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.
Trading mistakes are common in commodity and forex trading. I became involved with my partners in order to learn from the mistakes of other commodity traders (and plenty of my own mistakes). In my opinion after being involved in commodity trading and trend following the basis of trading mistakes all boil down to three issues.
1. Fear
2. Greed
3. Ego.
So many issues in trading are against our own human nature. A simple example is that commodity traders risk their hard earned capital on a trade. Isn’t it logical that if you put your hard earned money in an idea… you would expect it to work and make money…otherwise why would you risk hard earned money? You believe that the trade will make you money..that is why you put it on in the first place, Right?
Wrong… just because you put on the trade..it does not have to work.. Too many a trader do not sell and take a quick loss because they think they are right.. Guess what…The only thing that is right is to follow your plan with discipline and patience.
The real crux of successful commodity and forex trading boils down to how you think. Emotions such as the above mentioned can destroy ones commodity trading career. I have seen it… I do this everyday except Saturday and Sunday. I live it…
Here are some simple examples of mistakes that I have seen commodity traders make.
1. The commodity trader exits a trade early. He does not follow his plan…or mechanical trading system. He has a small open trade loss which has not gotten to his stop loss and because of fear ( maybe ego)… he exits prematurely and does not let the trade either get stopped out or work.
2. A commodity trader quits trading during a draw down ( probably right before a nice rebound). I have seen investors in commodity trading advisors quit and blame the commodity trading advisor & say that trend following does not work any more ( FEAR). Shortly their after if they had stayed in with the commodity trading advisor their account would have rebounded and they would have continued to compound their way to wealth. Draw downs are all part of this. More so the greatest draw down is always ahead of you.
3.I have seen commodity traders take profits and exit before their stops have been hit. They over ride their plan or mechanical trading system because they are afraid of giving back an open profit. One of the major tenants of trend following is LET YOUR PROFITS RUN!. These traders miss the big moves because of a combination of fear …or maybe greed.
4.I have seen traders not take a loss when they should of. Again they over ride their plan. Maybe out of ego…they do not want to accept they were wrong and the trade did not work. Worse.. I have seen commodity traders insist they are right and add to their losing position. Doing things like this are the seeds of destruction of a commodity trader.
Really I can keep on going…but in order to succeed…one needs to park their emotions and let the market tell them what to do. This is the whole basis of trend following.
So what is the point here… if you want to succeed in commodity trading, you have choices.. you can learn and trade yourself. This takes tremendous work and commitment. I know.. I have been there…If you are committed…develop a plan…you follow it with patience and discipline you stand the chance of succeeding over time. Another alternative is to allocate to a commodity trading advisor that has done the work and learned what has the chance of succeeding overtime.
You must understand how the commodity trading trades…and probably more important how they think about risk and money management. I trade with my colleagues which reinforces the needed discipline and patience…as well as allocate to other commodity trading advisors. Finding the right commodity trading advisor is surely not easy. However an initial four quick questions you can separate the potential successful commodity trading advisors and the want to bes..
1. What is their risk per trade
2. What is their risk per sector
3. What is their total open trade risk
4. What is their margin to equity..
Ask these questions…know what you are comfortable with. I wish you much success in your commodity trading career.
Andrew Abraham
A.Abraham@AngusJackson.com
www.AJpartnersinc.com
www.myinvestorsplace.com
Futures trading involves risk. People can and do lose money
- Related Videos
- Related Articles
- Ask / Related Q&A
- Currency Trading - He'S Just Not That Into Forex Day Trading
- Using Currency Forex Online Trading Software - Is it the Right Currency Trading Strategy?
- Making A Killing With Forex Day Trading
- Currency Trading - Are You Really Into Forex Day Trading?
- Forex Currency Trading - How Does it Work?
- Forex signal trading gives the traders one more analytical tool
- Introducing the Forex Currency Trade
- Forex Currency Trading Explained for Beginners




Guidelines For Proper Personal Budgeting
By: acicoinvestments.blogspot.com | 05/12/2009The aim of budgeting is to look into your finances in a wholesome manner taking into account your income, expenses, savings, investments and come up with a good plan that successfully meet your needs.....
Personal Finance Planning
By: Sourav Sharma | 05/12/2009Managing your spending, creating a mental picture of what you have spend instead of recording the same may often make it complex to maintain a perfect budget. In such a case, personal finance planning holds key importance.
INFLATION INVESTING: Protecting Your Buying Power!
