As I said in my last post I have a new baby boy in the house ( who is now almost 10 months old!) so it has become increasingly hard to find time to write new posts. Nevertheless I felt that this topic needed to be addressed as it seems that many of the forums , postings and websites that I come across throughout the trading week all seem to be looking for , or advertising the "Holy Grail".
Now one must understand first what the meaning of this Holy Grail is. I do not think there is a standard definition for it , at least from a trading perspective , but as I understand it it is a system , indicator , trading method or mentality that is supposed to yield you 100% success no matter what. Well in the 7 years that I have been trading stocks and Forex I have never seen nor come across such a thing. Does that mean it does not exist? Not necessarily.
Although the idea of something never having a loss seems a bit impossible to me.
My thoughts on this is that there are systems , methodologies and indicators that probably come pretty dam close to being always right but I feel the only way to be 100% correct in the markets is to go find Doc Brown and ask to borrow the DeLorean for a few days.
My point is that every one's own definition of the Holy Grail is going to be different than others. For some, their Holy Grail is money management for others it is psychology. There is no limit to what the Holy Grail is or can be for each individual. The other problem is that most traders who search for something that works well tend to find something , use it for a few trades and when it does not show instant success they move on to the next thing not giving the other thing a chance to show what it can do. They keep searching and searching hoping to find that "thing" that will show them instant success all the time. It is a fallacy , it does not exist. There are no 100%'s in life.
For me I believe I have found my own "Holy Grail" . It is a combination of 2 indicators and psychology. In my recent trading I noticed something about myself. I started not caring. When I say not caring I mean if I lose , that's OK and if I win that's OK to.I learned to trust myself and my system and understand that there WILL BE LOSSES! My psychology has changed for the better where I am no longer nail biting as soon as a trade gets put on. For example yesterday right at the open of the New York session a signal was generated. I took the trade and was stopped out in less than 5 minutes for a 15 pip loss. I did not care. I said to myself " Oh well , there will be other signals" and sure enough there were many more. With a total of 5 winners and 2 losers for a net gain on the day.
My point is that a few years ago after that first loss I would have stopped trading for the day trying to figure out the flaw in the system or the market because the trade "should have" worked out. What I should have been doing is trusting the system and realizing that it was me who was flawed and not the market or the system. The market has no bias it is just there. It does not care if you win or lose it just is.
You cannot become a successful trader until you trust in your own system. That is why most people fail with a system they get from someone else. They did not create it , test it or have any part of the process , they just received the finished product. The problem is that every time there are signals generated they will more than likely either not take them or always question them because the psychology of the person who created it is different from their own and then when they have a loser they claim "scam" or "fraud".
In closing the only way , that I see , to find your Holy Grail is to first find out what style you are comfortable with , what indicators or methodologies you like and try to create your own system based on those and get you emotions in check and understand that losses happen, ALWAYS . Only then can you start down the road of becoming a successful trader.
Until next time,
Happy profit hunting.
Pip meister.
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