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There certainly is a Holy Grail!

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PennySeven
452
PennySeven  

It is generally accepted in the trading community that there is no Holy Grail. 

That is a very human and absolutely normal way of dealing with the subject. 

As many of us know, there are a number of fundamental items in the economy that are fundamentally wrong, but, the human race developed the economy through the ages even with some of the most basic concepts being totally wrong. An example is the generally accepted accounting model used since the beginning of money. In it, capital is never updated while the world economy has generally been in either an inflationary or a deflationary mode.

So, we can be totally wrong, but, being the human race, we carry on none the less and we improve none the less. We adapt.

It is easy to show that there is a Holy Grail as follows:

As long as you can explain every valid BUY and SELL entry in the market in terms of your trading plan, then your trading plan is the Holy Grail. That is absolutely correct.

You may not be able to trade the market correctly all the time in terms of your trading plan, but as long as you can afterwards explain every valid entry in terms of your trading plan, then it is a Holy Grail.

When you cannot explain the start and end of a valid move in the market you are trading and the time frame you are trading, intra- or inter-day, or weekly or monthly, etc., in terms of you trading strategy, then your trading plan is not the Holy Grail. 

I think the above explanation is correct in terms of logic.

I know everybody disagrees with the above based on the generally accepted view, but, how do you disprove the logic of the above view?

I think we should rather say that it is generally not possible for us to follow Holy Grail trading plans because of our human weaknesses. 

Obviously acts of God and natural disasters are dealt with in terms of your stop loss which is an essential part of every trading plan.

As soon as you cannot explain a valid market entry in terms of your current trading plan, you simply go the the next available time frame till you can explain it. Then that is your updated Holy Grail. It is an absolute fact in technical analysis that the longer the time frame, the fewer the false signals that need a higher time frame to smooth them out.

Amir Yacoby
1354
Amir Yacoby  

Let's examine only the pure statement, without the additive superlatives and adjectives.

"As long as you can explain every BUY and SELL entry in the market in terms of your trading plan, then your trading plan is the Holy Grail."

(I removed the word "valid" and the "That is absolutely correct" because they are not part of the statement but the writer's opinion).

So, the writer says if you can explain your buy and sell entries (even not mentioning the exits, but let's assume he means you can "explain" those too) then it is a "Holy Grail".

What does "Holy Grail" in this context means? Is it an always win method? of course not.

Later the OP states the negative part of that same statement (when you cannot explain the start and end of a move in the market... it is not a "Holy Grail")
and at the end concludes that the common believe that there is no Holy Grail is based only upon the inability of human nature to follow it's plan blindly (what about numerous robots who fail in real time trading?)

Well, it is very easy to contradict, unless I haven't understand the whole statement.

Sergey Golubev
Moderator
101587
Sergey Golubev  

Just a suggestion - it should be written as the following:

"Holy Grail"

Sergey Golubev
Moderator
101587
Sergey Golubev  

This is interesting thread - 

Forum on trading, automated trading systems and testing trading strategies

I want to find the bug of a "holy grail" I build. this results are too crazy to be true. i know there is a bug but I want to understand it

Gabriel Mejia, 2015.11.30 06:07

I present you guys.... the holy grail......tataaaaa

no...just kidding. this is a crappy EA that converts 900 USD into 300.000 USD in about 5 years in testing. EURUSD H4

its a Martingale EA. 

Obviously  I know that this is imposible.  And test results dosen´t mean anything.   forward testing with a live account is needed.  But as an intelectual exercise I want to understand the reason it produces those results on backtesting. I want to understand what is the mistake done by the code or by metatrader history data  that produce this kind of results. This EA works on EURUSD H4 everythick. Can you guys please educate me where is the catch. This code was writen by me but those are not the results I was expecting. As a matter of fact, I was just doing a intelectua excecise when I writed the code.  
The history data was dawnloaded from http://www.histdata.com/download-free-forex-data/. I downloaded the 1M information for EURUSD (5 years of data) since 2010 and then used the periodconverter script to generate all the timeframes (M1,M5,M30,H4)
Someone can help me to find the error and how is it generated?.

 (I suspect is a problem with the history data) 

Strategy Tester Report
thankfull
ETXCapital-Live2 Server (Build 910)

SímboloEURUSD (Euro vs US Dollar)
Período4 horas (H4) 2010.10.06 00:00 - 2015.11.27 20:00 (2010.10.06 - 2015.11.28)
ModeloCada tick (el método más preciso basado en todos los períodos menores disponibles)
Parámetrosprecio_entrada_largo=0; precio_entrada_corto=0; volatilidad=1; riesgo=3; max_perdidas_consecutivas=1; val=101; alturaMacd=0.0004; promedio_ganancia_macd=0; activatendencia=1; tipo_metodo="Metodo_convencional"; tipo_sistema="Directo"; distancia=110; s1=9; s2=3; s3=3; m1=1642; m2=50; metodo=0;
Barras en la prueba7365Ticks modelados28234174Calidad del modeladon/a
Errores de gráficos mal agrupados666247
Depósito inicial600.00Diferencial16
Beneficio neto total317964.93Beneficio bruto341797.33Pérdida bruta-23832.40
Factor de beneficio14.34Rentabilidad esperada27.62
Disminución absoluta0.00Disminución maximal5080.20 (2.30%)Disminución relativa11.07% (1382.57)
Total de operaciones11512Posiciones cortas (ganado %)11478 (99.77%)Posiciones largas (ganado %)34 (55.88%)
Operaciones de beneficios (% del total)11471 (99.64%)Operaciones de pérdidas (% del total)41 (0.36%)
MayorOperaciones de beneficios2038.56Operaciones de pérdidas-2936.00
MediaOperaciones de beneficios29.80Operaciones de pérdidas-581.28
Máximoganancias consecutivas (beneficios en dinero)2090 (46549.95)pérdidas consecutivas (pérdidas en dinero)5 (-1687.55)
Máximobeneficios consecutivos (número de ganancias)52640.00 (672)pérdidas consecutivas (número de pérdidas)-2936.00 (1)
Mediaganancias consecutivas441pérdidas consecutivas2

 

 



Sergey Golubev
Moderator
101587
Sergey Golubev  

Does "Holy Grail" may have a bug in code?

