There’s No “Holy Grail” Indicator

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Traders are constantly searching for the indicator that will make them rich, but trader Rob Hoffman warns that indicators work differently for every trader and mustn't be used as a crutch.

Traders always seem to be looking for the next hot indicator or the indicator that’s going to make them millions of dollars and be able to use that forever and ever on any kind of market, but is that the reality?

Our guest today is Rob Hoffman; he’s here to talk about that. Rob, should I rely or go out and try to find the best indicator to use and continually use that? What’s the best way to deal with so many that are out there?


You know Tim, I went through that for years, looking for the magic bullet, the secret, the “Holy Grail.” While I found a lot of indicators that seemed to work a lot of the time, what I really found in the end is that it’s not just indicators, because even if you have a great indicator, what do you do with that indicator?

When it says buy, do you go ahead and delay your buying decision? Do you go ahead and buy in front of your buying decision, so do you front-run the indicator? How do you start handling it emotionally when the signal is about to fire off or does fire off?

Even if you have a great indicator, what I find often in the real world is what works really well for trader number one doesn’t necessarily work well for trader number two.

A lot of that is personality, personality style, and also kind of their mindset, their emotional state.

What I believe is…I’m a firm believer that the “Holy Grail,” in many ways, is within a trader, their mindset.

I often talk about different mindsets that I believe to be adverse for most traders.
What happens is—and I had recently a real life example of another reason not to go ahead and rely strictly on indicators, but focus on price action, support/resistance, and mindset as well—I recently had a situation where a permissioning server that I was trading through went ahead and went down, so all the indicators that I had that were permissioned on that server all went down, so effectively I had support/resistance levels, price action, and a volume indicator, basically, a volume indication.

So I was back to the basics. No fancy indicators, no custom indicators, no proprietary “Holy Grails,” just Rob Hoffman’s support/resistance and price action. That trade worked out very well for me.

The point is, though, regardless of how it worked out, I had to get back to the basics, and if I was really only focused on indicator trading, I would have been paralyzed. What do I do, my indicators aren’t there, I guess I’m going to have to shut down the computer for the day?

Also, indicators are very well known or giving false signals. Even the best indicators will occasionally give you a false signal.

How do you, or how in tune are you with the market to tell you at a particular time, you know, the indicator says buy or sell, but something just doesn’t seem right here. I’m not feeling it in the price action; something’s off, something’s not right. I think I’m going to abstain from taking this particular trade, so still being in tune with price action, volumes, support/resistance, I think, are really important.

You want to be able to trade whether or not you have access to a specific tool. Because in the end at some point you’re going to have just price to watch and maybe volume and the support and resistance levels, so you don’t want to use it as a crutch, I guess.

Exactly, I’m very firm about that, I don’t want to use it as a crutch. It’s a support decision tool when I have it, but in the end, there’s more than life in this search for the “Holy Grail” or the Holy indicator, that’s right.
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what we want: 1+1+1+1+1+1+1+1+1=9 <3
what market delivers: 1+2+8+7-4+0-5+8-4-5+1=9 :problem:


Re: There’s No “Holy Grail” Indicator

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Market is changing from range to trend and opposite, so cannot be technical indicator working properly in both market conditions. Also, the technical indicators are using and display data already visible on the chart, just under different visualization. In all cases, there is no stuff predicting correctly where the market will go further.
There are some models of market behavior and via using them, the profitability could be increased significantly, but still this would be away from the holy grail :)


Re: There’s No “Holy Grail” Indicator

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FrancoisT wrote: Thu May 18, 2017 11:30 pm I believe the Holy Grail is hidden somewhere behind the simplest stuff using for trading :)
Of course that there is a holly grail
But as Ian Thorpe told : "I have a system that generates 5-10% a year, but now nobody wants a system like that. All are looking for 100% a day". Maybe we are looking into wrong direction?
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Re: There’s No “Holy Grail” Indicator

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I guess, everyone has to find his/her own two or three edges over market that have good synergy on the tf(s) and style(s) you trade and this applied to the right market phases you have a very high chance not to loose. I mean, if you won't loose in the long run, you are better than 90% of the mass. Is this yet a grail?

What I noticed here on TS.com are much more posts of people who are obviously no noobs anymore. On TSD a lot of beginners repeated the same nonsense over and over again they heard from trolling 'gurus'. Or someone had posted a pic of a Pollan indi and said: "Here proof of Holy Grail." :D

Re: There’s No “Holy Grail” Indicator

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mladen wrote: Fri May 19, 2017 2:38 am Of course that there is a holly grail
But as Ian Thorpe told : "I have a system that generates 5-10% a year, but now nobody wants a system like that. All are looking for 100% a day". Maybe we are looking into wrong direction?
The Holy Grail may take different dimensions :)
Most of the traders does not have sufficient funds in their accounts - this is from one side. On other, they does not have patience their small accounts to grow with a pace that does not risk their money. That is why, a "holy grails" systems bringing around 5% / per month are not good enough for them and they are going to look for a systems making 50%, doubling or even more per a month. For them a good trader is a person making 10% per day and they are striving to trade more and more hoping they will hit the jackpot every day. Then the reality comes into the stage, but their money simple disappears.
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Re: There’s No “Holy Grail” Indicator

