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Wednesday, March 19, 2014

How To Be Successful Forex Trader-The Search for the Holy Grail

Many traders spend years and years trying to find the holy grail of trading. That magic indicator or set of indicators that will make them rich easily, known only by a handful of traders.
The Truth is that there is NO Holy Grail
There is no indicator or system that will make you rich easily. The best traders have no holy grail, it isn’t their system what makes them superior traders, they have other characteristics such as self-discipline, patience, they work hard, they take calculated risks, they do trade consistently based on a trading system (it does not need to be THE PERFECT SYSTEM, just a system), they follow it follow it rigorously, they know they will never stop learning so they have their mind open to every possibility, and most importantly, they have accepted the risk, they know deep in their hearts they are risk-takers.

How come there is no Holy Grail?
Because the market changes. The market is never the same, each moment is unique, patterns are just similar. If all patterns are unique then the outcome of each one of them is statistically independent from one to the other. If every pattern is different, then all set of indicators or systems will fail from time to time.
The two most common mistakes traders are likely to make in this subject are:
Most traders try many systems or set of indicators and them drop them out because they failed a few times. They never give them the time required to accurately test the system.
Another common activity is when traders start out with an easy system, when it fails, they add an indicator that could had kept them out of that particular trade. Then it fails again and they add another indicator. They end up with a very complicated system that is hardly tradable. Then they drop out the system and the process starts all over again.
The important thing here is the valuable amount of time lost in these practices. Some of them spend a lifetime trying to find the nonexistent: the Holy Grail of Trading.

FACT - There is no holy grail. It isn’t wise to try to find the perfect system or indicator that will keep you out of losing, because losing is just part of this business, like spending in raw material in any other kind of business. Instead, you can focus in one indicator/system that will keep you in the market when good moves happen. With good money management and a good risk reward ratio, the odds will be in your favor!

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