Traders and investors have always dreamed of magical formulas or Holy Grails enabling them to beat the market and reap huge profits. Pursuing Holy Grails only ends in disaster. For example, among the junk you will find out there: Black boxes or secretive computer systems where the rules are hidden. Black box systems lose in the real world. They are useless. The absolute key is a proper overall education.
Is There Really a Holy Grail That Unleashes the Secret of Trading?
What do we consider Holy Grails?
- CNBC, Cramer, Bartiromo, Faber, etc.
- Every infomercial running late night.
- Books about Warren Buffett.
- Ken Roberts.
- Brokers.
- Fundamentals
- The list can go on and on…
If you are here thinking trend following is some trading secret, please exit now. If you are here seeking a pitchman pretending to be your market hero, again wrong web site. All that said, we still have people come to this site in search of the trend following (or Turtle system) secret. If you want the quick fix, the instant profit landfall or the insider’s tip, no one can help you. Clearly, some would just rather have illusions than reality.
What is reality? Great trend following systems use rules, logic, parameters, methods, processes, formulas, data, and research. You will not find the Holy Grail here.
- Hard work, sustained concentration, and drive are the so-called secrets
- No one can predict the future.
- If you can take the would-be, could-be, should-be out of life and look at what actually is, you have a big advantage over most human beings.
- What matters can be measured, so keep refining your measurements.
- Prices can only move up, down, or sideways.
- Losses are a part of life.
Some Turtles won big. Some lost big. Why?
Why Black Box Systems Fail
The black box selling proposition is the Holy Grail in its most cynical commercial form. The system works, the seller says, but the rules must remain hidden to protect the proprietary edge. This framing is designed to prevent the buyer from evaluating whether the approach has any merit. A legitimate systematic trading approach has nothing to hide. The rules are the system. If the rules cannot withstand scrutiny, the system has no edge. The secrecy is the tell.
Trend following’s rules are not secret. They are documented, published, and available. The edge is not in knowing the rules. The edge is in the discipline to follow them through drawdowns, losing streaks, and the extended periods when no signals appear. That discipline cannot be purchased from a late-night infomercial. It is built through education, practice, and honest engagement with how the approach actually works and what it actually requires.
What “Trading Secret” Actually Means
The bullet point list of what trend following actually requires says everything. Hard work. Sustained concentration. Drive. The ability to look at what actually is rather than what should be. Measurement of what matters. Acceptance that prices move in only three directions and that losses are inevitable. None of these are secrets. All of them are difficult. The difficulty is why most traders never achieve consistent results and why there is a market for Holy Grails. If the reality were easy, no one would pay for the illusion.
The CNBC anchors, the late-night infomercials, the Buffett books, the Ken Roberts courses, and the broker recommendations all share one feature: they offer the appearance of an edge without requiring the work that produces a real one. Each one is consumed and replaced by the next. The trader who consumed all of them is no closer to consistent profitability after years of searching because the search itself is the wrong activity. The right activity is building a system, testing it, and following it with discipline. That process is documented in the TurtleTrader story.
Frequently Asked Questions
Why do black box trading systems fail in the real world?
Because rules that cannot be examined cannot be evaluated, improved, or trusted through difficult periods. A system whose logic is hidden from its user is a system the user cannot understand well enough to follow with conviction. When the inevitable drawdown arrives, the user has no framework for judging whether the system is working as designed or has broken down. They exit at the worst moment, which is typically the moment when continuing to follow the system would have produced recovery.
Why is trend following not a trading secret?
Because the rules are published and available. The approach is documented in books, research papers, and on this site. The edge is not in proprietary knowledge. It is in the consistent application of sound rules across a large number of trades over time, which requires education, discipline, and patience. These are not secrets. They are requirements that most traders prefer to avoid by searching for an easier alternative.
What is the most useful item on the reality list?
The ability to take the would-be, could-be, should-be out of life and look at what actually is. This is the complete description of the systematic trader’s required mental posture. The market does what it does. The price is what it is. The system responds to what is, not to what should be. Every failure to follow this principle, holding a loser because it should recover, avoiding an entry because the price seems too high, is a substitution of opinion for reality. Reality does not negotiate.
Trend Following Systems
Want to learn more and start trading trend following systems? Start here.
