If you found the Holy Grail, would you share it with the world?

I once bought a course and to this day I'm haunted by what this popular guru let accidently slip. He said that these days he was too busy teaching to actually trade. Think about that for a minute. He was living off of other people's hopes and dreams and in doing so was living their dreams.

These days I've seen an evolution in the landscape where people try to sell the idea that you can't get rich quick and instead they sell another dream via support groups or training. To me, both of these types of people are feeding off the dreams of other people.

on the other there's this idea of alpha decay where the more people that know, the less effective your edge becomes

If you found the Holy Grail, would you share it with the world? By Holy Grail, all I mean is a system or methodology that can consistently yield profits in all market conditions however it does it and also make a good ROI.

Would you ask for compensation? I once bought a course and to this day I'm haunted by what this popular guru let accidently slip. He said that these days he was too busy teaching to actually trade. Think about that for a minute. He was living off of other people's hopes and dreams and in doing so was living their dreams.

So far there've been alot of people that have been trying to sell the dream of systems and strategies or even signals that make bank. These days I've seen an evolution in the landscape where people try to sell the idea that you can't get rich quick and instead they sell another dream via support groups or training. To me, both of these types of people are feeding off the dreams of other people. That isn't to say they don't produce value, but if they created an absurd amount of value they would be renown across the internet.

Just as this is two sides of a coin, so too is the question of the Holy Grail. On one side there's the idea of a self-fulfilling prophecy (candlestick patterns) and on the other there's this idea of alpha decay where the more people that know, the less effective your edge becomes (arbitraging). What are your thoughts?

1. Suppose you could make a few percent above risk-free investment (Treasury bills) a year, with absolute consistency. You should realize that you would be better than almost all the major hedge and investment firms, the famous "big boys"...

2. Suppose you had some decent trading methods for the smaller retail trader, but not get-rich-overnight methods. You might want to "teach" or sell that too, and you might do better if you did. A lot of sales or seminars might make you more than modest day-trading returns....

[Alpha decay] I think the market's probably way too big for this to be important. What I mean is, if I had a super-duper system, would it be realistic to think that if I made it public that everyone would jump on my bandwagon and ruin my own returns?

If you found the Holy Grail, would you share it with the world? By Holy Grail, all I mean is a system or methodology that can consistently yield profits in all market conditions however it does it and also make a good ROI.

Would you ask for compensation? I once bought a course and to this day I'm haunted by what this popular guru let accidently slip. He said that these days he was too busy teaching to actually trade. Think about that for a minute. He was living off of other people's hopes and dreams and in doing so was living their dreams.

So far there've been alot of people that have been trying to sell the dream of systems and strategies or even signals that make bank. These days I've seen an evolution in the landscape where people try to sell the idea that you can't get rich quick and instead they sell another dream via support groups or training. To me, both of these types of people are feeding off the dreams of other people. That isn't to say they don't produce value, but if they created an absurd amount of value they would be renown across the internet.

Just as this is two sides of a coin, so too is the question of the Holy Grail. On one side there's the idea of a self-fulfilling prophecy (candlestick patterns) and on the other there's this idea of alpha decay where the more people that know, the less effective your edge becomes (arbitraging). What are your thoughts?

The amateur,

If your system is so great, why are you selling it? Why not just trade it and rake it in?

The Master,

You won't be able to execute it.

Ron

With all due respect, your response sounds like a non-answer with the implication that retail trading is a pipe dream. My premise is that a Holy Grail is a something whether it be a system, strategy or methodology that has an actually decent edge beyond chance that works for a retail trader. I'm talking edge and you're talking mentality. Do they go hand in hand? Yes to a degree, but if you have the best mentality in the world and you're trading a system that will fail in a retail account 99.9% of the time, then it's pointless discussing psychology. Last I checked, Mark Douglas's work--I've only dabbled in his introductory stuff--is primarily focused on trading mechanically with a probabilistic outlook and working on fortifying a trader's mentality. As in, once you've defined your edge simply trade it without regard to the outcome. That is very different from, for example, having a system that if traded properly can produce 50% ROI over a year with a minimal chance of exploding.

