Yesterday 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…

However the idea of courage & knowledge puts a new light on the subject. The idea of knowledge, one can acquire either by learning or buying…But does that really make them a better commodity trader? However…I think it gets to a point of having too much knowledge. It really boils down to if the price moves up or down. With all the knowledge in the world..if the price does not move…oh well..So in the short of it.. I am not a big believer of increased knowledge will increase trading results. However there must be the basic knowledge of risk management…having an exact trading plan …and this comes from having a mentor….or simply experience.

The other word courage is a different story. You can not buy it…maybe you can learn it…but I assume you either have it or not. You can not succeed without courage..Maybe there is a fine line between discipline and courage..The fact is that big moves are rare and if you do not have the discipline or courage to stay with the rare big moves…you probably will not succeed as a commodity trader. This is one aspect of courage or discipline… the other aspect is that one must have the courage or discipline to exit a trade that is not working.

Sadly most commodity traders are not interested in these important issues… They seek new indicators…or mechanical trading systems etc… however one of the real keys to success is how you the trader or if you allocate to commodity trading advisor really think…When I allocate to other commodity trading advisors…this is what I seek.. I want to understand how they trade…but more so how they think…I do not believe there is any secret system…it all boils down to when there is one of these rare moves… how does the trader think…do they have the courage…the discipline…the patience..

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.

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13 Dec 09, 01:39

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