4 Ways of Thinking That Can Radically Improve The Way You Trade – Principle #2

In the last installment we covered the virtue of abolishing all of your current assumptions and unlearning habits of thought and practice that may or may not be helpful. In short, we went over the benefits of doubting everything in order to build a more sound perspective on approaching the markets.

In this installment, we’re going to talk about an obscure and elusive idea that, for some strange reason, many traders seek: the Holy Grail (of trading, that is). This idea seems to captivate, if not intoxicate, many a trader, despite the popular assertion that no such thing exists. Most traders accept this assertion, yet, when they find a methodology or system that works with relative consistency, they immediately rush to the conclusion that perhaps they’ve discovered the holy grail of trading. That is, until the system begins producing losses.

So let’s spend time on this because, after all, it’s what most traders seek to discover.

Tip #2 – Recognizing the “Holy Grail” for What it Really Is


The Holy Grail and It’s Double

There are two holy grails of trading that we will explore. Both are elusive.

The first is one that most traders can understand: the idea that there exists a system-of-all systems. When a trader finds a system that works, they may think they have found the holy grail, but eventually the system will stop winning and their thinking that the system was perfect will be proven wrong. But in reality, there is not a perfect system that will always perform profitably – no such thing exists.

Therefore, there is no “holy grail,” at least in that sense.

The second kind is something that most traders can see, except this one often eludes their understanding. It’s not a system, method, or style. In fact, it’s not even a “thing.” It’s an operation; a way of working.

Some successful traders have found a way of working that, if they were to describe it, might sound very much like the holy grail of trading/investing.  A few real-life examples: Warren Buffett, Ray Dalio, Jim Rogers, George Soros, perhaps even Larry Williams–all have found something that seems to work consistently. And those are just a few of the well-known players on the scene. It’s likely that there are plenty of others who aren’t as famous.

So are most traders just looking in the wrong place, or are they looking for something that may exist but not in the form in which they seek?

And with regard to these successful traders/investors who’ve found something, what is it that they’ve found?

The Holy Grail – What It Might Be

We often miss the notion that successful trading may not necessarily be attributable to the trader, let alone his or her method (or system).

And trading success probably has little to do with a trader’s technology, or even his or her level of capital (although the latter does tend to influence the way one trades).

Successful trading is about resonance.

It’s about how a given methodology combines (or resonates) with a trader’s natural inclination to analyze and trade.

It’s about how a trader’s natural inclination can enhance a very particular methodology or approach to trading.

It’s the relation between a particular trading approach and a particular kind of trader.

It’s the way the two elements combine, a conjunction that may work for one trader though not necessarily for another.

  • Not everyone will have a knack for scalping the markets; some might be better off swing trading instead.
  • Some traders who are awful at trend trading might find counter-trend trading more suitable to their personality.
  • A short-term trader who’s awful at technical analysis might feel more at home with fundamentally-based long-term investing.
  • Some unsuccessful momentum traders may find success trading against volatility using limited-risk option spreads.

The variations can go on and on.

The holy grail doesn’t exist in general form.

But  if you find something that works with you–your natural tendencies, inclinations, risk tolerance, and more–and if truly does work for you, then that just might be your own personal holy grail.

To seek the mythical holy grail is to follow in other traders’ footsteps–to find that idea or product that somehow magically produces profits.

If you do find it, you might find that what works for someone else might not work for you.

Don’t blindly follow others’ ideas, methodologies, or systems.

Eventually, you will have to forge your own path.

And once you find something that works for you on a very practical and realistic level, maybe, just maybe, you’ll find that it brings you closer to success.





Please be aware that the content of this blog is based upon the opinions and research of GFF Brokers and its staff and should not be treated as trade recommendations.  There is a substantial risk of loss in trading futures, options and forex. Past performance is not necessarily indicative of future results.