It is widely believed by new traders, that there is a single trading system (i.e. a single set of trading rules), that is composed of a small group of technical analysis indicators (e.g. two stochastic lines and the MACD), with a certain configuration of technical indicator settings (e.g. twenty bar and thirty bar stochastic lines and a fifteen bar MACD), that can be traded on any market using any trading style (i.e. scalping, day trading, swing trading, or position trading) and always makes a profit. Many new traders spend years searching for the holy grail of trading, believing that it is the key to their being a consistently profitable trader. If you are one of the new traders that is (still) looking for the holy grail, today is your lucky day, because the holy grail of trading is revealed in the very next paragraph.
The Holy Grail of Trading Revealed
The holy grail of trading is ... that there is no holy grail of trading. I will repeat that just in case there is any doubt ... the holy grail of trading is that there is no holy grail of trading. There is no trading system, no group of technical analysis indicators, and no configuration of technical indicator settings, that is guaranteed to make a profit. Disappointed? Well, don't be, because knowing that there is no holy grail of trading is a big step towards becoming a consistently profitable trader.
The Underlying Principles of Financial Market Price Movement
Instead of spending years searching for the holy grail of trading, new traders should spend their time watching financial markets and learning how the various aspects of financial market price movement interact with each other.
An example for short term traders (e.g. scalpers) might be watching the time and sales (also known as the tape), focusing on the ebb and flow of the buying and selling, looking for repeating patterns in the price movement. An example for long term traders (e.g. swing traders, position traders, etc.) would be reviewing many years of market data (i.e. the previous trading information) looking for price and/or indicator patterns that occur at significant prices (such as yearly highs and lows).
By watching the financial markets, keeping a detailed log of anything and everything, and painstakingly analysing your log, you will develop an understanding of why and how the financial markets move. With this understanding, you will be able to choose (or develop) trading techniques or trading systems that are based upon the underlying principles of financial market price movement (e.g. market dynamics such as supply and demand), and you will then have a significant advantage over the traders that are still searching for the holy grail.
Almost the Holy Grail of Trading
Having said (rather clearly) that there is no such thing as a holy grail of trading, there is something that is close to being a holy grail of trading, but not in the sense that might be expected. The closest thing that there is to the holy grail of trading is to learn a professional trading technique (i.e. a trading technique that is based upon the underlying principles of financial market price movement).
Learing a professional trading technique will not guarantee that you will become a successful trader (hence it is not the holy grail in the expected sense), but learning a professional trading technique is the only thing that will even give you a chance of becoming a successful trader, therefore it is the closest thing to the holy grail of trading.
