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What are the minimum requirements for a Holy Grail?

  • #1
  • First Post: Jan 5, 2018 5:04pm Jan 5, 2018 5:04pm
One of the most common phrases you read/hear in trading forums is 'there's no such thing as a holy grail." The thing is no one has (yet?) attempted to accurately define what a holy grail might be before saying it doesn't exist.

It's a bit like a theist saying "God exists!" and an atheist saying, "god(s) doesn't exist!" when neither one can agree about what exactly they mean by the term. Is it a man with a white beard in the sky? A superior alien? The Divine Creator of Everything? A primary cause? Something unknowable?

So it is with the Holy Grail of trading - is it a system that never ever loses? A system that generates the maximum return possible with the least risk? With the smallest investment? What would a system have to be able to do - for you to say 'yes, at last, the grail has been found'. And then, is this the end of inefficient markets as we know them? What would disqualify a system from being the holy grail and merely render it a 'system worthy of trading, but could be improved'? A 'grail contender' if you will.

Of course a definition won't stop people from saying they have the holy grail or that it can't be obtained, but it could be interesting, maybe even helpful, to know when a system is so perfect that to tamper with it any further would be to kill the golden goose.

History
Probably everyone knows the story of the holy grail comes from English and French Arthurian legends. The grail was the cup that Christ used at the Last Supper and if you could find this holy relic, it would grant you immortality, or something similar. You probably remember that scene from Indiana Jones and the Last Crusade. "He chose poorly."
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The knights of the round table searched fruitlessly for the grail, and the one who came closest, (Percival? Galahad?) merely got a glimpse of it before it disappeared. The other knights died or came back to Camelot empty-handed. So, inherent in the idea of a grail is the idea that it can never be obtained. That it will always be just out of reach. That questing for it is fruitless, and possibly perilous. I assume it's the same in trading. A holy grail system is one that is so good, it can never quite exist. However, a 'practical grail' would be one that is as close to this ideal as possible.

Profitability and Performance
In your opinion what would a grail system need to be in contention?
Minimum win rate?
Minimum Sharpe ratio or profit factor?
Maximum drawdown?
Maximum 'value at risk' ?
Minimum expectancy?
Minimum return on investment?
Minimum Compounded Annual Growth Rate? (CAGR)
Minimum or maximum account size?
Minimum wait time between profits?
Minimum number of trading opportunities?
Does it need all of these, a few of these, or something else entirely?

Likelihood
We know for sure that there are trading systems. We know that some of these systems are inherently better than others on any metric you could choose. There are some subjective qualities to what makes a good trading system, but if we assume the purpose of trading is to make profits, some systems will simply be more profitable than others. If we knew all the systems in existence, and understood their expectancies, then we could rank them, and select the best among the best. Would that top system then be the 'holy grail'? Would it be close enough to be a 'practical grail'? In my view the answer to the last must be yes. Therefore the grail likely does exist, or at the very least, the most performant system that can reasonably be devised by man has been created and is being used to trade. This is the system against which any future grail contenders must be compared. What does it look like?
  • #2
  • Edited 8:37pm Jan 5, 2018 7:46pm | Edited 8:37pm
It doesn't look like anything. The holy grail is understanding the market enough to be part of that 9%(which, yes, means understanding all of the systems). At that point the Holy Grail is the market itself. But the market is always and constantly changing so it never looks like anything other than what it is... a series of events with systems built around it.

To say that God does or doesn't exist is the same as saying the Holy Grail does or doesn't exist. 'God' is just a partial understanding of the universe... but enough that it can work for the individual. So too the "Holy Grail" is just a partial understanding of the market... But enough to make it work for the individual. Since it doesn't look like any specific thing you can't go looking for it unless you already know what you're trying to find.

Maybe this will help others to see some of it. I know it was one of the first things to 'click' for me.

I also happily challenge any aspiring Grail contender to tell me whether or not it exists.
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"The fun is in the hunt. Not the kill."
  • #3
  • Edited 8:57pm Jan 5, 2018 8:41pm | Edited 8:57pm
I will gladly give you the Holy Grail: Want what the Market wants.

Another definition of the Holy Grail would be a system or method that best fits a traders belief system and personality. There are some good traders on this forum. But trying to "do as they do" doesn't usually work for most. That's because we all trade our own belief systems. The concept of AGGRESSION bars resonates to my core. I believe they give evidence on what is going on underneath the surface of the market. For me, they are a powerful tool. But they do not resonate with everyone. And if they don't resonate with a person, it stands to reason that person can't truly appreciate their power. Therefore it would be more beneficial for whom they don't resonate to use something that does. Yes, we all may marvel at this or that poster's results. But if your believe system is not in line with theirs, you wont succeed trying to emulate them.