We are at different points of the traders evolutionary arc.

Retail trading is doable... absolutely. You need an edge (usually more than one), of course...like any business.... But what you need more than your edge are intangibles. Stuff related to life in general, which of course includes trading because it is part of life, if one so chooses.

Patience to wait for the edge to materialize. Perseverance to carry on, staying the course however long it takes. Wisdom/discernment understanding market context related to edge.

Truthfulness with yourself. Is this really your edge or just almost out of time and you need/want trades. If you don't trade today.... Are you a trader? Traders trade, right?

Decisiveness and moderation will net more profits consistently than greed and haste.

Process. Having a process where the intangibles are trained into you will be your Holy Grail.

The edge is the easy part. (Relatively speaking)

Ron





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The edge is the easy part. (Relatively speaking)

futures.io

I’ll throw in my two cents. I’ve developed a few trading models that are likely to outperform the broad market in both absolute and risk-adjusted return. I trade these models and I share them with my family. I would not sell these models because 1) I don’t want to lose my edge and 2) I don’t want to make money from marketing to struggling traders, I want to make money from trading.

Now as far as daytrading goes, I have failed 100’s of times to write an intraday black box algo that is profitable. The only alternative then becomes discretionary trading. When I reach a point of consistent profitability I will certainly share my methodology for free because I think it is less likely for a discretionary trader to lose their edge due to ‘overcrowding.’

-Zimmer

The idea that trading edges are always a big secret never to be disclosed is imo not the reality. Professional traders are just ok to share basic idea's about edges. Lot of them are exploiting known edges like selling insurance, taking on risk others don't like. There is no Holy Grail in the market, the market is too efficient, every edge comes with it own risk profile. A trading operation is to trade and combine multiple of those edges to shape your equity curve that fits your risk profile.

I agree that there is no holy grail. But the combination of edges I currently trade is likely as close as I’ll ever get. I don’t want to incur any additional risk of degrading performance by sharing these models. One of my favorite quantitative traders, Oddmund Grotte, shared many ideas on his blog but did not share his most profitable edges while he was exploiting them. He is far more intelligent than I and if he was concerned with losing his edge due to “overcrowding” then I think I should be cautious as well. I am exploiting ‘unknown’ edges that, as far as I can tell, no one is posting about online. I’m not selling premium I am timing the market and allocating to asset classes using stats-based market-timing models.

I’ll throw in my two cents. I’ve developed a few trading models that are likely to outperform the broad market in both absolute and risk-adjusted return. I trade these models and I share them with my family. I would not sell these models because 1) I don’t want to lose my edge and 2) I don’t want to make money from marketing to struggling traders, I want to make money from trading.

Now as far as daytrading goes, I have failed 100’s of times to write an intraday black box algo that is profitable. The only alternative then becomes discretionary trading. When I reach a point of consistent profitability I will certainly share my methodology for free because I think it is less likely for a discretionary trader to lose their edge due to ‘overcrowding.’

-Zimmer

I agree that there is no holy grail. But the combination of edges I currently trade is likely as close as I’ll ever get. I don’t want to incur any additional risk of degrading performance by sharing these models. One of my favorite quantitative traders, Oddmund Grotte, shared many ideas on his blog but did not share his most profitable edges while he was exploiting them. He is far more intelligent than I and if he was concerned with losing his edge due to “overcrowding” then I think I should be cautious as well. I am exploiting ‘unknown’ edges that, as far as I can tell, no one is posting about online. I’m not selling premium I am timing the market and allocating to asset classes using stats-based market-timing models.

I think these are very important points, along with the post by @rlstreet above.



I don't think that the high-speed algo traders, for instance, are necessarily trading like we do (and they aren't), but I also think that they have things that they keep close to the vest, and they want to keep it that way.



There's also the simple factor of how reproducible an "edge" is.



