GANN ARTICLES

Hidden Knowledge,
Technical Analysis and
The Holy Grail- Part 2
By Dan Dodd
If you stay in the commodities trading
business for even a short time,
the idea of the ‘Holy Grail’ of trading
systems or indicators is sure to
come up. You will hear it all the
time. I have always understood references
to ‘The Holy Grail of Trading’ to
mean some system or method or indicator
that is perfect- a perfect winner- a
perfect fi t for all traders that if applied
consistently will give anyone the ability
to always be in the right market at the
right time in the right direction, and out
in the same light. - ‘Tomorrow’s Wall
Street Journal today’. More often than
not, the term ‘Holy Grail’ is used to
describe what a system is not, how it
falls short of the ideal. In some senses,
depending on the trader, the term implies
something magical in our understanding
of trading the commodities markets, like
a genie’s lamp or a golden goose. In
another sense, the ‘Holy Grail of Trading’
implies the search for such a magical
understanding, the end of which is
a miraculous key to trading which will
make the holder of the key rich beyond
imagination.
Whether such a magical or in another
sense practical trading ‘key’ exists is at this
point immaterial; we will get to the substance
later. What is most important is how
the references to the Holy Grail characterize
us, and just what it is that we are trying to do
in our trading.
As I have outlined before, our ideas of
hidden knowledge about the markets always
fall into two camps- those who believe that
there is more, and those who believe that all
is seen now, or at least, that we already see
what can be seen. Regardless of the point of
view you hold, the idea of the ‘Holy Grail of
Trading’ is enticing. In the very same way
that Glinda the Good Witch told Dorothy-
‘You have ALWAYS had the power to go
home,’ and pointed to the Ruby Slippers with
her star wand, we ALL wonder about clicking
our heels together exactly three times
and saying ‘I am long and tomorrow Soybeans
are limit up, Soybeans are limit up,
Soybeans are limit up.’
Just what is this? A veteran trader with
many years of experience might put on a
trade and be elated and confi dent because she
has seen the same set-up 1000 times before.
(62% of these are winners. You have always
had the power to go home.) A novice trader
might put on a trade from a 1,2,3 bottom and
be elated and confi dent. (My trading guru
said that a lot of these make people rich.
46 Spring 2001 tradersworld.com
You have always had the power to go home.)
Within each of us, no matter what our background,
system or bearing, there is an element
beyond us, the Unknown, a white gap of
space into which we trade. We trade into that
space with our experience or the lack of it,
with or without a plan, with hope, with conviction,
or with fear. Very often, we click and
click and click our heels, and we are still in
OZ, and for us, at that time, there is no Magic
Key. We wonder if we ever had the power at
all. Trading into the white space is an adventure
into the Unknown. We prepare. We do
our analysis, we watch, we act. Beyond that,
we place our intentions and our actions into
the Unknown. A trader may be well prepared
and experienced or not. She may have
the fi nest technical tools and a beautiful trading
mind, and a huge account, but she will
ALWAYS venture into the Unknown with
each trade. It’s unavoidable. Even the greatest
technical traders venture into the markets
right along side the rawest novice with one
common binding cord- No one is ever certain
how this one will turn out.
To that degree, and in that way, as traders
of any kind we are bound by the way the
world is put together and we all start out in
the same lifeboat. How we proceed into the
Unknown will differ for each of us, but the
problem is universal and our trading problem
runs exactly parallel to the biggest human
problems of existence, whether we like it or
not. In other words, we all LIVE into the
white space just as we TRADE into the white
space. We never really know how this one
is going to turn out. The idea of the ‘Holy
Grail’ of anything is a natural and unavoidable
part of anything we do. To grow and
evolve- to get better at trading, and especially
to remain successful, we must always proceed
into the white space and in doing so,
we cannot avoid our own innate intention to
discover the world’s secrets. So let’s proceed….
For the Greeks and the Egyptians in the
really old days, living into the white space
was an ordered thing of which virtually everyone
was required to be conscious. Organized
religion of the time occupied center stage, its
long fi ngers reaching into the darkest crevices
of each individual life. For the sake
of moving along, let’s just say that in these
countries at that time, coming to terms with
the Unknown was an expected part of living.
Organized religion was the vehicle for this
coming to terms and it was always divided
into two parts. One part was dogmatic and
ceremonial, and the other was mystical and
esoteric. The fi rst consisted of the popular
cults while the other was the religion of Mysteries.
The religion of the Mysteries went
far beyond the cults and attempted to explain
the symbolic meaning of the cult myths and
practices. The Mysteries were secret societies,
devoted to fi nding and passing down
hidden knowledge, and it was only through
diffi cult initiation that a person could become
a part of it.
Each year, at various exact times of the
year, these societies produced passion plays,
acting out the condition of people in the
world and their relationship to their gods
in the context of hidden knowledge which
only the chosen few could know. These
plays were the only public part of the Mysteries.
Everything else, including the schools
in which the hidden knowledge was taught,
was kept secret. Beyond that, not much is
known.
I loved being a Steam Locomotive Engineer
on the Cog Railway. This particular
roadside attraction seemed to me to exist
beyond the ordinary and within the heart of
it, I found a huge white space into which I
was pushed while I wasn’t looking. In the
70’s, the Mt. Washington Railway Company
was comprised of a plot of land six miles
up a steep winding base road, 8 miles from
the nearest cross road and country store.
There was a big log cabin Base Station with
a kitchen, a snack bar, a stuffed bear, and
benches to sit on in front of a huge stone
fi re place. Black coal dust and cinders were
everywhere. There were a couple miles of
track which ran right to the summit, an
Engine Shop, a Coach Shop, 3 wooden water
towers, 7 locomotives and 7 coaches, a row
of cheesy cabins and the Boardinghouse, a 2
storey wood fi re trap boarding house where
10 or 12 of us had a room. Room and board
was $ 21 a week. When I made Engineer, I
got a raise to $ 3.00 an hour, no overtime.
Mt. Washington is famous for some of
the very worst weather in the world next
to Antarctica, and the trails leading to the
summit are lined with crosses. At 6288 ft.,
Mt. Washington is a hill by western standards,
but beautiful and treacherous and cunning
and wild nonetheless. When we workers
arrived in the Spring, we literally left our regular
lives behind, and to me, we stepped into
the Mysteries.
Because of our physical separation from
the rest of civilization, and the dated state of
our existence the place took on a feeling and
a presence all its own. Almost nothing had
changed since WWI. It was part Wild West,
part Lord of the Flies Revisited, part Itinerate
Carnival, part hat trick in a medicine show.
Every part of it was hard and bawdy. We
were connected by the only task we had, to
make our iron machines conquer the mountain
3 or 4 times a day and to bring all the
tourists, whom we called ‘goofers’ back in
one piece. Beyond that and within that there
was no structure to speak of. We made our
own rules and we fought for our place in
the kingdom. We bargained with and fought
nature and each other, like a pack of black