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Gold update

Semis

Exited too early

I got an email the other day from one of the trolls criticizing me for exiting too early on the oil trade. Seriously I can’t make this s**t up.

Folks we did 80% on that trade in a little over 2 months. And this fool is freaking out because we didn’t catch every last penny.

After a monster rally like that what are the odds that we could make another 80% by letting the trade continue to run? Probably not good!

What are the odds that we would get caught at the top and end up giving back a chunk (maybe a big chunk) of those exceptional profits by being a pig and holding too long? Probably pretty high.

This is how dumb money thinks. They can’t buy at bottoms and then they hold too long at tops. It’s why people like this rarely ever make any money. And when they do they usually just give it back on the next trade. These are the kind of people that get caught at the top of a bitcoin bubble because they need to catch every penny. They can’t control greed.

The correct strategy was to take profits as oil neared major resistance at the 200 DMA. Maybe price gets turned back down at that point, or maybe it goes through and there’s more upside. Unfortunately without a crystal ball there’s just no way to tell in real time. But seriously, at 80% who cares whether there’s more?

These fleas would never email me in real time and tell me I’m too early. They wait until they know the result before they risk a call. Hell I can make perfect calls in hindsight too. It’s easy, I could do it with 100% accuracy from the first day I started trading.

The correct strategy was to take that 80% profit and be happy (control greed) and then wait for the next setup that had the potential to produce another big win. IMO that setup is going to come in the metals. They’ve been in correction mode for several weeks. They maybe forming a triangle continuation pattern. In this sector, even though we may have to wait a bit for the setup to materialize, the potential is there for another 50-80% profit. On the other hand the potential for another 50-80% in energy is slim at this point. And the potential for giving back a chunk of our nice gains is too great. The trade is mature.

This is how I trade. It’s why the stock portfolio is up over 250% in the last 3 years and the metal portfolio is up over 400%. I don’t get greedy when the odds start to stack up against me. When the odds are heavily in my favor and everyone else is predicting nothing but more losses that’s when I’m greedy. After making 80% in 2 months I’m happy to go on vacation for a few weeks and wait for the next setup.

Challenge results for March

  1. Allan H. +116%
  2. Mustang Sally +90% But taking a large drawdown
  3. Dale S. +87% but currently taking a large drawdown
  4. Micheal G +81% but taking a large drawdown
  5. Gil N +74%

The SMT portfolio is still in the hunt with +43%.