Tuesday, June 26, 2007

Holy Grail in Forex, is it really exist?

The Holy Grail is often referred to in trading circles as the perfect trading system; the perfect conditions or indicator that will guarantee success in every trade you enter. All traders at some stage undertake the search for the Holy Grail whether it is consciously or subconsciously.

The reality of trading is that there is no such trading system in existence. It never has existed and never will. The fact that some software packages label an indicator the ‘Holy Grail’ only serves to whet the appetite of some people further and arouse their suspicion of what it could be and how they will find it.

It is also widely accepted that your own psychology or mindset is the largest single determinant of your trading success followed by your ability to manage risk. The small remainder of the ingredients to your trading success is your system which includes your entry signal.

When most traders start trading, they spend most of their time on developing their entry conditions. They will learn about various technical indicators, trends and chart patterns, and how they can be interpreted and applied to their trading.

In his book ‘Market Wizards’, Jack Schwager interviews numerous profitable traders in the United States. There is an interesting observation to be made about most of them. Often Schwager asked if they were to start trading again, what would they do differently.

Many answered that they would not have wasted as much time initially on their entry signals and they would have rather spent that time concentrating and developing their risk management rules and working on their own mindset or psychology.

When trading does not go well for most traders though, they begin to wonder what part of their entry conditions is failing them. Thoughts like is it the data they are using, the software, should they use different moving averages like weighted or exponential, or look at hourly data.

It is obvious that entry conditions are a necessary part of any trading plan but their importance is often overrated. Numerous texts have been written about various entry signals yet not enough focus on what is really important to trading.

This may not help the beginner who naturally assumes that their entry signal is the most important part of their trading plan and therefore they shall spend most of their time developing that.

Unfortunately some traders who have looked for the Holy Grail try to lay the blame for their lack of success on external factors. It might be the software they are using or the new entry signal they acquired from reading a book, but at the end of the day they should look no further than themselves.

Successful traders have numerous personal traits in common. They are focussed, disciplined, passionate, and are totally committed to their trading. They are humble and always prepared to learn from their mistakes. The Holy Grail of trading has never existed and never will.

1 comment:

Dr Wayne Nowland said...

Hi, I read your post on "Holy Grail in Forex" and the underlying hypothesis that there is no such thing. I would like to invite you, and encourage others also, to submit your posts relating to this topic on my blog at:

http://ForexTradingGenie.com

My blog is aiming to become a top Forex Information resource (in this specific niche area) and is presently the leading catalyst on the internet in the Quest to find or create the "Holy Grail of Forex Trading".

I have created a specific definition for the "Holy Grail of Forex Trading" (you will find it on my blog), and I believe that such a system, or trading course and methodology, can be uncovered.

I also believe that its unearthing and/or creation will be stimulated through increasing the interest level on this topic within the various stakeholder groups around the globe. This will ultimately lead to something which does all (or perhaps 95%+) of what my definition of the Forex Trading Holy Grail is seeking to achieve.

I know it can be created because "nothing" is impossible forever, "forever" is a very very long time, and we humans are capable of anything given time.

However, I genuinely believe that the Forex Trading Holy Grail is within our reach right now, and I am dedicating the next 3 years of my life to allowing it materialize, and then using it to spread wealth to millions of needy people all over the world and in all walks of life.

I invite you and all of your readers to join with me in this pioneering feat ... so that ordinary people can benefit through "easy" wealth creation that will be manifested through the Forex Trading Holy Grail.

Everyone deserves to be wealthy, happy and successful in life because the world is an abundant and loving place.

Many thanks and warmest regards,

Dr Wayne Nowland,
Business Strategist, Mentor & Forex Trader
Founder, Internet Millionaire Blueprint (IMB)

To join my exclusive IMB membership team, just send a blank email to:

InternetMillionaireBlueprint@GetResponse.com