While reviewing my investment memo on #Gold in 2022 and find this wave assumption.
After 22 months, the assumption has proven correct with a +46% gain. However, mistakes were still made along the way.
· Initial Position
Position is built in Aug. 2022 (arrow 1), with -5% acceptable loss ($1,680-ish), which is too prudent in hindsight.
· Stop Loss
We incurred a -5% loss over the next two months as the price hit our stop-loss level. Meanwhile #Bridgewater had been consistently holding gold ETFs at the same time.
· Re-entering the Position
2 months later (November), with reveal the record-setting $249 billion monthly federal deficit and an engulfing monthly candle (arrow 2), we re-entered the positionâdespite having considered not to after previous setback (please consider that there were 8 months where the price barely moved)
That very November also marked the beginning of the Peopleâs Bank of China (#PBOC) increasing its gold reserves, a trend that continued for the next 18 straight months.
· #Patienceisavirtue
Whether you enter at Arrow 1 or 2, the end result in terms of profit may not change much. However, what makes the difference is the mindset that comes with each entry. A poorly timing can create unnecessary noise, lead to second-guessing, and drive you away from what could have been a beautiful trade.
Mentality is just as important as the strategy.