Shortly after finding our industry and then plunging head first into our unique world and environment, we come across many strange industry terms and references. One term we quickly see referenced on many forums and blogs are the words, “Holy Grail”.
In medieval legend the Grail was the cup or platter used by Christ at the Last Supper, and in which Joseph of Arimathea received Christ’s blood at the Cross. Quests for it undertaken by medieval knights are described in versions of the Arthurian legends written from the early 13th century onward.
The term “Holy Grail” means different things to different traders. But for the majority it means an elusive, sure fire, 100% winning strategy which (when used) results in us experiencing very little in the way of drawdown and even fewer losing trades.
Many experienced traders will recognize this phenomenon of ‘Grail chasing’ from way back in their early days of trading and quickly recall the stressful point, at the start of their trading careers, when they spent months looking for that Holy Grail of systems. We were determined to unlock a key to uncover vast riches and wealth; if only we could discover that one key critical mechanism which would allow 100% success. And we’d spend months, in some instances years, on our version of a medieval crusade which, despite many within our peer group of traders advising how the chase was fruitless, we just couldn’t face up to the truth, that there is no Holy Grail of trading, at least not in the form that we originally envisaged…
However, during our ‘Grail chasing’ days, months and in some circumstances years, we may discover something unexpected, a light might go on in our grey matter as we begin to recognise that our crusade actually does have a purpose and a destination leading to a revelation. We gradually (but surely) begin to accept that our Grail is not what we expected, but nevertheless does actually exist, just not in the form that we’d imagined.
Any trading edge, that can form part of a trading plan and overall successful strategy, is in fact a personal Holy Grail
We need to ask ourselves what we’re actually chasing when we go in search of an edge that’ll ensure we can trade with 100% certainty and accuracy. We are in fact chasing the impossible dream as there can never be a system of trading that offers up 100% performance with no losing trades or drawdown. The quicker we acknowledge this indisputable notion then the quicker we’ll move on to finding a successful trading system and strategy. However, where is it written that a winning trading system has to be 100% successful, couldn’t a system be 50% accurate in terms of high probability set ups leading to winning trades, but still be regarded as a Holy Grail?
If we can be absolutely sure that our trading system has positive expectancy, when measured over a significant period of time and in particular a significant amount of trades, then surely it can be classed as a Grail? The overall point that we’re making is that we often try to navigate through the impassable and go in search of the impossible when the entirely possible and probable is there within easy reach. That Holy Grail (HG) system could be in front of our very eyes right now as we observe our charts.
Millions of us have found our ‘HG’ trading system but have failed to acknowledge that its a deeply personal search. Some may take months, some may take years, but what is for sure is what we set out to (hopefully) discover is unrecognizable from what we find. So how do we go about right now if we’re fairly new to trading that we don’t go on what many in the west term a “wild goose chase”. Quite simply we defer to certain suggestions we’ve often made on this blog and these articles in which regular readers will have noticed a theme; we set about creating realistic ambitions and targets and then build our strategy from back to front.
For example, we could set ourselves a target of 50% account growth over the year. Roughly 1% per week. We look for a risk of 0.1% on each trade and hope to have an R:R of 1:2, gains of twice our risk. We hope to have 50% winners and our winners to exceed our losers in terms of pip value by twice. Quite simply we’ll hope for perhaps a max of ten pips lost for every twenty pips gained.
As we begin to construct our trading method as part of our overall strategy and plan we begin to very quickly realize that we could give our winning trading a plan a title, let’s be bold Nd call it our Holy Grail and why not if it fits all the parameters of a winning strategy?
