Any Trade With a Stop Is a Good Trade
There was one change that improved my profitability as a trader and had more impact on my account and my life than anything else I’ve ever done. That was my decision in 2022 to stop allowing negativity and pessimism to form my beliefs. Instead, I chose to constantly find something to be bullish about, get long, and let price show me when I was wrong.
My initial foray into the stock market almost 20 years ago was not a profitable endeavor, partly due to the fact that my desire for wealth was greater than my skill in attaining it, but largely due to my persistent negative mindset. In retrospect, I can see now what I could not see then: my beliefs were not aligned with winning.
I was reminded of my old habits recently while talking with friends who insisted their money troubles were due to “the system” being set up against them. I certainly won’t dismiss their valid concerns about the systematic devaluation of our money, but as I pointed out to them, gold has already compensated us for the risks inherent to our fiat currency system.
While, in general, I sympathize with their feeling that the necessities of life are becoming less attainable due to “the system,” what I find far more problematic to their particular situation is a negative mindset, a belief that gaining wealth is impossible, which leads to behaviors that ensure that it is. Once you believe you can’t, you’ve ensured you’ll miss all the opportunities that prove the contrary. I recognized immediately my own former limiting beliefs in their expression of concern.
When I believed the system was aligned against me, I traded like it. I took small wins out of fear the market would take them back. I allowed losers to take up long term residency on my position statement because I was certain with a little more time I would be proven correct. I was trading poorly, like someone with all manner of insecurities and unhelpful attitudes towards money and that views themselves a victim of forces beyond their control. Belief is a powerful force that can allow you to see the positive or limit your mind’s eye to only seeing the negatives life brings your way. For reasons I’m still trying to pin down in my middle aged years, my former beliefs in my youth had created a negative bias through which I viewed the world and my trading.
With such a negative bias, I wasn’t able to see the market for what it is: an endless stream of opportunities waiting to be exploited and a means to a better life. The way out of this negative bias is simple but not easy; it comes down to a choice each of us, as traders, must make for ourselves. I had to make the choice to trust in my ability to consistently show up, wait for setups I recognize, get in without hesitation, and get out without regrets.
Of course this approach required an immense amount of study and practice before I was able to deploy my approach at a large enough scale for professional speculation. My study included analyzing thousands of my trades over many years. The main takeaway from my analysis is this: stops keep my account in tact. I need my account near all time highs to aggressively allocate to whatever trend I find developing. There is only going to be one, maybe two big trends a year that I can take advantage of to pump my account to new levels. There will always be uncertainty as to exactly when a new trend is developing, but with stops, I can limit my risk of loss and try repeatedly to get into what I think is a developing trend. But what is the next trend? All my analysis leads me to conclude that the underlying forces that will create the next trend are building underneath the surface level of index prices we see on the tape.
It’s still my view that we are in the contraction phase of the business cycle, and because of this, we should see economic and inflation pressure subside within the next three to six months. That should bring down the long end of the yield curve, but the market doesn’t agree with me right now. I’m not fighting it. I’m letting my analysis of price structure take me out of a losing trade with TLT. Was it a bad trade? Absolutely not. I followed my plan exactly, and I did it in the appropriate size, which has always been my weak spot. As long as I follow my process, I’m not going to get overly concerned about losses. New opportunities will come, and having the confidence to move aggressively when I see a setup I recognize is what will get me in a good trade. For TLT, I’m out with a small loss, but I’ll keep stalking this for a better setup to get long when the market is more agreeable to my view.
My account is still within a stone’s throw of all time highs, and I plan on keeping it there. Until I take them out and spend them, the dollars in my account are simply ammunition in my armory that will be needed for battle. A big trend that will pump my account to a new level will come. That’s what the market promises, that prices will always move. When the forces align that move prices in a trend, that is the time to engage in battle.
Until that time, I’ll defend my account with small skirmishes that are required to not take any more losing months this year. March was my only down month, and that was due to TLT as well. I’ve had to sell off my positions in fertilizer and energy stocks to offset my loss in TLT for September, but I’ve done so after concluding that locking in good gains is more important than positioning for me at the moment. Currently, I’ve got only my core gold miners position, and a long term hold in EPD which both add up to 25% of my account. The other 75% is in “cash” which includes T-bills and a money market, each earning about 3.5%, while I wait for the next trend to develop.