For instance, if I had a good automated strategy, there is no way on earth that I would share the code, or even give a very detailed description of it. Why? Well, because if they had the code or something that would make writing it fairly easy, any one in the world could be in there at the same time as I was, making the same trade that I was. Even if it didn't affect my returns -- and, given the staggeringly huge size of the markets, it probably would not, unless it became very popular -- I just wouldn't want to hand out a free lunch after it had taken me time and effort and risk and loss to get it. I am not generally inclined to be selfish, but in this case my attitude is simply, "Find you own, bub."







Now, as to purely discretionary trading, the way that different traders will implement, or try to implement, a strategy, and the extent to which various individual psychological and other judgmental factors will come into play, makes it pretty well impossible for anyone else to be making the same trades at the same time. For that matter, anyone is going to make their own changes to the method anyway as they apply it, even if not entirely consciously, and I think that there is not a real danger of free-riding. You have to work to master discretionary trading.



So I would be more open there, and even want to be helpful. The situations are dissimilar enough to make the appropriate response different also.



Bob.

I think this is probably correct, as a description of how the professionals generally operate. (Actually, not being one, I can't be sure of this, but it is consistent with what I have gathered, anyway. )

We run into the most odd and fanciful ideas about how professionals trade, and in particular, about how trading algos trade. While some of these ideas probably are sometimes right, I think that for the most part, the big professional operations exploit edges that are well-known, just not usually available -- for instance, high frequency trading firms utilize very high speed operations and hardware -- where things like, "How long does it take light to traverse this distance" are a factor -- to take advantage of very small, temporary market opportunities.

We have at least one high frequency trader here (I won't drag him in by tagging him) who, I would judge from some of this posts now and then, would smile at our assumptions about what his firm and its competitors do.

An example from the old days would be the pit traders, back when all trades got matched up manually by guys hollering out their bids and offers and making odd hand gestures, or whatever they did.

These guys simply had an obvious edge due to their unique position in the market. Since everything had to go through them or one of the others on the floor, they had a simple way to get in front of outside orders. When the pits died, a lot of them didn't make the transition to "screen trading," where they didn't have any built-in advantage.

By the way, I do think it is possible to have an edge and to exploit it, and I have seen this play out in many different ways in trading journals here for a long, long time. It just isn't going to be all that easy, for the simple reason that your competition is out there trying to do the same, and you just may not be better at it.... Of course, you might, but it's not that likely. I don't think it's a mystery why, as we are often told, most traders fail. (The numbers are often given in the 90% range, although I imagine they are just being repeated without much actual data. But I also think they are very high, possibly higher.)

The reality is always that competition makes success in any market difficult.

Bob.

------------------

Edit: with all that said, the high frequency firms have very talented math guys working up market models to give them a way to find the opportunities they seek, and they aren't making any of that known.

Must be a reason.

Don't forget that with HFT they spend extra for microseconds and if lucky add up to a couple milliseconds advantage buying FPGA chips with custom HFT friendly enhancements, microwave instead of fiber so it's direct line of sight saving a few turns, and then there is or course the obligatory colocation at CME, staff of amazing math guys, and with the best firms there will be teams writing custom code for their own execution.

That is not a game someone without deep pockets can play.

Retail has much better odds going as far away from scalping as possible. The more distance from scalping to swing trading the better the odds in my opinion, often resulting in far better R returns. But retail doesn't like a big stop, they've been brainwashed into thinking a few ticks is enough...

In my opinion of course...

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If you found the Holy Grail, would you share it with the world? By Holy Grail, all I mean is a system or methodology that can consistently yield profits in all market conditions however it does it and also make a good ROI.

Would you ask for compensation? I once bought a course and to this day I'm haunted by what this popular guru let accidently slip. He said that these days he was too busy teaching to actually trade. Think about that for a minute. He was living off of other people's hopes and dreams and in doing so was living their dreams.