With those things said, I believe the generally accepted notion of a Holy Grail would be a system or method that does not take losses. People have an issue with being wrong. If the system/method does take a loss and wins 99 trades out 100. Then that system/method also has to have no "drawdown" or consecutive losses. In other words, while a system that takes 5 losses in a row and then wins 495 is equivalent to a system/method that wins 99 trades out 100, a Holy Grail system/method does not lose consecutive trades ever. None of the concepts you mentioned matter. People just want to be right always. And that is why this notion of a Holy Grail does not and can not exist.
Without VSA, you're playing checkers while the Smart Money plays chess.
  • #4
  • Jan 5, 2018 8:57pm Jan 5, 2018 8:57pm
hey clemmo17 i think you have touched on an interesting debate here...

for mine 'no holy grail' means no method whereby one can just start it up, put your feet up, and watch the money roll in. That doesnt exist as the markets are simply too efficient o allow that to happen.

In that context the holy grail is that there is no holy grail.

So is the best process around the holy grail?
Renaissance is by far the best system trading hedge fund around, and has been for years. So in terms of been the best it is the holy grail. But that doesnt mean they sit back and just watch the money roll in. They work their backsides off to stay ahead. I dont think that is a holly grail but a group of people who are bloody good at what they do. That firm is run by an ex wartime code breaker i think.

Your refer to a number of measures of profitability and performance. I think they are spot on.

So sharpe ratio: This is the best single ratio. The best one will see is around 2. And systems are notorious for having sharpe ratios below 1.

The sharpe ration is the key to the amount of leverage that one can apply. And for what it is worth the types of leverage spoken about in this forum is pretty much financial suicide. Absolutely no one who has survived at this would go anywhere near that type of leverage. 100:1.. 200:1 etc.. That is madness

percentage win rate: Lets say up days to down days percentage. If someone has a percent of winning days of above 60 then that is suspicious. If above say 65% winning days then that person is in jail or about to go. Mid 50s is a good percentage win rate.

im drifting away from your point here i bit i think but hopefully you get what i mean.

I shall leave it at that as im curious to see if there will be any responses.
  • #5
  • Jan 5, 2018 10:33pm Jan 5, 2018 10:33pm
Quoting dkrock
I never really liked using the term "Holy Grail" to describe a trading system. I prefer to use "Flying Pig". I always assumed it meant a system that never loses, but it is impossible to create it because the market is produced by humans, and humans are not perfect. There are patterns created by the market, per the human factor, but there is not a single mathematical equation that can accurately account for each pattern. Outliers are inherent because traders do not all trade the same method for the same reasons. Each trade is a unique event, with...
May I ask the probability of Eur/Usd going up tomorrow if Trump were tonight assassinated? How about down? Does that probability add to or compound the probabilities gained from him passing tax reform or the prospect of impeachment? Does it negate those probabilities? Good luck.

I can tell you one thing with 100% probability. The market would move on Sunday. That's a system that never loses.
"The fun is in the hunt. Not the kill."
  • #6
  • Edited Jan 6, 2018 11:22am Jan 5, 2018 10:36pm | Edited Jan 6, 2018 11:22am
If you're talking about a Holy Grail method, then either it is a perfect method that generates guaranteed return at no risk -- e.g. arbitrage -- or it falls short of that by some arbitrary degree, which basically means that it can mean anything that you want it to be.

Which reminds me of the quaint story where each of the townsfolk are trying to outsmart the local sage by devising a question that he can't answer, and a devious little boy asks "how big is big?" and the sage, after pondering for a good while, replies "anything that is not small".
  • #7
  • Jan 6, 2018 12:09am Jan 6, 2018 12:09am
The only reason why almost everyone said there is no holy grail is becos less than 1% of the traders have it. If you don't have the holy grail like the rests of the 99% then of course you will said there is none due to the overwhelming vast majority who doesn't have it too but if you have it then obviously the holy grail is there becos you are currently using it to trade.
My version of a holy grail is you will know exactly where the support/resistant levels are and when and if it is breached then where the new/latest levels will be. Minimum RR must be more than 1:2 and it doesn't matter whether it is a scalp trade or any other time frames as long as RR remains 1:2 and minimum Win/Loss ratio is more than 60-75%.
Anyone who can achieve this competency level can pitch his skill with me starting with E/U pairs so that iron can help sharpens iron. To give an example on the current latest Jan 5th PA my sell trade is 12048 with SL @12075 with initial TP@ 11980 or upon spotting reversal sign. Taking profit or closing trade before achieving min RR is considered a failed trade impacting RR & W/L ratio even though one may still make some money by premature trade closing. Therefore imo making money alone does not mean you have the holy grail trading method becos market can and will take it all back and more if RR and WL ratios are less than favourable.

