The holy grail trading system, Random walk, and Market cycles

A lot of traders believe that they will find as they call it “the holy grail trading system”. This trading system will basically print money while they retire young and head to the beach with a favorite drink in hand.

While you will for sure get to that lifestyle if you follow the systematic trading approach, you first have to spend a lot of blood, sweat, and tears to achieve it. The first thing you have to do is understand that you shouldn’t dream about the “holy grail trading system” because it doesn’t exist.

So far you’ve learned what is systematic trading and what is a trading system. In the previous chapter of this series, we spoke about what is the best approach for systematic trading beginners.

The majority of traders who are new to systematic trading believe that the goal of systematic trading is to find one system (THE system) that will make profits all the time. In reality, it is much more than that.

In this article, you will learn what is the closest you could get to that by understanding one of the keys to successful trading.

Topics overview:

  • Is the market a random walk?
    • Is there predictability power in looking at the past? The argument between Technical analysis and Random walk theory
  • What are the three major types of price movements in the markets?
    • Learn about the three major types of price movement regimes on the market
  • Regime switching
    • Learn how the constant change of price movement regimes affects your trading.

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