You must have seen advertisements on social media platforms in which advertisers try to persuade the target audience to teach some kind of Holy Grail trading strategy to double the money overnight in the stock market, especially in the futures and options market.
Beginners and novice traders after watching this type of claim might be thinking “WOW, they will teach us some kind of advanced trading strategies that no one knows, which can make huge profit for them overnight”.
Now the question is “what is a Holy Grail Trading Strategy” and do we have such a set up or indicator in technical analysis to double our money overnight.
Many traders are looking for a holy grail in trading, that is why these people try their best to lure them to make money.
There is nothing wrong with wanting to make money. But, if your objective is to double your money overnight, you will not be in the trading game for long.
The get rich quick scheme must be avoided in order to make money in trading.
Trading in the stock market or in any other market is a skill that can be learned. But there is no magic button in technical analysis which can tell you exactly when to buy and sell to make a profit with 100% accuracy.
The reality is there can not be any magic formula for trading because no one can predict the future direction of the market with 100% accuracy.
No single trading strategy without a risk management plan will work all the time. That is why you will keep hearing from technical analysts talking about risk reward ratio, risk management techniques, discipline, money management and patience all the time.
Why there is no Holy Grail in trading
Ask yourself following questions;
- Can any one of you tell me what the central bank will do with its monetary policy?
- Do you know when will be the next terrorist attack and how big it will be?
- Can you predict a natural disaster like an earthquake or tsunami and the impact of it?
- Do you know when the next war will be and how big it will be?
When these types of unexpected events take place they can rock the market.
You can not quantify or calculate the impact of these events or human behaviour into an elegant mathematical equation to completely get rid of risk.
That is why technical analysts say trading in the stock market or in any other financial market is a game of probability. If you have developed the right strategy, then most of the time your trading strategy will work and sometimes it will fail, however, your failure should not wipe out your profit and trading capital.
If you have not developed your trading strategy yet, then learn technical analysis, price action and candlestick charts to understand the market first, then work on different strategies to find your own trading strategy.
Trading in the stock market and in any other market requires skills, experience and mindset.
One of the best ways to manage unexpected events is by preparing yourself with stop loss order to limit your losses if they occur.
Successful traders focus on managing risk and reward in a trade. They will not look for the holy grail trading strategy to make money in the stock market as there is no Holy Grail in trading.
Disclaimer: In addition to the disclaimer below, please note, this article is not intended to provide investing or trading advice. Trading in the stock market and in other securities entails varying degrees of risk, and can result in loss of capital. Most investors and traders lose money. Readers seeking to engage in trading and/or investing should seek out extensive education on the topic and help of professionals.