Cheers
GS.
  • #8
  • Jan 6, 2018 12:47am Jan 6, 2018 12:47am
Quoting dkrock
{quote} There is no probability until there is an action to measure, in the case of trading, an entry or exit. Probability requires a sample size, buyers vs sellers. There is no measurement for a non-event, so I cannot answer your hypothetical question. It is not real until it happens. Then it can be measured and traded. I assume you are talking about "predicting" or being psychic or something similar. Probability is another word for "odds" which requires a "population" based on an array. Can't "probability" anything until there is data to support...
Not psychic. Just aware of how an animal population reacts.
"The fun is in the hunt. Not the kill."
  • #9
  • Jan 6, 2018 1:40am Jan 6, 2018 1:40am
Consider the following questions.......

1. Is it an organized, logical arrangement and presentation of data for a logical purpose?
2. Does this arrangement employ accepted statistical tools which facilitate inspection, measurement, interpretation and valid conclusions?
3. In providing information, does this arrangement represent conclusions that can be statistically supported?
4. Does this arrangement define, organize and capture all change in the market?
5. In representing market activity, does it provide all the valuable information obtainable?
6. Does this arrangement facilitate interpretation, understanding and decision support rather than merely make predictions?
7. Is this presentation of data representative of market (or general business) logic?
8. Does it treat all prices equally?
9. Does it misrepresent prices as market activity?
10.Does it differentiate between opportunities?
11.Does it define market-created opportunities?
12. Does it differentiate between the conditions, allowing detection of major market changes over time? (For instance, the conditions in the 1970s were not the same as those in the 1980s. )
13. Does it funnel masses of data to a point or single entity, when in fact these data should be examined for subtle changes over a
large sample size?
14. Does it portray a large, clear and single decision-making indicator (price), when in fact, in a competitive situation, all decision-making indicators are small and subtle?
15. Is it only applicable for large samples, or can a reliable reading be conducted on a small sample size?
16. Is it hampered by happenstance?
17. Are the indicators late? Does this cause a person who is naturally (humanly) prone to be late to accentuate this problem?
18. Does it force people to use stops, setting artificial parameters?
19. Does it encourage thinking for oneself or developing experience?
20. Does it present buying rallies and selling breaks as "going with the market" when in fact a rally is advertising for sellers?
21. Does it allow people to monitor or manage with time, as markets do?
22. Does it put the majority of participants in a situation where they have a statistical advantage over the large sample size?
23. Does it put the majority of participants in a situation where they can win before they start?
24. As currently practiced, has technical analysis changed the results of those who have been exposed to it?
25. Is technical analysis conceptually logical?
Markets are not efficient, rather they are effective - Jones
  • #10
  • Jan 6, 2018 1:44am Jan 6, 2018 1:44am
There are no other human "brick and mortar" activities that has such mystical notion as a "Holy Grail"
A notion derived from religion, therefore based on superstitions and lies.

Do Engineers have their Space Shuttle "holy grail" ?
Seems to me they rely on facts and science ...

Symbolism is important for humans
This one in particular helps to convey what no one wants to admit but is all so real: failure is inevitable.
After all, the wannabe forex millionaire must have hope and always work ever so diligently with unbreakable faith towards that elusive forex trading fortune that is sure to come.
  • #11
  • Jan 6, 2018 2:29am Jan 6, 2018 2:29am
Those that have found near perfect systems like me will never show people the holy grail without some sort of compensation be it monetary or other satisfactions such as amusement derived from perhaps dropping hints at the holy grail and watching others follow these hints and discover the holy grail or come to their own conclusions.

Those that say the holygrail does not exist are those that comprise the endless sea of forex losers that flow in and out of the market that have lost, lose and will continue to lose money. Their bruised egos won't allow them to accept the fact that they failed at achieving what others have so they convince themselves that the holy grail does not exist and that no one makes money in forex in order to massage their bruised egos and they find console in the idea that they are not failures because the task is impossible and others have failed so they feel vindicated because their failing is not attributed to their incompetence or incapability, but rather the complexity and near impossibility of creating a reliable income stream by trading forex.

