Are you still looking for the Holy Grail of trading? That indicator that never fails and always delivers amazingly accurate signals? If yes, then welcome to the club, because I am looking for it as well, but actually my Holy Grail is training and hard work, not something that I pop on my charts and it makes me rich in 2 weeks. I’ve been doing this trading thing for quite a while now, but I still think I have stuff to learn, to discover so the journey never stops, but each day I want to find something to add to what I already know. However, there was a time when I didn’t think like this and instead I was sure I can find one indicator or system that will never fail.
My First Holy Grail
When I started trading, the internet was not very eager to help newbies. These days you can go on forums, ask politely for help on a certain matter and you will probably get it, but back in the day people told you to get lost as an answer to most questions that didn’t involve a simple Yes or No. I didn’t know what Meta Trader 4 is and you couldn’t find online courses (at least not free and I didn’t have any money to pay for them). So it took me quite a while before I discovered the Stochastic and believe me, when I did, I thought I’ve found the Holy Grail. Now remember, this was the opinion of someone who had never seen an indicator in his life, so for me it was amazing to have an indicator that… indicated direction, even if it wasn’t always right. I soon realized that I cannot rely on the Stochastic alone – sure, it’s a great indicator but you have to know how to use it. I was simply trading the crossover and the overbought/oversold levels, expecting to make money, but soon what I believed to be the Holy Grail turned out to be nothing more than a mediocre indicator. So the search was on again…
Holy Grails All Over the Place!
After my encounter with the Stochastic, I was hooked on indicators and I found out there are hundreds of them; by now I was using Meta Trader 4 (which already has enough indicators built in) and this opened the door for custom indicators. These are coded by different people, some are free and some are paid, but the latter type is usually advertised as the closest thing to a Holy Grail. This was it for me, I had to get my hands on one of them but like I said earlier, I didn’t have any money to pay for them, so the pirate in me found one lying around the internet. I installed immediately and I was speechless, I couldn’t believe my eyes. The indicator was the Holy Grail! Looking back on the charts I couldn’t find a single bad trade; all its signals were spot on, no drawdown, just profit, profit, profit. Ok, so I started trading it; the first trade was a loss… so was the second and third. Hmm, something must be wrong. I checked the entries again to see if I didn’t make a mistake and guess what: the signals were gone, disappeared as they were never there.
I didn’t know it at the time but this was my first encounter with the repainting indicator. After a while I understood how these work: they constantly recalculate past data and change according to current market conditions. In plain English, if the indicator says price is going down but price goes higher, the crossover (or whatever type of signal was given) will disappear, so if you take a look on historical charts (by scrolling to the left), this type of indicator will seem like it’s the Holy Grail. There are guys who say that repainting is not a big issue and you shouldn’t care if the signal changes or disappears after you open the trade because all you care for is what happens at the time when you enter the trade. I don’t see how that can be considered good thinking but I wont argue because I’ve had my fair share of repainting indicators and I know they don’t work for me. If people can make money with them, that’s great but I would advise you to check always if your indicators repaint or not. That way at least you know what you are dealing with.
Third Time’s The Charm
Classic indicators, custom indicators, nothing seemed to work but I wasn’t about to give up so I kept searching and searching until I found something very new at the time: a Signal Provider website! It worked like this: the website had 2 experts (could be 3, I don’t remember) and they displayed statistics of performance for the last couple of years. They were making thousands of pips per month and I could do the same if I would just follow their signals. These signals were given in a Chat Room available right on the website, but of course I had to pay for it… and I didn’t have any money because my Grail search wasn’t going too well. Fortunately they had a 7 day trial period so I jumped right on it. Guess what: the signals were nowhere close to the performance advertised. Small trades, a few pips here, a few pips there (this was Forex, because Binary Options were still in a very early stage) and often when price went the other way, the “expert” would say something like Ah, I closed it right away because I realized it was a bad trade. Dude, really? I am following your advice because I am a newb so maybe next time you’ll let me know if the trade is bad so I can close it too.
Overall a mediocre experience, I didn’t make any money and I didn’t lose much… all until one day when the signal provider instructs us to open a long trade (equivalent of a Call) on EUR/USD. I opened it and immediately price started to skid south. My loss was increasing and the expert wasn’t saying a word. People in the chat room were becoming anxious and so did I – Where is the expert? Should I close my trade? What if price starts going up right after I close the trade at a loss? I didn’t do anything because I didn’t know what to do; after all, I wasn’t a trader, I was a searcher for the Holy Grail or for someone to hold my hand and show me where to open and close my trades. An hour later the guy comes back, saying Hey guys I was at lunch, I hope you had a tight Stop Loss… my account was blown already. Zero left in it because price kept falling and I kept hoping it will reverse. However, I did learn an important lesson: if something is free it doesn’t mean you cannot lose money. I didn’t pay for the signals, but because they were bad I ended up losing money.
The Holy Conclusion
Maybe it’s time for you to stop being a searcher and become a trader. I know that in the early days of your trading carrier, everything seems more appealing and you can be fooled easier – I know because I was there and I got fooled. There’s no magic indicator but there are tons of people who claim they have it and they will give it to you for a measly sum or for free. Don’t, please don’t believe that. The only thing close to a Holy Grail is your hard work and education.