Stupid, stupid, stupid

If nothing else this post will be a graphic lesson of what happens when you don't follow a system. Back in late November I anticipated a Santa Claus rally for the Dow and placed a bet on DDM which is the ETF proxy for the Dow Jones. I worked out well. I closed out the bet yesterday with the following results. Purchased Nov 25th at 68.64. Sold Feb 28th at 81.94 for a gain of 13.30 a share which calculates out to a pick up of 19.35%. I was hoping for 20% so that's close enough for government work. Chart below.  As you can see from the chart DDM was just getting ready to cross the moving average line to the upside when I bet.

DDM 13 wk moving average

  Now for the stupid, stupid, stupid part. On the same day I placed a bet on GDX which is the ETF proxy for the gold miners stocks. Notice in the chart below GDX was nowhere near crossing the moving average line and issuing a buy signal. However I gambled and lost big time. Chart below. 

GDX 13 wk moving average

 If you go back to around the first of December you will see GDX was well below the moving average line and dropping. For whatever reason I tried to anticipate a turn around in the price of Gold and bet accordingly. Boy was I wrong. This has now become a long term investment as it's going to take quite awhile to get back to even. Here are the results so far. 
Purchased at  48.63
Current price 37.40 
Down 23% so far
Lesson learned. Follow the system. It's not perfect but it works the majority of the time.