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The Holy Grail of Trading, Nadeem Walayat's Trading Lesson's

InvestorEducation / Learn to Trade Oct 17, 2009 - 01:03 AM GMT

By: Nadeem_Walayat

InvestorEducation

Theories, methodologies and systems abound that purport to be the holy grail of trading, the usual tendency is towards ever greater complexity where the reader just needs to commit that bit further before they 'get it' usually by which time many years have passed and the shelves are full of materials, an example of this is found in Gann Analysis, yes W.D. Gann was an legendary trader from the pre-war era but even more so he was a legendary publisher of books, trading materials, courses, and letters.


Where the more one learns the more one needs to learn more, at the end of which lies the path towards confusion as the act of analysis far supplants the act of trading, long gone is the actual understanding of price momentum and long since replaced by master and cardinal squares of this that and the other.

Now don't get me wrong ! Gann KNEW what he was talking about, for he truly believed in everything he wrote, after all he truly believed he had found the holy grail with a new discovery rolled out every so often to sell to his readership, and therein lies the danger because there is nothing more convincing than a body of work created by those that actually believe that they have found the holy grail of trading!

Against this how can someone believe a person that tells you straight that there IS NO HOLY GRAIL ?

The key to successful trading IS to focus on reacting to price movements in real time with as little input from analysis as possible, that coupled with controlling ones psychological responses to having put money at risk which can only be achieved by decreasing the position size to a level where individual profits and losses do not result in one breaking out in a sweat !

Now how a person reacts to price movements depends on the mechanism deployed to determine price triggers, after all you could deploy Gann analysis to generate triggers, similarly you could deploy elliott wave and any multitude of other methodologies, but in my opinion the ones best suited towards generating price triggers are those that are the most simplest and easiest to understand of methodologies and those are support and resistance levels and basic trendlines because it does not require you to pick up volumes of literature to understand and therefore lets you concentrate on what is really required and that is to practice generating triggers, practicing reacting to price movements and practice entering and exiting positions.

Source: http://www.marketoracle.co.uk/Article14286.html

By Nadeem Walayat
http://www.marketoracle.co.uk

Copyright © 2005-09 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on the housing market and interest rates. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 400 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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