The TTS Trade Update
We re-entered our Long GDXJ position after the close today after being stopped out last week. Some struggle with getting back into a position that they sold at a lower price, after being stopped out. Here is our view: The process is the process and you either trade a system or you don't. A major component of a systematic trading process is pre-determined price based signals for entries, exits and stops. We know what gets us in and what gets us out of a position. We don't try to predict why or when any of it will happen.
As far as the fundamentals of Gold, gold miners and anything else, none of it comes into play. As I have stated before, it is impossible to know "everything about everything", but price is simple enough to follow if one stays objective. We approach trades as a 50/50 proposition. Some work out, some do not. Many risk controls, position sizing, diversification, industry exposure limits, etc, are put into place to protect downside in any position, and in the accounts as a whole. Stop losses are designed to keep losers small, and holding winners for as long as they keep working has produced some very big gains over time. Once price generates a signal, the trade is sized up, entered and a hard stop is put into the system.
Gettingback into a trade after just being stopped out takes discipline to follow the process. Long time Twitter followers know that our 2016/2017 AMD trade came on the second attempt, our open Micron position came on the third attempt in July 2016 and we re-entered SPY long 3 1/2 points higher the day after our stop out below the 200 day moving average in June of 2016. Not all trades work out, some get stopped out again, and we have our fair share of losers, but they are kept small and cut quickly. The key is to follow the process objectively and consistently, accept that any trade can get stopped out but be prepared for a big winner. Over time, the process executed consistently, works.