Time Frames In Commodity Trading

InvestorEducation / Learn to Trade Oct 30, 2009 - 04:52 AM GMT

In Commodity trading there are countless answers that need to be answered. The good news…is you get to decide…the bad news is that most commodity traders, stock traders or even forex traders never think of all the questions they need to answer and do not develop a trading plan. If you truly want to succeed in commodity trading you need to develop your trading plan…or you have another choice…look to invest with a commodity trading advisor in which you understand his/her methodology and how they approach risk.

Regardless of if you want to trade on your own ( preferably with a trend following systematic approach) or allocate to a commodity trading advisor or even groups of commodity trading advisors you need to be aware of time frames and preferably diversify them.

The idea of time frame generally refers to the length of time you would expect to hold the trade. One can trade intra day..( & run up large commissions and encounter slippage) or short term…mid term…long term. More so how you do really define each of these periods is up to you?Again the good news is you get to chose. It is all up to you…BUT YOU MUST THINK ABOUT IT. If you don’t you will become another statistic of failed commodity traders.
No one can make these decisions… and you must determine what fits your personality. You must trade in which it is carefree.. Yes.. I truly mean carefree…

I know that I do not know the future..(contrary to CNBC or Bloomberg). I know that even different time frame charts look different.

Personally one of the things that works for me is to simply spread it all out and diversify.

What I do is allocate to other commodity trading advisors that have different time frames… or run multiple time frame models…This gives me some diversification from one of the models I am trading with my colleagues….More so after almost a combined 100 years of seeing virtually every mistake ( between me and my 2 colleagues)… one of the models we trade is multi market.. multi system…and multi time frame… with strong risk management from the trade level…to the sector level…and to the whole portfolio level.

You need to ask yourself …do you really want to have a chance of success in commodity trading or forex … If the answer is yes…then develop a comprehensive plan..realize you need to include a time frame that matches your personality and work framework…Or you have the option of investing with a commodity trading advisor in which you understand what he/she is doing…and allocate to them.

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
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