After this week’s worse-than-expected GDP reading, the mood surrounding the economy and financial markets is even more sour than before.

One of the things I emphasize when it comes to markets is the idea that sentiment follows price, not the other way around.

With the economy on the precipice of a recession, many are starting to write off 2025 as a lost year for trading. But I’m increasingly seeing evidence that the exact opposite is true, and that the best opportunities of the year are starting right now.

Forever In Search of Passive-Action

My fundamental understanding of markets is centered around its cyclical nature. I believe that markets are an extension of nature itself, but an often overlooked element in this discussion is the cycle that an individual goes through.

Do you ever feel like sometimes you fall into a multi-month funk or a multi-month period where everything seems to go right? I’m not trying to go “woo woo” on you here. But the fact of the matter is that for successful speculation in the long-run, we need to align our personal cycles with the greater cycles of the market.

Let me explain differently - every trader goes through winning periods and losing periods. I don’t just view a winning period as meaning that I’m aligned with the market - it goes beyond that.

Being “aligned” to me means that I am outperforming the market - both to the upside and downside.

I personally went through a 6-week stretch earlier this year, from late-January to the end of February, where I was not aligned with the market. But did that period ever threaten to blow up my account? Absolutely not. March and April were actually good months, but I refuse to take any credit here - there is still a lot of work to do into year-end.

Instead, I can give credit to the system I’ve developed over the years that places a tremendous emphasis on cutting losses short and focusing on the strongest stocks in the market.

If you, as a trader, can accept that learning how to lose is just as important as knowing how to win, you’ll make it in this business. It doesn’t happen overnight, and it’s a journey that seemingly never ends, but if you stay true to your principles, it can and will happen.

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