I was always told that if you couldn’t clearly describe your trading process in 30 seconds, you probably didn’t know what you were doing.
I agree with that. So over the next 10 minutes, I’m going to take a 30 second answer and explain it as thoroughly as I can so that you can take my process and implement it yourself.
Of course, this is quid pro quo.. a few of you will read this and think ‘naw, not for me..’ and that’s ok. But a few more of you may end up understanding it and using it to make yourself a better decision maker in the markets. And some of you may even end up becoming a subscriber + a Hit List member because you want more. Wherever you are at the end of this.. just understand I appreciate the time you gave me to read through it.
So let’s get into it.
The trade we’re going to be talking through is a position in Newmont Corporation (NEM), a $142 billion dollar gold mining position.
And we’re currently up over 250% on it:
But before we get into the trade itself, it’s important to understand how we got to NEM to begin with. And that starts with our top-down process I call our Market Blueprint.
As I wrote about in my piece covering my approach to trading the markets, most trades attack the markets by researching single stocks and then building a thesis around them.
They see something on Twitter or TV or a buddy in a group chat sends a meme or something.. and suddenly they have to buy the stock. I see it happen every day.
I work in the exact opposite direction.
My trading process begins with five questions:
What kind of market are we in?
Where is capital flowing?
Which stocks are leading inside of those areas?
Do any of those stocks have actionable setups at the moment?
Can an options overlay add asymmetric upside without introducing a stupid amount of risk?
I’m working from the market to the sector to the industry and finally to the stock.
I didn’t stumble upon NEM on accident. I found it only after clearly answering the first three of those questions in my Market Blueprint process.
If you’re interested in learning more about my entire trading approach, read this:
My Trading System: 17-Years and Counting..
What you’re about to read is 17-years worth of trying to figure this whole thing out. What started out as a brain dump ended up being a four hour article. I hope it helps.
I use my Market Blueprint process every single day.
I’m constantly thinking about primary trends, participation, confidence within market participants, sector and industry rotation, macro risks, inter market ratios and on and on.
I don’t want to predict what’s going to happen in the market.. listen, if there’s one thing I’ve learned over the last 17 years of doing this it’s that markets don’t owe us shit.
I focus on those key principles because I know that to identify the conditions the market is trading in, I can establish where I should be looking for opportunities.
I used to do it by hand. Every single day. But with the power of AI.. I’ve built the TTI Trade Desk. And inside of it.. the Market Desk.
It helps me keep the Market Blueprint current as conditions changes throughout the week.
Once I understand the environment we are in, I can start following the flow of capital. And by using the TTI Scanner, I can narrow the list of thousands of stocks down into a much smaller group worthy of looking through.
On the night of August 4th, I published a game plan covering gold, silver, and the gold and silver miners.
The reason was simple: all three had sucked for months.. but something was beginning to change.
Gold had stopped declining and spent roughly a month consolidating and building a range. Momentum had begun to creep back in favor of the bulls.. even as price continued to chop around.
Silver was showing the same technical pattern.. but with significantly more beta behind it and a prior cycle high sitting right underneath it.
GDX, the most popular gold mining ETF, was building out a rounded bottom. And just like gold and silver had begun building bullish momentum under the surface.
None of those observations at the time guaranteed any sort of breakouts or trend reversals higher. But they did tell me that a previously weak area of the market was beginning to improve..
And no one was taking notice. Everyone only cared about timing the bottom of the AI trade after the Leopold Aschenbrenner situation.
I think it’s important to note that my process has nothing to do with monitoring headlines for inflation readings or what the Federal Reserve was going to do.. or the death of the dollar. Blah blah.
My process is rooted in the only thing that matters: price.
Price action in the precious metals space had changed. Relative strength changed. Momentum changed. Capital flow changed. And so I changed my bearish stance on it.
In the August 4th plan, I identified levels that would get me into each trade idea:
GLD above 385
SLV above 58
GDX above 80
I had a theme. Now I just needed to find the best way to express it.