By: Jason S. Valavanis, CFP | 05/12/2009With an additional $9 trillion filtering into circulation between 2008 and 2016, the United States economy will suffer a series of dreadful blows not seen since the spooky Nixon and Carter years. In a panicked attempt to keep our economy from imploding, Bush and now Obama have opened the money gates. With spending bill after spending bill getting passed, Congress has initiated a dollar-splitting campaign that will eventually deteriorate the buying-power of the American people.
ARE RECESSIONS A GOOD IDEA? Thoughts that may make you scream!
By: Jason S. Valavanis, CFP | 05/12/2009Economies get hot. When economies get too hot it results in irresponsibility. Individuals, families, corporations, and the federal government can all get hooked on the juicy cash flow that seems everlasting. It is almost like financial heroin. Extreme spending, gluttonous borrowing, and superficial wealth will run rampant in an economy riddled with zealotry.
SUPPLY EXCEEDS DEMAND: Beware of Stock Market Prices
By: Jason S. Valavanis, CFP | 05/12/2009Like any market, supply and demand will govern prices and how well the product sells. This still holds true for our beloved stock market. I say “beloved” cautiously because many of the new clients I meet have seen their nest-egg slaughtered by their stock broker, literally. Here, I outline the warning signs of investing.
ATM'S are convenient but should the fees be so hi?
By: Paul Ingersole | 04/12/2009One thing that will help determine if you should use a particular ATM machine is not just the location. If you use an ATM machine put out by your bank, it will help you save money. This is because ATM machines that belong to your bank usually don’t have a fee.
Are All Novice Real Estate Investors Seeking a Get Rich Quick "Fix?"
By: Megan McGinnis | 04/12/2009What's the allure of real estate investing? Why are so many people drawn to this field as a means of creating a second income? I think this is so primarily because it is sold as a get rich quick scheme. Have you ever been to a real estate "seminar" where the presenter shows testimonial after testimonial of one of their fix and flip students bringing home a $20,000 paycheck on their first deal or maybe even a $100,000 paycheck?
Personal Loans For Poor Credit To Meet Unforeseen Expenses
By: Alan Lim | 04/12/2009There are times when we have to incur unforeseen expenses that spoil our budget and we have to look around for loans. It is possible to procure personal loans for poor credit during times of crisis by searching on the right websites on the Internet.
Investment Fraud after Investment Fraud
By: Andrew Abraham | 04/12/2009 | FinanceSo many thought all the investment frauds would have ended already. However more and more have come to light
How Should You Invest in 2010?
By: Andrew Abraham | 03/12/2009 | Personal Finance2010 is fast approaching. I have had conversations with colleagues..and the issue that was brought up so many times was 2007-2009 just a fluke or the beginning of something more serious. As usual... I told them to their discern I do not know the future. However in all reality... if we ran our personal households how the central banks and banks ran their portfolios we would be living on the street and I feel there will be a price to pay.
November 2009 Commodity Trading Advising Trend Followers Results
By: Andrew Abraham | 02/12/2009 | InvestingWill the last 2 months of 2009 make the year for trend following commodity trading advisors or will it be one of those lack luster years? It reminds of a football game and we are in the last quarter with only a few minutes left. The truth though is that trend following commodity trading advisors might not score...and have a good year.
Research in Commodity Trading
By: Andrew Abraham | 30/11/2009 | InvestingThere are those in the camp that successful commodity trading can be achieved from research. Honestly I am in the camp of being a trend follower…having no opinions..and simply reacting to price with a strong focus on risk.
How To Invest in a Commodity Trading Advisor
By: Andrew Abraham | 29/11/2009 | InvestingMaybe it is human nature… maybe it is a lack of patience or discipline…or the new word courage…why do so many lose money when investing with legendary Commodity trading advisors? I have seen it over and over again.
Is This The End of The Stock Market Rally?
By: Andrew Abraham | 27/11/2009 | InvestingThere are really no isolated incidents in the world. Today we are waking up to the news that Dubai might be defaulting on its debt. Stock Markets around the world are plummeting. There are many other issues that hardly made the news.
Why Is The Price of Gold Moving?
By: Andrew Abraham | 26/11/2009 | InvestingIf you think...that I or anyone else really know why the price of gold is moving...you will need to find another article. Guess what...everyone has opinions..The fact however is that the price is going up...and that is why virtually every trend follower ...every commodity trading advisor has purchased gold.
Courage and Knowledge in Commodity & Forex Trading
By: Andrew Abraham | 24/11/2009 | Currency TradingYesterday I had an interesting conversation regarding courage and knowledge in commodity & forex trading. If you have been reading my blog you probably know my favorite two words for success in commodity trading are...Discipline and Patience..