So far there've been alot of people that have been trying to sell the dream of systems and strategies or even signals that make bank. These days I've seen an evolution in the landscape where people try to sell the idea that you can't get rich quick and instead they sell another dream via support groups or training. To me, both of these types of people are feeding off the dreams of other people. That isn't to say they don't produce value, but if they created an absurd amount of value they would be renown across the internet.

Just as this is two sides of a coin, so too is the question of the Holy Grail. On one side there's the idea of a self-fulfilling prophecy (candlestick patterns) and on the other there's this idea of alpha decay where the more people that know, the less effective your edge becomes (arbitraging). What are your thoughts?

If you found the Holy Grail, would you share it with the world? By Holy Grail, all I mean is a system or methodology that can consistently yield profits in all market conditions however it does it and also make a good ROI.

Would you ask for compensation? I once bought a course and to this day I'm haunted by what this popular guru let accidently slip. He said that these days he was too busy teaching to actually trade. Think about that for a minute. He was living off of other people's hopes and dreams and in doing so was living their dreams.

So far there've been alot of people that have been trying to sell the dream of systems and strategies or even signals that make bank. These days I've seen an evolution in the landscape where people try to sell the idea that you can't get rich quick and instead they sell another dream via support groups or training. To me, both of these types of people are feeding off the dreams of other people. That isn't to say they don't produce value, but if they created an absurd amount of value they would be renown across the internet.

Just as this is two sides of a coin, so too is the question of the Holy Grail. On one side there's the idea of a self-fulfilling prophecy (candlestick patterns) and on the other there's this idea of alpha decay where the more people that know, the less effective your edge becomes (arbitraging). What are your thoughts?

The guru is within us all.

Find what works. Or not. Period.

This guy seems to think he has the holy grail. The bars look like Line Break Bars with wicks.

Sometimes you need a Guru to find the guru

LtCM

Disagree completely.

I think that becomes a challenge if your system is too good. If you have a 50:50 win rate with a 1.1 expected ROI, nobody cares. If you have an 80% win rate with a 3.0ROI, suddenly everyone cares and the smaller the frame the less liquidity and that means you can be front run or your opportunity stolen. Has anyone found such a system and shared it? Not to my knowledge. Most systems I see are just existing indicators that they rebrand, a variation of other systems that might have a unique indicator but follows the same methodology, or are highly discretionary and incredibly difficult to replicate and be consistent with. Sooo... it’s an interesting discussion.

I am afraid I disagree with your description of trading systems. As I said in the earlier part of my post, firms like Renaissance Technologies have discovered such systems and run a very tight ship and keep it very secretive. Even to the point that they sue employees who leave to go and work for competitors(Millennium). They also let employees who leave, keep their investments in the fund so that they don't share the information with competitors.

I don't think you have had a comprehensive review of systems if you think that

"Most systems I see are just existing indicators that they rebrand, etc"

I have come across systems that are much more sophisticated than that but require significant investment in education and time to use properly. Most people think trading systems are like learning to use Google. But in fact they are more like learning to play tennis. The racquet might be the same but whether you succeed depends on your ability to use the racquet and the opponent you are playing.



I do agree with you that it's an interesting discussion

Disagree completely.

Be glad to post my Holy Grail.

Here's my simple advice: Examine your strengths and weaknesses and learn to fold 'em if your personality doesn't fit the overall investment strategy you're trying to develop.

In my case, I retired in 2014, fully intending to replace my ~$150K salary with futures trading revenues. After studying the markets and various trading methodologies, setting up my home computer as a trading workstation, licensing Ninja Trader and other appropriate tools, joining futures.io (which was invaluable!) and paper-trading in a pretty disciplined manner, I came to realize that my personality was not suited to this craft. After four years of dedicated effort, I have "folded my tent" and now am concentrating on safer investments to continue to build my and my wife's IRA's. Fortunately I had not liquidated any significant amount of our investments, so we've continued to benefit from the recent bull market. It was a big decision but I'm glad to have learned so much, at minimal cost, and my wife is in agreement with my decision.