We had internal conversations within The Trading Initiative.. we knew that once gold, silver and the miners started improving, we had multiple ways to express the same basic thesis.
We could own gold directly through GLD.
We could take the higher beta precious metals route through SLV.
We could own the entire basket of miners through GDX.
Or we could look inside the group itself and find a leading stock exhibiting a combination of leadership, a technical setup and great potential reward.
Those questions.. and that search.. led us to Newmont Corporation (NEM).
NEM had a Flow Score of 76. Momentum was ticking higher for the first time since it peaked in late January. And the company had already reported earnings.. removing the immediate risk of a binary event.
Most importantly, NEM offered a lot greater upside potential than simply owning the underlying commodity or the entire group itself.
Write this down.. improving market conditions → capital moving towards precious metals → gold miners improving → Nem emerging as one of the stronger individual expressions of the trade
This is what I mean when I say we follow the flow of capital.
I don’t teach people to screen for random patterns and then pretend to invent a thesis around whatever shows up. I tried that for years and it never worked well.
Instead.. I teach people how to identify themes first. The best stocks you will ever own will be in leading themes. Remember that.
On August 5th, NEM cleared our entry trigger and we sent out the trade.
Here’s what the chart looked like when we opened it:
The trade thesis was simple..
We wanted to own the opportunity to participate in a six month power trend into all-time highs while utilizing as little capital as possible.
The options market gave us an incredible chance to do just that.
The alert went out like this..
Buy the Newmont Corporation January 15, 2027 $125 Call for $5.90.
We used options exclusively.
Each contract represented a maximum loss on the trade of $590. The January 2027 expiration gave the underlying thesis enough time to develop. And the calls gave us a sleeve of convexity if NEM accelerated higher.
Any time I can clearly define my risk through premium paid and have the opportunity to make a (theoretical) infinite amount of profit, I’m in. I want it. Buy enough of those and you’ll get rich.
But only if you respect one thing.. risk.
Immediately after the options play was the most important part of the entire alert:
Place a good-til-canceled order to sell half of the position at twice the entry price.
The first exit was planned before we even took the trade. Before we knew whether it would even work.
When I’m trading, I want to take as much of the guesswork out of the process that I can. There’s no emotional debate internally when a trade is flying in your favor if your first sell order is on the books before the order even goes through.
Here’s what a part of the alert looked like as we sent it out:
Arguably the most important part of this entire article.. sell the damn double!
Seven days after opened the trade, our NEM calls traded as high as $12.10.
With a maximum entry of $5.90.. the position had gained approximately 105% and our preplanned sell orders were triggered.
We closed half. At 100%. Meaning all of our original capital that we put into the trade has now been returned back to our accounts.
And what we have leftover is an opportunity to participate in the trend that we had originally wanted to own.
Think about this for a second..
By selling half of your position at 100% (or more), you’re effectively getting back exactly what you put into the trade.. while still having 50% of the original position on and profiting as long as the trade continues to work in your favor.
Or.. to sum it up..
You effectively can lose absolutely nothing. Yet you can profit a theoretically infinite amount.
Yes. You read that right. You cannot lose a single dollar (outside of taxes and fees) on the trade once you sell the double. You can only win.
This is how a good trade gets the opportunity to turn into a great trade without us having to gamble our money away. And some of these end up being the biggest trades we put on all year.
But the trade didn’t end when we sold half. No.. it was just getting started.
By August 21st, the contracts had tripled in value. Some traders inside of TTI sold off another 25% of their original position.. but I decided to hold the remaining 50%.
Everyone is different. But over the last decade I have found that my largest losses don’t necessarily come from bad trades.. they come from selling my biggest winners of the year too early.
With six months to go and no risk against my account with the NEM trade on, I am going to ride this trend as long as it’s willing to pay me.
And according to the TTI Trade Desk, NEM may still have awhile further to go.
As of today, NEM is trading in the $135s and is printing fresh 20 day and 52 week highs.. and is moving into new all-time high territory.
