Commodity futures trading was the second-worst performing strategy this year. So what does that mean for trend following? Does one who invests in commodity futures trading need to make profits every month or is it more important to make money over a long period of time? Commodity trading advisors and in general commodity futures trading are down to a lack of clear trends in markets.

Again who says there must be trends all the time? The way a clever commodity trading advisor looks as this a buying opportunity because, statistically, money-making trends are likely to reappear.

After periods of congestion or trendless markets,many times are followed by breakouts both up and down. Foolish investors who are trying to chase last years returns, ( Commodity trading advisors as well as generally commodity futures trading were the stand-out performer in a 2008 for hedge funds, in which the average strategy lost 19.07 percent according to Credit Suisse/Tremont.) give up on the strategy and loss money. Time after time you can see commodity trading advisors who rack up large money under management during the good times only to give it back when reality sets in and choppy markets reappear.

The key to successful trend following is patience…and discipline. For those that do not have these characteristics should not invest in commodity futures trading.

Andrew Abraham
www.myinvestorsplace.com

Andrew Abraham has been in the financial arena since 1990. He is a commodity trading ddvisor and co manager of a Commodity Pool. Since 1993 Andrew has been a proponent of quantitative mechanical trading programs. Andrew's major concern is not only total return on investment but rather the amount of risk that one would have to tolerate in order to achieve returns He focuses on developing quant models that encompass strict risk adherence and correlation. He has been a speaker at conferences as well as an author of numerous articles. Andrew has spent years researching ideas that have the potential to outperform indices as well as maintain fewer draw downs.

Visit Angus Jackson Partners (http://www.angusjacksonpartners.com) Contact: A.Abraham@AngusJackson.com (mailto:A.Abraham@AngusJackson.com)

© 2009 Copyright Andrew Abraham - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.