Like most traders, I’m processing all the information my brain can handle and trying to place it into an overarching narrative to understand how to think about where I’m going to allocate for the next trend. The process is difficult with so much information warfare to sift through, but I believe it is possible to create a coherent understanding of what is happening and how to position our accounts for high probability outcomes. Here is my current understanding in its entirety of how we got here, where we are, where I think we are going, and how I’m trying to position my account:
The 2008 crash attempted to correct a hyperfinancialized US economy but was thwarted with the QE era
The QE era from 2012 to 2022 prevented a much needed write off of misallocated capital, hyperfinancialization of the US economy persisted
QE era allowed financial asset prices to reach absurd valuations that are still with us, created entirely new financial asset classes, such as crypto, that may not have existed otherwise
The central bank support for financial asset prices allowed flawed investing methodologies like passive indexing to flourish, proper capital allocation and the skills associated with it atrophied in the financial profession
Passive indexing adopted by institutional money because it is easier than analysis. Passive has had an outsized influence on price discovery, real capital allocators have lost any sense of what appropriate valuations ought to be, no real price signals from the market
Without proper price signals of their company’s equity, captains of industry have been mislead about the effectiveness of their strategies, as a result, much deterioration in the underlying businesses has resulted
This deterioration in underlying business value compounds the absurd valuation problem, this problem will be made evident as more companies required for national defense cannot produce without “permission” from China
The imperative to produce for national defense at any cost has led to an internal “civil war” amongst the ultra elite, or the DC uniparty, uniparty has split into two factions: one that wants the current China-dependent system to perpetuate to maintain corporate profits (think “Apple”) and one that wants to separate supply chains from China to ensure the survival of the Republic (think “Anduril”)
The tensions amongst the ultra elite are made visible when we see their battle with each other spill into the public arena with events like: tariffs and trade negotiations, blockading of the Strait of Hormuz which is a vital trade route for Chinese consumption
US Treasury support of FX markets to prevent a flow out of US financial assets
US Government taking equity stakes in public equity like INTC
Proposed or successful acquiring of natural resource assets like Venezuela, Greenland, or Canada as the 51st state
US’s inclination and/or ability to act as global trade enforcer over sea lanes in Iran and arable land in Ukraine comes into question due to defense companies’ inability to produce
Europe has to spend more to re-build lost defense capability that they outsourced to the US
Europe’s spending is driving up European bond yields as they are required to borrow more
At the same time, US yields are being driven up by increased demand for capital to build out the AI infrastructure that policy makers are relying on to usher in the next phase of growth
At the same time, Japan, which has little need to borrow as their domestic savings are vast, needs to incentivize savings to come back to Japan, their corporate sector needs access to capital to compete with China’s manufacturing capability
The US wants Japan to “merge” with our balance sheet so we can “friendshore” our manufacturing capability , acts as a stop gap until we can rebuild our own capability which will take at least a decade
Merging of the US and Japanese balance sheet would go a long way in adding productive assets to our revenue generation capability , lowers our debt burden
But if Japan re-shores its capital too quickly, the yen-carry trade will unwind violently and cause a crash in financial assets globally, including in the US.
If the Federal Reserve tries to counter a financial asset price crash with QE the already contentious political climate will fracture completely, as even those at the lower socio-economic rungs of US society are justifiably convinced that their money problems are the fault of the Fed. Supporting asset prices with QE would also prop up shadow banks (non-bank lenders like private credit and foreign banks) that are in control of the eurodollar system.
The proliferation of the eurodollar system and interconnectedness of the global banks has given the shadow banking system that operates outside US regulation effective control over US interest rates and the maturity profile of US debt
The “Anduril” faction of the ultra elite want the Fed to take back control of interest rates and raise them to draw global capital to the US
The “Apple” faction want less pressure on China and want Fed to lower rates to keep their cost of capital low and profit margins high
A compromise proposed by Trump’s economic advisor, Stephen Miran, is a UST backed stable coin issued to holders of dollars outside the US that would replace the eurodollar system
This would allow the Fed to lower rates inside the US, while still keeping rates high for foreign users of dollars, foreign holders of dollars in stable coin form get paid higher interest rates, that would attract global capital into UST backed stable coins and act as a source of demand for US Treasuries
GENIUS Act of 2025 lays the groundwork for this
The shadow banking lobby doesn’t want a UST backed stable coin, that would eliminate their low cost source of funding in the eurodollar market, shadow banks would have to sell assets if their funding cost goes up
This is where I believe we stand today, and at some point, someone has to lose. I think it will be the faction that wants everything to stay the same as it is. That means the shadow banking faction has to lose, and China would have to be issued stable coins instead of keeping all their dollar payments from Apple (et al.) in Hong Kong and recycling them back into US financial assets.
As shadow banks lose their influence, the maturity profile of the US debt will be allowed to return to normal. Shadow banks prefer more liquid short term US debt as collateral to borrow against, so their dominance forces the US Treasury to issue shorter term paper. Long duration USTs are in short supply and undervalued. That’s why I’m bullish on TLT and looking for another opportunity to try for the long side. After two failed attempts in 2026, I’m hoping the third time is the charm.
As part of the new monetary system Scott Bessent is trying to usher in, gold will likely be revalued much higher in 2028 to accommodate the US government spending that will be required to offset the loss of Chinese buying of US financial assets, but I think gold is headed to $3,825 this year before a revaluation much higher. I think all the gold that is supposed to be in Fort Knox is there, and Bessent has an idea how to incorporate it into a new system that works for the US and our trading partners, but it will require Federal Reserve balance sheet expansion and a gold revaluation to compensate.
If the shadow bank faction loses and the US regains its ability to produce, we could see both a crisis for current financial asset holders and an opportunity for those who want to own assets at cheap valuations. Being in 75% cash, I’m in the latter group, and I intend to aggressively deploy my capital when the time is right. I have no idea when that will be, but I trust it’s coming. After all, the market is an endless stream overflowing with opportunity for those who are ready to seize it. Those of us who choose to keep a positive mindset will see the opportunities before others. We’ll make mistakes along the way, but that is what stops are for.
Lastly, a word of caution: please do your own research before placing a dime of your hard earned money into this market. Everything I write can only be considered as data for your own analysis. Nothing you have read here is investment advice, which is personal to your own circumstances that you should discuss with a trusted advisor. I am a speculator, and I take risks with my own capital that I would NEVER suggest others to take.
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By: Patrick G. Full-time independent trader in Atlanta, GA.
Patrick G is a full-time trader. Worked for a decade in a money management firm as a trader for high net-worth individuals.
He invested his and his family’s net worth into gold and mining stocks before the Covid money printing. Gold and commodity runs of the past 3 years allowed Patrick to trade full-time due to his gains.
Past performance does not guarantee future results. Trading involves significant risk of loss, and individual results vary. Positions mentioned are the author’s own, disclosed for transparency — not individual investment advice.
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