The "Holy Grail"

Discussion in 'Trading' started by aphexcoil, Sep 10, 2002.

  1. I am sure this post will create a lot of replies, although after reading countless posts, books, reviewing countless strategies, paper-trading, simulated trading -- analyzing data, trying to find patterns, reviewing TA, checking out various indicators, I have finally reached what I feel is the Holy Grail.

    Many traders obviously use different systems to varying degrees of success. I've read books from Elite Traders that say, "you don't want to do this!" when another very successful trader says, "I always do that!"

    I then got fed-up with all the information and started on a quest to come up with my own analysis of the market that would exploit it.

    I've seen countless traders use Bollinger Bands, RSI, MACD, and <insert a TA indicator here> to varying degrees of success or failure.

    You know what I've found out in my short little journey through trading knowledge before I dive into ES futures myself? Here is the Holy Grail of Trading as I perceive it.

    First of all, all these indicators are utter trash. I'm sure a lot of people are going to rip me apart -- but the only indicator worth having besides your chart and tape are a couple of moving averages.

    I've been in chat rooms watching a lot of traders examining at what angle the chart hits a bollinger band and then review the RSI and determine what the momentum indicator is saying -- however, all of that is useless because the most important information is right there in the chart. The chart is showing you the trend -- so throw out the trend indicator. The tape is showing you momentum and buy/sell interest, so throw out the momentum indicator.

    Its like driving a car and using the onboard mapping system to drive without ever looking through the windshield! Are you going to get to your destination that way? No!

    TA may work for some traders and keep them somewhat profitable, but I am thoroughly convinced now that the best method to trade is using simplicity. That means looking at the chart and watching the price action and perhaps a few MA's to give you some idea of short and long term trends.

    I'm so sick of TA that I'm going to take my Technical Analysis book outside and burn it. TA is great for academics or other people who like to have 50 indicators in front of them -- but the more you use TA the less your brain can process the most IMPORTANT information which is found in the -- you guessed it -- CHART AND TAPE.

    So that just leaves a system, which I've been using and it works. So then now that just leaves one last thing. For me to open up my IB account, wire in 5k and put my money where my mouth is.

    Too much information -- too many complicated indicators. It's all BS, really.

    The Holy Grail is simplicity, system and money-management.

    The Holy Grail TA indicator will NEVER be invented because it already exists in the price action and charts!!!!!!!
  2. bingo
  3. machine


    5K to trade e-minis? And you call this money management?
  4. Machine,

    One contract. I have to start somewheres.
  5. You better be sure there is no trash burning ordinance. Rather than burn your books, send them to me. I'll even pay the postage.

    Although, none of those ones entitled "Electronic" anything. They are all a rip. Fortuantely my public library has all of them so I read them for free. What a waste.

    Although I do not whole-heartedly agree with your assessment of TA, I do agree with your observation about trade management.

    Did you ever see the movie Real Genius? Your post reminds me of the guy who goes berserk at the study table. Take a break from all this. You have made a bazillion posts in record time.

    Focus on something really important, like the way our lives have changed since this time last year. Think of nothing but how good it is to be alive, and how fortune smiles on you.

    Then come back next Monday, and I promise... we will all still be here.

    For the next several days Aphie, you can even forget that...
  6. NKNY


    You are so right...

    After today, my head was spinning looking at all my indicators.

    I read somewhere that If you only have one clock, you would know the time but if you had many...well , You wouldn't know what time it was. They all would would give you a different time. I think it was bollinger or of those guy's.

    But I know what he means...

    I may eliminate it all and burn my books in the yard with you apex...


  7. Holy Grail?

    Take any group of 100 people selected at randoom who have no trading experience, put them in a 100 member only trading pool where they compete against each other only, give them the exact same tools to use in trading, and 10% will end up with 90% of the money.

    Repeat the experiement 1,000 times, and you will still find that 10% of the people will always end up with 90% of the money.

    It is the law of the jungle, and it never changes. The 10% rule.

    Holy Grail? Sure, it called a mental and emotional edge. You can study your entire life, practice all you want, but if you don't have the edge you WILL LOSE.

  8. LeesonTrader

    LeesonTrader Guest

    Man, theres no holy grail. TA is an art, and should only be used as a secondary indication tool. It only works as well as the user, and if applied to the correct situation. It is also probability based, not absolute at all.
  9. You guys never saw the Indiana Jones series.
  10. machine


    Why do you want to start with minis, then? I suppose you want to scalp them, right? Otherwise 5K is just not enough.

    You lose internet connection and all your money management goes to the toilet.
    #10     Sep 10, 2002