PennySeven
452
PennySeven  
Amir Yacoby:

Let's examine only the pure statement, without the additive superlatives and adjectives.

"As long as you can explain every BUY and SELL entry in the market in terms of your trading plan, then your trading plan is the Holy Grail."

(I removed the word "valid" and the "That is absolutely correct" because they are not part of the statement but the writer's opinion).

So, the writer says if you can explain your buy and sell entries (even not mentioning the exits, but let's assume he means you can "explain" those too) then it is a "Holy Grail".

What does "Holy Grail" in this context means? Is it an always win method? of course not.

Later the OP states the negative part of that same statement (when you cannot explain the start and end of a move in the market... it is not a "Holy Grail")
and at the end concludes that the common believe that there is no Holy Grail is based only upon the inability of human nature to follow it's plan blindly (what about numerous robots who fail in real time trading?)

Well, it is very easy to contradict, unless I haven't understand the whole statement.



"What does "Holy Grail" in this context means? Is it an always win method? of course not."

Of course, Yes!             I will clarify. 

I´m trading the €/$ and my Holy Grail just gave a BUY signal :-) I must be strong and follow it :-) :-) Just checking the confirmations on longer time frames. Back soon, as trading allows.

This is like a maths proof. I treat it as a proof in logic.

I am honest and admit that the only acceptable proof are $$$$$$$$$$$$ of course! 

But, first the logical proof. 

Actually, come to think of it: I am not trying to prove that a Holy Grail is profitable, for example, allowing for losses. What I am trying to prove is that a good trading plan is a Holy Grail, meaning always 

right, that is, never making losses. 

Wow. That is the ultimate proof. Let me try.

My Holy Grail was right about they BUY in the €/$. Now it gave a SELL. So, I am still trading. I can only attempt this proof bit, by bit, as trading allows.

Sergey Golubev
Moderator
101587
Sergey Golubev  

Post your "Holy Grail" here on our free forum, and the people will find the bugs in it.

PennySeven
452
PennySeven  
Sergey Golubev:

Post your "Holy Grail" here on our free forum, and the people will find the bugs in it.


Yesterday I made 10.5% profit for the day. 

Right now I am 11% profitable for today - three profitable trades and three losses. 

So, that is sort of an acceptable level of bugs, for me. Thank you for the offer of debugging my Holy Grail.

The full trading plan is also quite lengthy. Lots of rules to remember.

Sergey Golubev
Moderator
101587
Sergey Golubev  
PennySeven:

Yesterday I made 10.5% profit for the day. 

Right now I am 11% profitable for today - three profitable trades and three losses. 

So, that is sort of an acceptable level of bugs, for me. Thank you for the offer.


This is free forum and everything should be for free here.
So, post your EA by source code on this thread and forget about.


PennySeven
452
PennySeven  
Sergey Golubev:

This is free forum and everything should be for free here.
So, post your EA by source code on this thread and forget about.



I think EA stands for Expert Adviser. I do not know how to do that. 

Is this forum just about EAs?

What I am trying to state is that a trading plan is only acceptable when the rules can always profitably deal with all normal market conditions, i.e., excluding news events that need specific rules with acts of God and natural disasters dealt with in terms of the ever present Stop Loss.

As such it has to be a Holy Grail. It has to be right all the time - with no losses, otherwise it is not an acceptable trading plan. When a trading plan cannot be used to always, after the event, describe the reasons for the BUY or SELL or TAKE PROFIT in terms of the rules of the trading plan, then those rules have to be improved or the time frame must be increased to smooth out false signals with the time frame. 

Thus, an acceptable trading plan has valid rules for all normal market situations formulated in terms of, say, two main indicators and then the normal trend lines, support and resistance and two moving averages crossing over for confirmation signals. 

Basically, what I am claiming is that a trading plan is only acceptable only when it is a Holy Grail - in theory.

I do admit that normal human weaknesses (various) and inexperience generally result in the situation that it is generally extremely difficult for us to follow a good trading plan (Holy Grail) correctly.

So, what I am claiming is that all actual, real, acceptable trading plans, are Holy Grails. When a trading plan is not a Holy Grail, it is, in principle, not acceptable at all.  It has to be a Holy Grail - in theory, to qualify as an acceptable trading plan.

In my opinion what trading is about is learning the extremely difficult job of how to calmly follow all the rules in a person´s Holy Grail trading plan - in the extremely stressful situation of real time trading. 

Basic Principles - Trading Operations - MetaTrader 5 Help
Basic Principles - Trading Operations - MetaTrader 5 Help
  • www.metatrader5.com
is an instruction given to a broker to buy or sell a financial instrument. There are two main types of orders: Market and Pending. In addition, there are special Take Profit and Stop Loss levels. is the commercial exchange (buying or selling) of a financial security. Buying is executed at the demand price (Ask), and Sell is performed at the...
Sergey Golubev
Moderator
101587
Sergey Golubev  
PennySeven:

I think EA stands for Expert Adviser. I do not know how to do that. 

Is this forum just about EAs?


It is the forum about Eas, trading systems, indicators and "Holy Grails".
And there will be Christmas soon ...
So, if you have "Holy Grail" - post it here and the people will be happy
[i am joking ... Christmas will not be soon]
:)

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