Sad and funny to see these loser traders. They are not hard to spot. Just look for the person who is espousing the notion that no one can make money trading, forex traders always lose or other such notions that just deflect the blame instead of reconciling the fact that they failed and they are to blame.

WOW! Don't look now, but you may even spot a few of these losers in this very thread above my post
  • #12
  • Jan 6, 2018 2:35am Jan 6, 2018 2:35am
Quoting sharingan9
Those that have found near perfect systems like me will never show people the holy grail without some sort of compensation be it monetary or other satisfactions such as amusement derived from perhaps dropping hints at the holy grail and watching others follow these hints and discover the holy grail or come to their own conclusions. Those that say the holygrail does not exist are those that comprise the endless sea of forex losers that flow in and out of the market that have lost, lose and will continue to lose money. Their bruised egos won't allow...
"Those that have found near perfect systems like me will never show people the holy grail without some sort of compensation"
==> I am 99.99999 % certain that you do not make a living from trading the forex
Those who have not found the "near perfect system" are most likely doing much better than you
  • #13
  • Jan 6, 2018 2:48am Jan 6, 2018 2:48am
Quoting Mingary
There are no other human "brick and mortar" activities that has such mystical notion as a "Holy Grail"
Incorrect. The definition of holygrail is a paramount cutting edge idea, formula, phenomenon, or product that is largely pursued. Bill Gates Microsoft's holygrail was Windows. Apple's holygrail is the iphone IOS, Coca Cola's holygrail is it's formula, Henry Ford's holygrail is the Model T, Edison's lightbulb, Tesla, any invention ever made was and is considered the holy grail and they were all very much "brick and mortar" style fields/companies

The Holy Grail is not specific to religion and trading to the exclusion of all else before and after lol
  • #14
  • Jan 6, 2018 2:58am Jan 6, 2018 2:58am
Quoting Mingary
{quote} I am 99.99999 % certain that you do not make a living from trading the forex Those who have not found the "near perfect system" are most likely doing much better than you
I do not make my living solely from trading forex nor have I ever stated that. However I do trade and have found a near perfect system although it is not my main income. I generate leads for finance companies based in Russia and the UK full time using the internet. I also do political events. I am sure there are many people who do better than me as you will always find people who are richer. I don't compare my success/wealth to others that is an insecure way to live really.

All I am saying is just because you have not achieved success in trading or anything at all in life doesnt mean others have not. By "you" I mean people in general................and also you hahaa
  • #15
  • Edited 3:23am Jan 6, 2018 3:13am | Edited 3:23am
Quoting sharingan9
{quote} Incorrect. The definition of holygrail is a paramount cutting edge idea, formula, phenomenon, or product that is largely pursued. Bill Gates Microsoft's holygrail was Windows. Apple's holygrail is the iphone IOS, Coca Cola's holygrail is it's formula, Henry Ford's holygrail is the Model T, Edison's lightbulb, Tesla, any invention ever made was and is considered the holy grail and they were all very much "brick and mortar" style fields/companies The Holy Grail is not specific to religion and trading to the exclusion of all else before and...
no, no, no. Good grief .. please.

https://www.collinsdictionary.com/di...ish/holy-grail

Emphasis on ELUSIVE

Holy Grail in American
1.
Grail (sense 1)
2. [often h- g-]
any ultimate, but elusive, goal pursued as in a quest


There is no negativity in what I said earlier. I am saying that any one actively looking for the "Holy Grail" method for trading the forex will fail.
Or anyone who believe they have found it ...
Because ... definition (above)
  • #16
  • Jan 6, 2018 3:27am Jan 6, 2018 3:27am
Quoting Mingary
{quote} no, no, no. Good grief .. please. https://www.collinsdictionary.com/di...ish/holy-grail Emphasis on ELUSIVE Holy Grail in American 1. Grail (sense 1) 2. [often h- g-] any ultimate, but elusive, goal pursued as in a quest There is...
My friend. You may not understand the definition of elusive. Elusive means difficult to attain. Not impossible. Since your understanding of the term elusive is partially incorrect , your understanding of what the term Holy Grail is also incorrect.

