parameters determined by the system. BUT….
Too many traders start second guessing their system at the first sign of a draw down or if they have an opinion opposite their analysis.
Has this been you?  Let’s say that based on your analysis, you feel gold is going to rise. Your system, however, will not generate a buy signal for gold.

Just as you thought, gold rises. You feel that you were right and start to get frustrated, and possibly even angry. You were right, the system was wrong.
What you forgot, were all those previous times when your system was right and you were wrong. Second guessing your trading system can only lead to aggravation. You are using a mechanical trading system based on the fact you tested out ( or should have ) an idea. Your back tests proved the concept…so why look to start deviating? This is one of the quickest ways to lose confidence and money.
The real fact is very simple..sometimes your system will be right and you will be wrong. Sometimes you will be right and the system will be wrong, and other times you and your system will be right. The fact to realize is that any trade means absolutely nothing. Your money will be made over a series of many trades.
If you really want to succeed long term in commodity trading is that you do not try to outguess your mechanical commodity trading system.

In your quest for success it would be worth your time reading Mark Douglas. He is an authority on the psychology of trading. In one of his books he states “Systems aren’t designed to give you isolated signals of an opportunity to be taken when it seems right. What they do is mathematically define, quantify, and categorize past relationships in collective human behavior to give you a statistically probable outcome for the future.
As I have stated over and over…one of the keys to long term success in commodity trading is Patience and Discipline. Outguessing your commodity trading system is the opposite of discipline.
If you have commodity related questions please, feel free to contact me. I will be happy to answer your questions to the best of my ability.

Send For Our Free Report- The Right Trading System Changes Everything: Just fill out the form in the upper left corner.

Andrew Abraham
A.Abraham@AngusJackson.com
www.AJpartnersinc.com

Futures trading involves risk. People can and do lose money

My name in Andrew Abraham. I have been investing in commodities and managed futures since 1994. I am a commodity trading advisor/co manager of a commodity pool who adheres 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 us apart from other Commodity trading advisors and commodity pools is that we are not only concerned about the return on investment but how much risk you will have to tolerate to achieve your goals

Article Source:http://www.articlesbase.com/wealth-building-articles/second-guessing-commodity-trading-systems-1380950.html

Comments Off »

Posted in Build Long Term wealth

Tags:

Powered by Yahoo! Answers