As you may already know, I have made my living as a trader of leveraged instruments in the past. I've always traded my own money, mostly because I didn't have to file regulatory documents or be licensed in some way. However, what I discovered, quite painfully, is that 10% isn't always 10%. That is, 10% of 10,000 is smaller than 10% of 100,000. Follow me?
While surfing, I came across a website with CTA Information. Check it out http://www.cta-info.com/ It's got interesting information about an area of Investing that has been cloaked in secrecy for years. Only recently, in the past 5 years, has Managed Futures been brought out of the shadows so the ordinary investor can learn about these Alternative Investment vehicles. Managed Futures, in particular those practicing trend following strategies, have a tendency to be negatively correlated to stock indexes during down periods, and positively correlated to stock indexes during up periods.
I first heard about these types of accounts when I was reading an article by a member of the Oxford Club, A.C. Green. He wrote about Managed Futures accounts and told the story of the Turtles. This short article changed my life. The story of the Turtles is compelling and inspiring. Since I first read that article, there has been a lot written about The Turtles. Prior to 2001, when I first read about the Turtles, they too were cloaked in secrecy. Since then Curtis Faith (an original turtle) and Michael Covel (an author an turtle historian) have written a great deal about The Turtles, Managed Futures and Trend Following.
The corrosive thread that binds all these super hot traders of commodities, is CTA designation. Most of the big dollar commodity traders are CTA's and they manager other peoples money. This is where 10% is relative.
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