Is There Really A Holy Grail In Trading?

[sbell]

Sometime,i fell it possible!
Maybe, they also think get it as new forex exchange !

[masterg0g0]

Holy grail exists i believe so but it has its limitation, everything in nature is governed by some laws and when the going gets though the laws can break ? It is at this stage the chaos theory can take over.. all this sounds just jiberish i guess but.. at the end ther is balance in nature good/ evil and in our terms buy/sell and one variable changes then we have trade ..

I have been trading last 3 yrs in indian markets but still some times cant make out whats happening...
And yes emotions are the biggest enemies of a trader .. so stay away from it !!!

[IanKay]

Originally Posted by JeffC

Dear friend,
I completely agree with you. All discretionary based systems ultimately leads to bankruptcy. I agree that a holy grail exists. That is Money Management. Nothing else. All discretionary trading systems are nothing but hocus pocus. Only statistically tested (not curve fitted systems) will survive in future if you apply rigid money management. That's my view.

[juanchoc]

Personally, I belive there is no holy grail.
Obviously there are better or worst tools to use, but no perfect one.
Besides, consider that market dynamics are constantly changing, and 99% of all the indicators you see around are not able to adapt to those market changes, or work good only on past years, and slowly loose performance as time advances.
I know a few investment bankers and hedge fund managers (not quant ones, but still), and i asked a similar question some years ago, and they made me aware of how reality really works.
Who has the more advanced quantitative investment tools? Well.., the answer would be some of the big quantitative hedge funds there are (for example Renaissance Technologies). And are they capable of earning consistently year after year? Well, some of them (like Renaissance Technologies) seem to do so, still 80% of quant hedge funds seem to have been hit deeply in the current US crisis.
Now, continuing with the example of Renaissance Technologies, by far one of the leading hedge funds in quantitative research, can anybody just take a guess at how many millios per year they spend on research? How many physicists, matematicians, economists, engeeniers, etc, they hire for research pourpuses? Well the answer to both questions is, MANY, lots of millions and millions of dollars per year (hundreds), and hundreds of highly qualified research employees (and they are constantly hiring new people).
Still, they have a fairly consistent track record averaging a 35% return since the 90's, but consider this, if their track record didnt get better over the years, and they had to spend all those hundreds of millions dollars in research year after year, then what is all that research doing? Easy answer, they need to stay researching new methods to earn money, because old ones dont work anymore, and those new methods the develop for today, wont work in the future.
Besides, just consider that anything of what those people use, is imposible for a regular person to use. Imposible in the sense that you would need, for example, millions of dollars of liquidity to run their strategies, millions of dollars of equipment to run their models, millions of dollars of personel to mantein them, and so on, and after a while, they would stop working anyway.

Well, i did tell what i dont belive in, now its time to tell what i do belive in.
I belive there are some powerful people, with enough power to be able to manipulate the markets to some extent. Im refering to people like the Rockefellers, Soros, and other big investors and bank owners. Consider that the market moves because there is people to move it. Those with enough power to drive the interests of the mayority, have the biggest and best of all holy grails there is...

Just like i said on the beginning of this post, no holy grail, just better or worst trading tools.
You can be fairly profitable with the right tools, with no need for a holy grail.
Holy grails are just the expectatives and wishes of traders.

Bye

[hardpippin]

I think the easiest holy grail is just to to keep it simple.
What I mean by that is just to buy off support and sell off resistance.
Most of the time you cant go far wrong with that.

I think the majority of traders just see a move and quickly jump in.
That's called Herd Trading. By the time you do that you can always guarantee the move is over, and now it's going against you.Makes you feel sick to the stomach when that happens, hence the reason many traders get seriously burnt in news trading.

[rangerdoc]

For me, the holy grail was learning that the holy grail doesn't exist... at least in the form I wanted it to.
I think that to most people, the holy grail is supposed to be the magical system that allows anyone to make money without having to do their due dilligence first. I spent 3 years just paper trading and educationg myself before committing my hard earned $$$. Very few people will hang in that long. They want it and want it now. Trading is a business, not a scheme or hobby or side thing. Once you approach it as such and make the investment you would in building a brick and mortar business, then you have a chance at possibly succeeding.
The holy grail is in knowing yourself, because you are the weakest link in every trade. Once you really know yourself, you can work on issues that imapair your trading and know what types of trading fit your personality style.

[infolode]

No grail other than money management and taking high probability trades. Intra day cut your losses immediately.

[ElliottWave]

I tend to think there is, but it depends on the definition of "holy grail". For me the "holy grail" is a system that is consistently profitable enough that it frees me financially and allows me to spend my time doing things I love, rather than things I tolerate for money.


Mostly I think the key is to combine technical analysis with the wisdom of great traders and "golden rules" (to keep the biblical metaphor). I've spent quite a bit of time developing automated systems with NinjaTrader and I've found the biggest improvements didn't come from some "magic" new indicator, but by finding better ways to codify the thought patterns of good traders while at the same time using automation to minimize emotion.

Here are a few "rules" from The Gartman Letter which could be useful as part of a 'grail' system. I've bolded a few which fairly easily be coded into any system.

1. Never, ever, under any circumstance, should one add to a losing position ... not EVER!
2. Capital is in two varieties: Mental and Real, and, of the two, the mental capital is the most important.
3. The objective of what we are after is not to buy low and to sell high, but to buy high and to sell higher, or to sell short low and to buy lower.
4. Sell markets that show the greatest weakness; buy markets that show the greatest strength.
5. In a Bull Market we can only be long or neutral; in a bear market we can only be bearish or neutral.
6. "Markets can remain illogical far longer than you or I can remain solvent."
7. Trading runs in cycles; some are good, some are bad, and there is nothing we can do about that other than accept it and act accordingly.
8. To trade/invest successfully, think like a fundamentalist; trade like a technician.
9. Keep your technical systems simple.
10. In trading/investing, an understanding of mass psychology is often more important than an understanding of economics.
11. Do more of that which is working and do less of that which is not.
12. Establish initial positions on strength in bull markets and on weakness in bear markets.
13. Bear markets are more violent than are bull markets and so also are their retracements.
14. Be patient with winning trades; be enormously impatient with losing trades.
15. All rules are meant to be broken