While we commonly talk in this space about what to do when staring losses in the face, less time is spent here and elsewhere talking about what to do when you have had success with a program. Perhaps this is something to do with the human condition and focusing on that which causes us pain before considering that which brings us pleasure, or perhaps it is just a simple case of most investors thinking the upside is easy to manage when compared to the downside.
Disclaimer: The above chart is meant for illustrative purposes only, and is not representative of trading in actual accounts.
Whatever the case, there have been some questions from Attain clients recently asking what they should do with gains in some programs, and, specifically, what their options are for scaling up the trading of the successful programs in their portfolios.
Now, many futures traders and commodity market investors have no doubt heard of the various money management techniques out there which, in one way or another, add to a position when that position is profitable. This technique is sometimes called pyramiding, pillaring, or margin scaling/trading. The basic idea behind it is to use the â€śmarketâ€™s moneyâ€ť to add to positions. What happens when this gets applied as a managed futures allocation strategy? Youâ€™ll have toÂ click through to find out.
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Forex trading, commodity trading, managed futures, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors.
The entries on this blog are intended to further subscribers understanding, education, and â€“ at times- enjoyment of the world of alternative investments through managed futures, trading systems, and managed forex.Â Unless distinctly noted otherwise, the data and graphs included herein are intended to be mere examples and exhibits of the topic discussed, are for educational and illustrative purposes only, and do not represent trading in actual accounts.
The mention of asset class performance is based on the noted source index (i.e. Newedge CTA Index, S&P 500 Index, etc.) , and investors should take care to understand that any index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices:Â such as survivorship and self reporting biases, and instant history.
Managed Futures Disclaimer:
Past Performance is Not Necessarily Indicative of Future Results. The regulations of the CFTC require that prospective clients of a managed futures program (CTA) receive a disclosure document when they are solicited to enter into an agreement whereby the CTA will direct or guide the clientâ€™s commodity interest trading and that certain risk factors be highlighted. The disclosure document contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA.
Copyright Â© 2011 Attain Capital Management, licensed Managed Futures, Trading System & Commodity Brokers. All Rights Reserved. Reprinted with permission.