Founder’s Note: We talked this week about stepping away from our screens to refresh our brains and refocus our thinking processes. It’s good to do that. It’s great to be able to do that.
Sam Gatlin – SamG in the chat for those of you who participate in The Primary Trend and The Divergence live on Mondays and Wednesdays – makes it possible for me to do things like spend a week with my family in Miami.
Here’s Sam with a perfect note for a mid-March Saturday… – JC
By Sam Gatlin
Trust is one of those words we use all the time but rarely stop to think about.
It sits quietly underneath almost everything we do.
You trust your doctor to make the right decision when your health is on the line.
You trust your lawyer not to act against your interests.
You trust the pilot flying your plane knows what they’re doing.
You trust that when you deposit money in a bank, it will still be there tomorrow.
Trust is the invisible infrastructure that holds our lives together.
When Trust Breaks Down, Things Unravel Quickly
Entire societies can feel unstable when people stop trusting institutions.
Relationships collapse when trust disappears.
Businesses fail when customers lose confidence.
In almost every area of life, trust is the glue.
Markets are no different.
But in markets, the trust that matters most isn’t trust in institutions or trust in experts. It’s trust in your process.
As the legendary Kansas Jayhawk Joel Embiid infamously said during a trying time in his career, “Trust the process.”
That’s something I’ve spent years learning the hard way.
Over time, you build a system that works for you, study the data, and test your assumptions.
You refine your rules, make mistakes, and adjust.
Eventually, you arrive at a framework that makes sense and delivers results over the long term.
At TrendLabs, I’ve been fortunate to work alongside JC and help develop strategies that we believe are robust and repeatable.
These systems weren’t built overnight.
They were built through countless hours studying markets, looking at charts, measuring behavior, and stress-testing ideas across different environments.
But here’s the part nobody tells you when you finally feel confident in your system.
The Market Will Test You
There will be stretches where nothing feels easy.
Periods where the signals are messy.
Moments when the trends that usually drive returns simply aren’t there.
That’s where trust matters most.
Right now feels like one of those environments for many traders.
Many trend followers, particularly those operating on longer timeframes measured in weeks and months, have struggled in parts of the market this year.
Many equities haven’t produced the sustained upside trends that make life easy for systematic traders.
It’s tempting in those moments to abandon the process and start tweaking rules and chasing something else that seems to be working today.
But that’s how good systems get ruined.
Because while some areas of the market have been difficult, others have offered tremendous opportunities.
Commodities have produced some incredible trends recently.
The move in crude oil has been remarkable.
Soft commodities have delivered strong downside trends that rewarded disciplined short sellers.
Even within equities, there have been profitable short setups for those willing to follow the signals.
The opportunities are there.
They’re just not always where people expect them to be.
And that’s the trap many investors fall into.
When the part of the market they’re used to trading in stops behaving as it normally does, they assume the system is broken.
Most of the time, it isn’t.
Markets simply move through different regimes.
A process that works over time will inevitably go through periods where it feels uncomfortable.
That doesn’t mean it stopped working…
It means the market is testing your ability to stick with it.
The real mistake investors make isn’t having a flawed system.
It’s abandoning a good one at exactly the wrong moment.
If your process is truly robust, if it has produced consistent results over time and across different market environments, then your job isn’t to constantly reinvent it.
Your job is to trust it when the market tries to shake you out.
That’s easier said than done.
But discipline is what separates professionals from everyone else.
Everybody wants a strategy that works.
Very few people are willing to trust that strategy when things get uncomfortable.
That’s where the edge is.
Not in predicting the future or finding the perfect trade.
But in trusting the process you’ve built, when the market inevitably tries to make you doubt it.
Everybody’s wrong about a lot of things in this business.
One of the biggest is believing that success comes from constantly searching for the next new idea.
More often than not, it comes from trusting the one you already have.
Stay sharp,
Sam Gatlin
Chief Kansas Jayhawk, TrendLabs