Trading (the) Holy Grail

[wilburbear]

Quote from toc:

I have a holy grail...........become a broker, everytime there is a trade you will make commissions. Not bad after all!

Everyone should read this post. Your broker makes many multiples of what you do, and takes many multiples less risk. Your surest bet is to ask for, and get, lower commissions. Or else walk to the next broker.

 

[wilburbear]

Quote from hoodooman:

I had the holy grail and it delivered 400 percent in 2 months and I've talked about it ad ad nauseam on ET with hardly any response.

Talk about it one more time.

 

[sKaLpZ]

"There are a set of money management rules that you can create in a system...."

LIR, can you indicate what some of these rules are? thanks!

Quote from let it run:

I don't think 7.5% +/yr is anything like a holygrail. That's a typical 'investment' and you'll get that if you invest in a balanced stock portfolio rather than 'trading', if you do it over the long term in almost any stock market.

For me, holy grail would be something like 500% p.a. with minimum stress i.e. drawdowns causing cashflow problems and casual monitoring of system as you believe there is no need to fade any decisions.

Don't want to be defeatist, but I think it's an order that is extremely tall. Realistically, it's your ability to manage your decisions and adapt to fundamental changes that makes you a star. There are a set of money management rules that you can create in a system with OCCASSIONAL justification for breaking them but I don't see how you can formalise a decision making model based on fundametals. Please let me know if you figure out a way of doing it though!!!

 

[jond83]

holy grail to me means to seperate all my emotions from trading.

 

[sKaLpZ]

Quote from kut2k2:

I don't believe in the "never lose" system. But I do believe systems can be designed as net-positive in expectation. So the HG would be a net-positive system that tells me what my most likely expectation on the next trade would be so I could do optimal position sizing with that info.

Interesting approach!

 

[sKaLpZ]

Quote from wilburbear:

Everyone should read this post. Your broker makes many multiples of what you do, and takes many multiples less risk. Your surest bet is to ask for, and get, lower commissions. Or else walk to the next broker.

I've thought about what you're saying, believe me... yet I tell myself, how could the broker make more than I do (in currency trading) when I open a trade and the broker takes 1 or 2 pips (the spread), then I close the trade and make over 100-pts, for example.

 

[sKaLpZ]

Quote from jond83:

holy grail to me means to seperate all my emotions from trading.

Does everyone agree that the HG needs have all emotions factored out?

Personally, I think Jond83's point is valid and would say that this is a component of the HG.

 

[let it run]

Quote from sKaLpZ:

"There are a set of money management rules that you can create in a system...."

LIR, can you indicate what some of these rules are? thanks!

Sent you an email a week or so ago, SkalpZ, we can talk about it on that if you want to reply...

 

[let it run]

By the way, I also think emotions need to be taken out of trading to find the HG (no emotions = no stress + clear & objective decision making).

Furthermore, I honestly don't believe you can find a system that will NEVER result in a losing trade. If you can't accept losing as part of trading then find a new game to play, in my book.

How can a HG remove emotion (even when you do not involve emotions in your decisions) when you are still in control of your money, whether your system is good or bad? If you are inherently emotional when you trade then this wont go away just because you have a good trading system- you could be greedy, too scared whilst offside etc.

I suppose belief on your system as it proves itself will minimise emotion over time, but if you get angry when you lose and over-euphoric when you win, this is still a handicap in my opinion...

This is why you need trading rules i.e. money management that you believe in and STICK TO.

 

[MoralHazard]

Quote from sKaLpZ:

well... I been running a few multi-currency pair arbitrage set-ups on demo accounts (different variations) and so far, while they've been profitable, their returns have been pathetic and they are not exactly without risks - though so far I've booked all wins, I can see where there could be future losses.

either they are not the HG or the structures need more work.

It makes me reconsider the term "riskless arbitrage."

Example (always positive, never a loss): you mail me a (valid) lottery ticket.

[edit] zero cost, positive payoff in some states