Starting a successful "Brick and Mortar" business can be very "ELUSIVE". Does that mean no one has done it? No. It has been done. Over and over again lol

Holy Grail is attainable so those who claim to have it may actually have it.
  • #17
  • Edited 4:12am Jan 6, 2018 3:50am | Edited 4:12am
Quoting sharingan9
{quote} My friend. You may not understand the definition of elusive. Elusive means difficult to attain. Not impossible. Since your understanding of the term elusive is partially incorrect , your understanding of what the term Holy Grail is also incorrect. Starting a successful "Brick and Mortar" business can be very "ELUSIVE". Does that mean no one has done it? No. It has been done. Over and over again lol Holy Grail is attainable so those who claim to have it may actually have it.
Again, I beg to differ.


https://www.merriam-webster.com/dictionary/elusive

Definition of elusive
: a : tending to evade grasp or pursuit

  1. elusive prey

: hard to comprehend or define: hard to isolate or identify

Good luck starting a real business that evades pursuing and is difficult to grasp, hard to comprehend, hard to define, hard to isolate, hard to identify.
This would be for a real business.... Now imagine how much more confusing it would be do do the same for a gambling habit, believing it's a real business!
and in which the elusive element is near impossible to attain and you must also find the "Holy Grail method"!, this is way beyond elusive ==> (per the legend, only a true hero can ever ever find the Holy Grail)

Do I need to define what a legend is or explain that playing the forex market is essentially gambling?
again, by definition?

  • #18
  • Jan 6, 2018 3:54am Jan 6, 2018 3:54am
Quoting clemmo17
One of the most common phrases you read/hear in trading forums is 'there's no such thing as a holy grail." The thing is no one has (yet?) attempted to accurately define what a holy grail might be before saying it doesn't exist. It's a bit like a theist saying "God exists!" and an atheist saying, "god(s) doesn't exist!" when neither one can agree about what exactly they mean by the term. Is it a man with a white beard in the sky? A superior alien? The Divine Creator of Everything? A primary cause? Something unknowable? So it is with the Holy Grail...
The minimal requirements for a Holy Grail is only one.

Your belief in your edge.

An edge can be defined as a probability of one thing happening over another.

If you believe in your edge, you will apply it consistently over a significant period of trades or a significant period of time to get the expected results.
If you are good at something, never do it for free--Joker
  • #19
  • Jan 6, 2018 4:16am Jan 6, 2018 4:16am
Quoting Mingary
{quote} Again, no. https://www.merriam-webster.com/dictionary/elusive Definition of elusive : a : tending to evade grasp or pursuit elusive prey : hard to comprehend or define: hard to isolate or identify Good luck starting a real business that evades pursuing and is difficult to grasp, hard to comprehend, hard to define, hard to isolate, hard to identify. This would be for a real business.... Now imagine how much more confusing it would be do do the same for a gambling habit, believing it's a real business! and in which the elusive element...
Haha. My friend it does not matter which dictionary website you use, you will not find the term "impossible" in the definition of the word elusive haha. Try every single dictionary out there and you will keep proving my point lol.

As for your utterance "Good luck starting a real business that evades pursuing and is difficult to grasp, hard to comprehend, hard to define, hard to isolate, hard to identify."

Not all "real businesses" as you put it are easy to grasp, easy to comprehend, easy to define, easy to identify. Many businesses have come from ideas that were hard to define, hard to identify, hard to grasp, hard to comprehend.

This has been done so many times. Windows is an example. No one thought it possible. People found this level of graphical user interface and processing to be extremely difficult to grasp and hard to comprehend, hard to define, hard to isolate. Many were screaming that it was impossible. But it was not impossible. Windows was created and became a successful business. The difficult to comprehend was comprehended, the hard to defined became defined. Why are you struggling with his very basic concept lol

Another example. Lightbulbs. People had a hard time comprehending and defining, how Edison and his think tank were able to produce and capture light within a light bulb without blinding everyone thereby eliminating gas lighting which is MUCH more difficult than Forex trading.

Same thing with Apple's IOS. Very hard to define, or grasp. All these things were elusive but not impossible. They got done. Why is this hard for you to grasp

Jesus Alan Turning for crying out loud. No one could grasp what he was doing because it was extremely hard to grasp at the time, way harder than grasping forex. But he built the turning machine, which won the war and was later called the computer.

Advances in medicine, technology, agriculture, etc were all elusive very difficult and hard to grasp and yet they were comprehended defined, and ended up producing businesses.

Forex is no different. Just because you failed at it doesnt mean others have. Why is this so hard to get?
  • #20
  • Jan 6, 2018 4:39am Jan 6, 2018 4:39am
Your Holy Grail is your strategy- good entry point/exit
Make all mistakes in demo and rain in pips in live account
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