Here’s what the TTI Scanner has for NEM right now:
TTI Score: 76
Trend: 76
Relative Strength: 80
Momentum: 73
One-month return: +44.6%
Twelve-month return: +91.0%
Distribution days: 0
New 20-day high: Yes
New 252-day high: Yes
And the capital-flow engine separately classifies NEM as a Capital Flow Leader, with a price-confirmation score of approximately 99.
Essentially.. this is no longer just a chart was looks interesting. It’s a chart where capital flow and price are confirming one another as it price breaks out into new all-time highs.
NEM’s formal scanner match today is our Group-Confirmed Leaders scan.
If you’re a paying subscriber to this Substack, you likely saw NEM on the scan I sent you last week. And if you’re not yet.. for $10 a month I’ll send you a scan from our TTI scan every night with instructions on why the scan exists and what the stocks are saying.
Too many people use scanners incorrectly.. almost as confirmation bias. They want a stock → they scan for the stock → they find the stock and then chase the stock whether it’s setup to buy or not.
The truth is NEM is an incredibly powerful leadership stock within a leading industry group in the market. But its current condition is better suited to managing an existing position than it is to simply buy here.
That’s why a great scanner is there to help you identify setups before everyone else finds them. And only after you clearly define the environment. Use my Market Blueprint method!
And that’s it. That’s the process.
TLDR as summarized by AI:
August 4: Gold, silver and gold miners enter the Market Blueprint as improving areas. The thesis and trigger levels are published.
August 5: NEM is selected as the higher-reward single-stock expression. We buy the January 15, 2027 $125 call for $5.90 and immediately place an order to sell half at a double.
August 12: The option trades as high as $12.10. We sell half for approximately a 105% gain and retain the remaining position.
August 19: NEM is nearing a triple. Members are reminded to pay themselves and actively manage the winner.
August 21: The contracts have tripled. Some traders take another tranche. I continue holding 50% of the original position.
August 25: NEM breaks into new all-time-high territory. The remaining options are near a 300% gain. The refreshed Trade Desk classifies NEM as a Capital Flow Leader, while the Scanner places it on the Group-Confirmed Leaders scan.
Parting thoughts here as I wrap this up..
Not every trade is going to be a 300%+ winner.
Some will be 1,000%+ winners. And some will stop out or go to 0%. That’s how this game works.
Historically I am about a 50% win rate kinda guy. But because I target 4:1 setups or greater 90% of the time, I don’t have to worry as much about nailing every trade.
I know my process will get me into some big themes and big trends early.. and if I can manage the trades appropriately, the winners will pay for the losers many times over on a yearly basis.
Steal my process. It works. Tweak it to your liking. Make it yours. Or come learn it with a great community all trading the same way. I call it learn and earn. Not a bad way to get into markets.
Start with clearly defining the environment
Follow the flow of capital
Find the strongest themes, sectors and industries
Identify the leaders inside of those areas
Wait for price to give you clean entries
Structure the trade so that you can make (at least) 4:1 reward-to-risk
Plan the exits before you take the trade.. and before emotions take over
And lastly.. manage the position you have.. not the one you wish you had
NEM is a great outcome on a good trade. But more importantly.. it’s a clean demonstration of how the entire TTI system is supposed to work.
If you’re interested in getting the scans on a nightly basis (and some other goodies along the way), the Substack is $10/mo.
And if you’re interested in learning more about how TTI works.. you can head on over to the About me and learn more.
Substack subscribers also get a nice discount on the yearly sub for TTI if it makes sense to join the entire community.
Thanks for reading!
I write about capital flow, market cycles, sector rotations, hot tipz on stocks, and whatever else I think is cool.
Feel free to reply back to any of the newsletters and talk shop.
And follow me on the other platforms..
Dear Hamilton,
I would like to connect with you a, and sent you a DM - I want to subscribe to TTI - is it possible see the trade logs before I subscribe.
Basu