Jump to navigation

Free Newsletter Modern Trader Follow

Main menu

  • Futures
    • Modern Trader Magazine
    • Commodities
    • Futures Mag Archives
    • ETFs
    • Financials
    • Forex
    • Managed Funds
    • Market Analysis
    • News
    • Options
    • Regulation
    • Technology
    • Trading Strategies
    • Education
    • Futures Op-Ed
  • Favorites
    • Alpha Pages Most Popular
    • Futures Magazine
    • Modern Trader Magazine
    • Most Popular
    • Slideshows & Lists
    • Special Topics
      • Alpha Hunters
      • Bad Boys
      • FINtech
      • High-Frequency Trading
      • Trader's Life
      • Trading Strategies
      • FUTURES MAG's 500th ISSUE
      • We asked traders
  • Traders
    • Market Data
    • Hot Charts
    • Interactive Charts
    • Trading Calendar
  • FINalternatives
  • Hard Assets
    • Home
    • Base Metals
    • Precious Metals
    • Rare Earth Metals
    • Commodities
    • Mining Investments
    • Slideshows
  • Modern Trader
    • Subscribe
    • Past Issues
  • All +
    • Follow Us +
      • FuturesMag
      • Newsletters
      • Facebook
      • Google+
      • Linkedin
      • Twitter
      • RSS Feeds
    • About Us +
      • About
      • Advertise
      • Contact
      • Contribute
      • Privacy Policy
  • !
Follow Futures          
       
more >>

We Asked Traders

We asked traders for their opinion on the launch of bitcoin futures

Sponsored Content

Trading

Equities.com launches unlimited trading via Tradier Brokerage, Transforming into a news & fintech portal

Featured Topics

more Commodities>>

Commodities

Energy demand steps back in play
Advertisement
more Volatility>>

Volatility

Volatility & opportunity in the energy sector
more Financials>>

Financials

Daily Price Action: E-mini S&P 500
more Options>>

Options

Trading Vertical Option Spreads

The Trend Following Bible

By Desmond Macrae

November 25, 2013 • Reprints

The Trend Following Bible: How Professional Traders Compound Wealth & Manage Risk
By Andrew Abraham

Wiley, 2013
$75.00; 224 pages; E-book $48.99; 224 pages

Normally it’s best to start any book review with a description of what value a book can offer readers, and postpone complaints.  Here, a criticism must come first else readers might quit at the first paragraph, never to see the value Andrew Abraham’s new book offers. He writes in his Introduction that “…in 1994 very few people had ever heard of… ‘trend follower’ or ‘trend following’.” Don’t discard this book because of this egregious historical error or you will miss the good stuff. 

For the record, the English political economist and investor David Ricardo (1772-1823), wrote; “Cut your losses, and let your profits run on.”  Charles Dow (between 1899 and 1902); Edwin Lefèvre  (1923); Richard Schabacker (1932), and Edwards & McGee (1947) all described trend-following fully, as have many others since. 

This book is really an autobiography of Abraham’s professional trading and investing life, not the bible. It should have been titled “My Journey as a Trend Follower,” but authors rarely get to name their books. 

That said, trend followers, and investors who are considering adding trend-following funds to their investment portfolios, can profit from this author’s journey.

The first three chapters offer little that is not already well known about trend following and risk management, but Abraham’s summary of his experience with MF Global is “must” reading.  His advice about using U.S. Treasury Direct and independent money market funds away from brokers should be read, marked, learned and inwardly digested.

Ignore his occasional claims of proprietary ideas in his review of what it takes to be a successful trend follower. Pay close attention to Abraham’s powerful plea that trend followers MUST learn to write testing programs of their own (which he did when he started), or learn to use existing testing programs. He writes that any good testing program will do, adding that he now uses Metastock.

Later Abraham addresses trading psychology, the most important of the three components of trading success; the others being money management and a trading method or system.

We don’t often get to see exactly how a trend follower, or any other kind of trader, operates, but near the end of Abraham’s book, we do. Assuming comparison yields insight, we have a real person with whom we can compare ourselves, which may make this the most important of the 10 chapters.

Alas, this book is set in 9-point type, making it hard to read. The many excellent charts are even harder to see, so use a good magnifying glass. Type in some E-book formats can be enlarged, but alas, the charts seem to remain the same size.

Desmond MacRae is a New York-based business writer specializing in banking, finance and investments. E-mail him at desmondmacrae@nyc.rr.com.

About the Author

Desmond MacRae is a New-York-based free-lance writer specializing in institutional banking, finance and investments.
Related Articles
Fishing With Alternative Data
Here is your free look at the Modern Trader’s annual Hedge Fund Issue
Short-term signals in E-minis, crude and gold
Unemployment drops below 5% but payrolls disappoint
Trading vs. Gambling: The age old question
Previous
The Foreign Exchange Matrix
Next
Opportunities in equity options
Related Terms
finance 1292U.S. Treasury 854banking 475MF Global 379Managed funds 202risk management 180Education 156Trend following 15Charles Dow 15book reviews 14Desmond MacRae 9David Ricardo 5Edwin Lef 4Abraham 2Andrew Abraham 2Richard Schabacker 1

Free Newsletter Modern Trader Follow

Main menu

  • Futures
    • Modern Trader Magazine
    • Commodities
    • Futures Mag Archives
    • ETFs
    • Financials
    • Forex
    • Managed Funds
    • Market Analysis
    • News
    • Options
    • Regulation
    • Technology
    • Trading Strategies
    • Education
    • Futures Op-Ed
  • Favorites
    • Alpha Pages Most Popular
    • Futures Magazine
    • Modern Trader Magazine
    • Most Popular
    • Slideshows & Lists
    • Special Topics
      • Alpha Hunters
      • Bad Boys
      • FINtech
      • High-Frequency Trading
      • Trader's Life
      • Trading Strategies
      • FUTURES MAG's 500th ISSUE
      • We asked traders
  • Traders
    • Market Data
    • Hot Charts
    • Interactive Charts
    • Trading Calendar
  • FINalternatives
  • Hard Assets
    • Home
    • Base Metals
    • Precious Metals
    • Rare Earth Metals
    • Commodities
    • Mining Investments
    • Slideshows
  • Modern Trader
    • Subscribe
    • Past Issues
  • All +
    • Follow Us +
      • FuturesMag
      • Newsletters
      • Facebook
      • Google+
      • Linkedin
      • Twitter
      • RSS Feeds
    • About Us +
      • About
      • Advertise
      • Contact
      • Contribute
      • Privacy Policy
  • !
images