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When you hold stocks or have an good fond manager the benchmark is the S&P, DAX, MSCI World or whatever and here are 5-10% p.a. very good. But then you don't trade, you have only moderate risk. Safe investments like bonds never have much %. On the other way your effort is as low as it could be and more over it is unleveraged. There is no benchmark in FX, right? I guess 5-10% per month (180-314% p.a.) is already pretty good and not that hard to achieve. Just don't get greedy and every trading system that has a constant yielding curve should be a grail. To biggest failure isn't to remain with your feet on the ground. Haven't they never seen the grail scene in 'Indiana Jones and the Last Crusade'?

Re: There’s No “Holy Grail” Indicator

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If you read the trader interviews in the Market Wizard books, all of these billionaire/multi-millionaire traders emphasize the importance of managing risk. If they had a Holy Grail system, risk management would be largely irrelevant.

Anyone who has spent considerable time trading forex will tell you that there’s no “holy grail,” or one indicator, method, strategy, or system that would yield you forex trading profits 100% of the time. In fact, consistently profitable traders will more likely tell you that losing is as much part of trading as winning.

forex holy grail But since shady brokers like to foster the idea to get people to open forex accounts and hope springs eternal for human beings, there’s no shortage of trading amateurs and pros alike who continue to believe in the one-pan plan to profitability.

Here are three reasons why you’ll have better luck being the first man (or woman) to reach the sun than finding a “holy grail” for forex trading:

1. No one can prepare for ALL market uncertainties.

One of the advantages of trading forex is that the bajillion factors that move currencies make it hard for any individual or group to influence price action for prolonged periods of time. Unfortunately, this also makes it difficult for traders to predict future price action.

Unless you gain a superpower that lets you know what central bankers and economic influencers will say ahead of time; warn you of the next natural disasters and terrorist attack, or prepare for similar circumstances, then you’ll unlikely to find a holy grail anytime soon.

2. Humans move the market

At least for now. Though Robopip and mechanical trading systems in general have gained popularity over the last few years, humans still control the ebbs and flows of the forex market. Human behavior is one of the reasons why we still see trading opportunities, where price doesn’t reflect its value based on available data and existing market themes.

Mike may be interpreting an economic release in a different light and place orders in the opposite direction of Harvey’s. Elliot, who handles a corporate account, may hold on to a losing position rather than close a losing trade. Multiply these everyday scenarios and we get an unpredictable mix of potential price reaction.

3. No strategy is profitable in ALL types of trading conditions

Those who have spent some time with markets know that, like human behavior, there are patterns that tend to repeat themselves on the charts.

EUR/USD could react to stochastic signals and trade on a 100-pip range for days. Likewise, AUD/JPY could be counted on to bounce lower from a 100 SMA retest.

But what if the pattern ends and price transitions into another pattern? For example, EUR/USD could suddenly break from its range and keep stochastic in the overbought area as the pair switches to a trending setting. Stochastic, which had been reliable, is now useless while trending strategies start to make sense again.

Most trading systems only work well until price shifts into another pattern. The continuous shifts in trading conditions and the unpredictable timing of when they occur make it difficult for traditional technical tools to be reliable all day every day. It takes discretion to spot shifts in patterns and to identify which strategies would yield profits.

Just because there’s no holy grail doesn’t mean you can’t be profitable trading forex. Many traders are already trading full-time and even more are content to be consistently profitable. The key is to control your risk. Since you can’t eliminate it, the least you can do is to control it with proper risk management.


veteran trader first focus on risk management,money next come

“You should always be able to find something where you can skew the reward risk relationship so greatly in your favor that you can take a variety of small investments with great reward risk opportunities that should give you minimum draw down pain and maximum upside opportunities.” Paul Tudor Jones

“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.”George Soros

“Frankly, I don’t see markets; I see risks, rewards, and money.” Larry Hite

“It is essential to wait for trades with a good risk / reward ratio. Patience is a virtue for a trader.” Alexander Elder

“Paul Tudor Jones [had a principle he used to use] called 5:1. […] he knows he’s going to be wrong [sometimes] so if he loses a dollar and has to spend another dollar, spending two to make five, he’s still up $3. He can be wrong four out of five times and still be in great shape.” Anthony Robbins on Paul Tudor Jones

“The most important thing is money management, money management, money management. Anybody who is successful will tell you the same thing.”Marty Schwartz
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what we want: 1+1+1+1+1+1+1+1+1=9 <3
what market delivers: 1+2+8+7-4+0-5+8-4-5+1=9 :problem:


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