Does The Holy Grail Exist?

Discussion in 'Strategy Development' started by normcarte, Oct 28, 2006.

  1. normcarte



    Can someone provide a logical proof (sort of like a math proof) that it is either possible or impossible to create a trading strategy that is always profitable? Let's ignore commissions, spread and slippage for the moment, just to simplify matters.

    For example, it is easy to show for a simple buy/sell strategy that an infallible system cannot be defined. No matter what your buy/sell criteria, no matter where you set your stops, and no matter how you manage your money, the stock can always go against you after the transaction. But, that is a simplistic example.

    Of course, many other components can be added to a simple buy/sell strategy. The strategy can be hedged, for example. Off-setting transactions can be made. Options can be purchased.

    Let's not consider straight arbitrage (same instrument in different markets), unless it can be shown that such opportunities are readily practicable. Generally, straight arbitrage requires either luck (finding a rare opportunities where an instrument is trading at two different prices) or vast resources (to take advantage of very minute differences in prices).

    So, can someone profile a proof (a logical argument) that an always profitable trading strategy is either possible or impossible?

  2. My holy grail was coming to the realization that there is no holy grail.

    If someone could provide a mathematical formula that shows it was possible then im sure they wouldn't post that here :)

    I've found various setup rules that give me a 90% edge but they still go through draw downs like anything else.

    CajunSniper / Administrator-Trader
  3. Anyone who has the discipline to only post once in 7+ years has one major compenent of successful trading down pat :D

  4. doli


    Inter-index arbitrage may work on a small scale.
    Compare the dow and nasdaq charts. There may be a '.pdf' on the CME website (think that's where I read about it).
  5. The Holy Grail is yourself. Your talent, or lack thereof as a trader

    is the only reason for your success or failure.
  6. dinoman


    The Holy Grail does exist! The biggest problem though was when it was first written about is was misspelled. They meant to spell it like "The holey grail" in meaning that the grail had many holes in it and it doesn't hold water. :D
  7. The holy grail does exist if you choose to believe so, however if you choose not to believe so the holy grail doesn't exist. :D
  8. The trading holy grail is much like the historical grail... it is not something tangible but rather something inside yourself, unlocking this riddle is the grail quest itself
  9. bgp


    yes, in my mind !
  10. Agreed, history repeats itself. That is what you are looking for. Probable historical opportunities.
    #10     Jan 14, 2007