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Major Profits for Commodity Futures Trading In a Crisis

Commodities / Commodities Trading Jul 05, 2009 - 10:31 AM GMT

By: Andrew_Abraham

Commodities

Every crisis has created major profits for commodity futures trading. When utilizing a Trend Following strategy a commodity trading advisor makes himself ‘available for oppurtunities”. Most of the time in commodity futures trading nothing happens. Interestingly enough, really nothing has to happen. However in commodity futures trading history virtually all of the crisis of the world have generated LARGE profits for commodity trading advisors. All one has to do is look at last years economic collapse.


Many trend following commodity trading advisors did not just make double digit returns but some even made triple digit returns. It all depends on how much risk any particular commodity trading advisor wanted to take on. Some examples of commodity futures trading history are the collapse of LTCM, the implosion of the British pound, the first Gulf War, the natural gas/electricity California debacle,the Asian crisis in 1998, Barings, and even 9/11. There are always these economic storms. So many other strategies and investors were wiped out in these crisises, however trend following commodity trading advisors ( that probably many have never heard of) made fortunes.

Why did the the trend following commodity trading advisors make money while the likes of George Soros,Everest capital,III advisors lost hundred of millions of dollars ( some like Soros 2 Billion dollars) in the Asian debacle in 1998.

The reason trend following commodity trading advisors made money was they had a plan and many times these trend following commodity trading advisors were all ready on a trend that was starting before the big move. This is how it works. Trend following amounts to making alot of small bets that usually do not work and once in a while commodity trading advisors stumble on to some major trends and make a fortune.

History is full of these examples. When the next crisis will come is anyones guess…but what is more than certain commodity trading advisors who trend follow will catch the big moves.

The holy grail of trend following:

Patience and Discipline- Make yourself available for the next major move.

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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