Six months ago I took a job as Operations Manager with a non-profit at about 20% of my pre-retirement salary, and every day I see how much I am contributing to the well-being of my organization, helping them to deliver in-home mental health services to low-income youths in southern New Jersey.

This may not have been the post you were looking for, but I think it may be advice worth remembering as you pursue this craft. Best of luck to you!

Geoff

I should’ve added "retail" in front. I'll need to look up RT systems, but seeing as they're so secretive I'll probably yield nothing.

That's like saying there's no point in going to medical school to learn to be a surgeon or engineering school to learn to be an engineer.
If you want to learn to be a doctor on you own it's possible but if you go to medical school it will be faster and then after that you can add your own 2 cents to medical knowledge by innovating.
Even a well documented profession like medicine has it's own share of charlatans never mind trading where all you need is enough money to open a brokerage account as your qualification.

Trader's will never give up the quest for the Holy Grail

If you found the Holy Grail, would you share it with the world? By Holy Grail, all I mean is a system or methodology that can consistently yield profits in all market conditions however it does it and also make a good ROI.

Would you ask for compensation? I once bought a course and to this day I'm haunted by what this popular guru let accidently slip. He said that these days he was too busy teaching to actually trade. Think about that for a minute. He was living off of other people's hopes and dreams and in doing so was living their dreams.

So far there've been alot of people that have been trying to sell the dream of systems and strategies or even signals that make bank. These days I've seen an evolution in the landscape where people try to sell the idea that you can't get rich quick and instead they sell another dream via support groups or training. To me, both of these types of people are feeding off the dreams of other people. That isn't to say they don't produce value, but if they created an absurd amount of value they would be renown across the internet.

Just as this is two sides of a coin, so too is the question of the Holy Grail. On one side there's the idea of a self-fulfilling prophecy (candlestick patterns) and on the other there's this idea of alpha decay where the more people that know, the less effective your edge becomes (arbitraging). What are your thoughts?

I’ll throw in my two cents. I’ve developed a few trading models that are likely to outperform the broad market in both absolute and risk-adjusted return. I trade these models and I share them with my family. I would not sell these models because 1) I don’t want to lose my edge and 2) I don’t want to make money from marketing to struggling traders, I want to make money from trading.

Now as far as daytrading goes, I have failed 100’s of times to write an intraday black box algo that is profitable. The only alternative then becomes discretionary trading. When I reach a point of consistent profitability I will certainly share my methodology for free because I think it is less likely for a discretionary trader to lose their edge due to ‘overcrowding.’

-Zimmer

If you want to become a doctor you, of course, learn from other doctors. Not gurus.

If you want to become a great doctor that comes from within

IMO. Agree or not I've said my piece.

@Big Mike @bobwest Thanks for the mentions.

There's definitely no holy grail.

...

An indirect consequence of the no-free-lunch theorem is that almost everything is a risk premium, not an alpha, it's just not always obvious what latent risk you're taking on. I feel everyone needs to know this before working on a strategy.

This will probably not be read by the ones who most need it, so let me just repeat it here.



Folks, read this post in full and think on its meaning. If you're not sure about the lingo, "alpha" refers to doing better than a market bechmark. It could be called having an "edge."

If you're not sure who this is, he's the guy who's beating you.

Bob.

--------------------

Edit: for context, refer to these posts:

Would you share your Holy Grail? The idea that trading edges are always a big secret never to be disclosed is imo not the reality. Professional traders are just ok to share basic idea's about edges. Lot of them are exploiting known edges like selling insurance, taking on risk others …

Would you share your Holy Grail? BTW, I'm pretty certain even if artemiso came in and laid out bullet points on how they accomplish their edge, there is a near zero chance it could be put into action without the personnel he has assembled. Simply knowing the "holy grail" …

I don't think the issue is in the reading. There are different kinds of learnings. Intellectual learnings and experiential learnings. The advise you are giving can only be learned experientially.
Therein lies the rub.
Edward O Thorpe said in his biography (A man for all markets) that when he was a kid his mother repeatedly warned him about touching a hot stove. He thought he knew what it meant to touch a hot stove but it was only after he experienced it that he understood what it meant

I would share my system with anyone, you just have to ask. I would hesitate to put it out there, because it does work for me, but I would not want to endure the criticism.

