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One of the tenets I use in my quest to compound money… is not that I just do my own trading, I allocate to other Commodity trading advisors. In this recent conference I discussed how to analyze commodity trading advisors. My goal and my colleagues goal is to compound money over long periods of time. I have not found a better strategy other than commodity trading to help me in this quest. No other strategy…real estate… mutual funds offers the liquidity…transparency …potential for profit as commodity trading. When one allocates to a basket of Commodity trading advisors to some degree they are diversifying their risk. Each Commodity trading advisor has to some degree different trading approaches ( eventhough) they most successful over long periods of time are trend followers. More so when allocating to groups of commodity trading advisors …some managers trade different markets than others. For example I have commodity trading advisor I allocated to that made a great deal of money for us that traded the Russian Ruble. This market was not traded by any of the ctas that I had allocated to. This is why it is so important to be able to discuss and understand how the commodity trading advisor thinks… what markets he trades.. how he manages risk. This brings me to the paramount issue. Risk!. Understand how the commodity trading advisor delinates risk. What is always the most important to me is..

Risk per trade ( not to exceed 1-1.5%max )

Risk per sector

Open trade equity risk.

click below

http://www.moneyshow.com/video/video.asp?wid=4195&t=3&scode-014804

Andrew Abraham
www.myinvestorsplace.com

Futures and commodity trading involve substantial risk.People can and do lose money trading.

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/personal-finance-articles/analyzing-commodity-trading-advisors-1055174.html

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Tagged with: Brokerages, Business, Commodities and Futures, Commodity market, Commodity pool, Investing, Mutual fund, Trade

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July 21st, 2009 | Category: Personal Finance | Comments Off
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