Stop Trying to Be Smart
Let the Trend Do the Heavy Lifting
The Trader’s Journey: From Guessing Turns to Riding Trends
Every trader starts in the same place.
Trying to be clever.
Trying to buy bottoms.
Trying to short tops.
It feels logical. It feels sophisticated. You convince yourself you’re early, that you’re seeing something others don’t. And sometimes, you even get it right. But over time, most traders learn the hard way that being early and being right are not the same thing.
The real journey of a trader is the transition from prediction to participation. From trying to nail turning points to saying one simple thing:
I want the meat of the move — and I don’t care about anything else.
That’s the moment you stop trading like a gambler and start thinking like a trend follower.
Why Bottom Picking Is So Tempting — And So Costly
Bottom picking is seductive because the reward looks asymmetric. If you buy at the lows, your upside appears massive. The problem is that most “cheap” assets are cheap for a reason — weak trends, poor relative strength, bad momentum, or broken cycles.
You’re fighting three enemies at once:
Price
Time
Psychology
Even if you’re eventually right, you’re often early. Early means drawdowns. Drawdowns mean doubt. Doubt leads to bad decisions.
Trend following flips that entire framework on its head.
You wait.
You let price prove itself.
You enter once the market has already tipped its hand.
Energy ($XLE) — Working, But Not Leading
Let’s start with energy.
The XLE chart is not broken. In fact, it’s nearly making new 52-week highs. That matters. But context matters more.
This is a slow, grinding structure. Energy starting to work — but it is not leading. It’s not an area screaming for oversized exposure. This is not where capital is aggressively rotating into right now.
That doesn’t mean we ignore it.
It means we respect what the chart is — and what it isn’t.
Trend followers don’t argue with price, but they also don’t overweight mediocrity.
Gold Miners ($GDXJ) — Strength Begets Strength
Now compare that to gold miners.
This chart is the opposite of subtle. Multi year base. Structural breakout. Strong follow-through. Higher highs. Higher lows. Persistent relative strength.
This is what leadership looks like.
And this is where most traders make their biggest mistake:
They sell what’s working to fund what might work.
Trend followers don’t do that.
You don’t sell winners to buy laggards.
You press what’s strong.
You ride trends until they break — not until they feel uncomfortable.
“Big money is made by being right and sitting tight.”
— Jesse Livermore
Why We Don’t Rotate Out of Winners to Chase Laggards
Energy may move at some point. I believe it will. But belief doesn’t dictate allocation — signals do.
Right now:
Energy has some buy signals
Precious metals have many
That’s why our exposure looks the way it does.
In energy, we own winners:
Shell
Baker Hughes (BKR)
Stock wise: That’s it, compared to our gold and silver stock allocation, which owns… everything!
No broad bets. No heavy allocations. No “it has to catch up” thinking.
If you’re going to step into a lagging sector, you do it the same way you do everything else:
You buy the strongest names inside it.
You don’t buy weakness hoping for redemption.
Risk, Reward, and Why Outliers Matter
This table explains more about successful trading than most books ever will.
Notice something important:
You do not need to win often to make money.
You need favorable risk-to-reward.
Trend followers are not hunting high batting averages. They’re hunting outliers. One 5-to-1 or 10-to-1 trade can pay for dozens of small losses.
That’s why selling winners early is so destructive. You’re cutting off the very thing that makes the strategy work.
Z-Scores and the Search for Extremes
Outlier trades don’t live in the middle of the bell curve.
They live at the edges.
Trend following is about positioning yourself when price, momentum, and participation push into statistically meaningful extremes — and then staying with the move longer than feels reasonable.
Gold, silver, platinum, palladium, miners — these are not one-off trades for us.
They are a theme.
That’s why we hold:
Multiple ETFs
Individual stocks
Futures exposure across the metals complex
We’re not dabbling. We’re participating.
The Moral of the Story
The trader’s journey is not about being smarter.
It’s about being humbler.
You stop trying to outguess the market.
You stop selling strength to subsidize weakness.
You stop caring about calling tops and bottoms.
You start caring about:
Risk to reward
Structural trends
Outlier potential
“Trends persist longer than anyone expects — including the people riding them.”
— Ed Seykota
Energy will have its moment. When it does, we’ll be there — owning the strongest names, with controlled size.
Until then, our job is simple:
Stay with what’s working.
Protect capital.
Let the outliers do the heavy lifting.
That’s not just a trading strategy.
That’s the end of the trader’s journey — and the beginning of consistency.
Against All Odds Research
Stay Connected:
YouTube: Against All Odds Research Channel (@againstalloddsresearch)
Twitter: Jason P (@jasonp138)
Substack: AAO Research
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Great lesson!
Well said!
"The trader’s journey is not about being smarter. It’s about being humbler."