I would share my system with anyone, you just have to ask. I would hesitate to put it out there, because it does work for me, but I would not want to endure the criticism.

RoqRif Post some picks of your chart that would be interesting to see what
works for you

I would share my system with anyone, you just have to ask. I would hesitate to put it out there, because it does work for me, but I would not want to endure the criticism.

I would be willing to post some pics of my chart, but I don't think this is the correct thread. Honestly, I don't come to this forum that often. I work a full time job and email is easier for me. I' guessing Bob will let me know where to post

RoqRif Post some picks of your chart that would be interesting to see what
works for you

I would share my system with anyone, you just have to ask. I would hesitate to put it out there, because it does work for me, but I would not want to endure the criticism.

I posted this many yrs ago on a similar thread. Still true today, if not more so.

"No one discloses the secret location to their hidden treasure".

So if one really. really believes this to be true,(most believe it to be true, but desperately want it not to be) then one also can recognize the real question that is actually being asked. Which is: Is there any one out there that actually makes money trading, and will they tell me exactly how they do it?

Or another way of saying it: What do you know, that I don't? And will there ever be a time that I can get it out of you?

What's the "Hidden Treasure"? The "Edge". An actual buy/sell signal and target that is profitable and repeatable.

I posted this many yrs ago on a similar thread. Still true today, if not more so.

"No one discloses the secret location to their hidden treasure".

So if one really. really believes this to be true,(most believe it to be true, but desperately want it not to be) then one also can recognize the real question that is actually being asked. Which is: Is there any one out there that actually makes money trading, and will they tell me exactly how they do it?

Or another way of saying it: What do you know, that I don't? And will there ever be a time that I can get it out of you?

What's the "Hidden Treasure"? The "Edge". An actual buy/sell signal and target that is profitable and repeatable.

I posted this many yrs ago on a similar thread. Still true today, if not more so.

"No one discloses the secret location to their hidden treasure".

So if one really. really believes this to be true,(most believe it to be true, but desperately want it not to be) then one also can recognize the real question that is actually being asked. Which is: Is there any one out there that actually makes money trading, and will they tell me exactly how they do it?

Or another way of saying it: What do you know, that I don't? And will there ever be a time that I can get it out of you?

What's the "Hidden Treasure"? The "Edge". An actual buy/sell signal and target that is profitable and repeatable.

That guy is being disingenuous and is trading in hindsight. He’s essentially using a variation of Renko, which is incredibly difficult to trade on NQ because of the fast price action. His first entry would’ve been a stop out and his second entry would’ve likely been missed because.... you had anywhere from less than a 1 second to under a minute to take that trade and would likely get slippage. Look at the timescale on the bottom. Every system looks like a holy grail in hindsight when you can see the result and don’t have to factor in time for analysis. Hence why he’s not flexing about making $10k, but trying to sell you the potential of $10k.

The only thing legit about that video is his use of the higher timeframe Renko variation because he’s identifying the major swing high or low and then taking trend trades off that using a simplified fib restatement. The entry chart is pure BS.

Obviously everyone has their own holy grail -- it's the best they can figure out.

I did a lot of research, and I only found 4 or 5 analysis techniques that actually are logically sound and work. The rest are just nonsensical confusion that makes simple things more complicated.

IMHO of course

The way to trade the market is not by looking at indicators...

So indicators freely available in trading software are useless ... but freely available youtube trading videos are useful. Got it.

Moderator Notice If you are going to reply, take the time to do it right. Don't be a smartass please. Even if I were to agree with your cynicism, you have to communicate why -- not make remarks like yours. This is not ET. If you think he is wrong, then tell him why based on your experience. Educate him. Discuss. If that doesn't work and you are somehow upset, stop viewing the thread. Remain respectful at all times on this site.

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