As a culture, we’re obsessed with winning. Partly because it feels good. But more so because losing hurts twice as much as the pleasure we get from winning.
Nobody wants to dissect how much they lost on that one trade. Instead, you want to brag about how much money you made buying NVDA.
But if you really understand trading – I mean playing the game on the fourth level and beyond – you know that winning isn’t close to the most impressive feat a trader can achieve.
Instead, the world’s best traders obsess over not losing money.
We do this at Macro Ops by following our Trifecta Lens approach. The Trifecta Lens combines technicals, fundamentals, and sentiment to put the odds in our favor of a profitable trade.
But before we discuss our most recent loss and how it reflects our Trifecta Lens Approach, I want to introduce you to our Macro Ops Collective.
The Collective is our full-kit soup-to-nuts service that provides research, theory, and a worldwide killer community of dedicated traders, investors, and fund managers.
We’ve been told that there’s nothing else like it on the web. If you’d like to tackle markets with our group (whom I should note has been having a great year in markets), just click the button below and sign up.
As a Collective member, you’ll learn all about our Trifecta Lens approach to markets. The one that allows us to confidently trade any market, any instrument, in any market regime.
If the Collective sounds like a group you want to call home, join us at the link below. We’re running an extended Labor Day sale, so spots will fill up fast.
Alright, so here’s why SBSW was one of the best losses we took all year and how it shows the power of our Trifecta Lens process.
Fundamentals … Check.
We’ve been very bullish on PGMs. For the past 6-9 months, we’ve written about them, cited all the reasons why they should trade higher, and tweeted about them to thousands of people.
It seemed like a “no-brainer.”
We wrote a long piece on the company, confirming all our hypotheses and biases about why the trade should work based on the fundamentals.
So, we bought SBSW, which is the most leveraged way to play the PGM thesis (outside futures/options).
That checked the Fundamentals part of our Trifecta Lens Criteria.
What about sentiment?
Sentiment … Check.
PGMs couldn’t be more hated of an industry. For the past year all anyone cared about was the “Green Energy Transition.”
EVs would take over the world, and we wouldn’t need any more gas/diesel engines.
That was the consensus view. Every major auto OEM had 5-10-year 100% EV production targets.
EVs were inevitable, they said.
It was basically a PGM death sentence, as the auto industry accounts for ~70% of PGM demand.
The Trifecta Lens Criteria demands that we fade consensus sentiment.
So that checked the box.
But what about the technicals?
Technicals… Not So Much.
The best trades … the ones that give us the highest probability of success … check every box.
SBSW failed to check the Technicals box. Check out the long-term chart below.
Is this really a chart we want to be long on? No. It’s a “do nothing” chart.
We let our fundamental and sentiment biases prevent us from waiting for all three criteria to confirm the trade.
What happened? We lost 75bps on the position.
That doesn’t sound like a lot. But it could’ve been much bigger.
We could’ve stayed firm in our fundamental and sentiment convictions, ignored the tape, and held the falling knife 40-50% lower.
In other words, we could’ve let the ego win.
That’s why our Trifecta Lens approach is so powerful. When strictly followed, the Trifecta Lens keeps us out of these money-losing trades. It tells us to stay on the sidelines and wait for all three criteria to hit.
The Trifecta Lens has helped us avoid big losses while capturing major moves this year. It’s the primary reason why we’re up over 30% YTD.
While everyone else obsesses over winning trades and 10-baggers, the real pros who understand this game at the fourth level and beyond obsess over Trifecta Lens trades.
That’s what the Macro Ops Collective is all about—a group of ruthless profiteers who use the Trifecta Lens approach to markets to consistently outperform.
If that sounds like something you’d be interested in, check out the link below.
I can’t wait to see you in there.
