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It depends on how you define your edge. A set-up is only a small part of your edge. A set-up can stop working but if the other components of your edge, money management, trading strategy, position sizing & discipline etc are still in place you can stay in the game.

What do you consider a lousy or a bad trade? In my opinion a trade that follows your plan and gets stopped out is a good trade with a bad outcome.

TA show you what happened in the past. I'm not sure about chicken bones. It's up to the trader to figure out the probabilities of the history repeating itself. If something has happened regularly in the past it might be worth a bet that it will happen again. The trader determines if the risk is...

It has been said if you can't define your edge you don't have one. Without giving your edge away what process do you use to define it?

I tend to look at things backwards. When I come up with an idea, I spend more time trying to prove that it doesn't work rather than looking for instances where it did. I've often suggested to new traders that they should spend time studying why traders fail. Learn what not to do. I was just...

That leads to the question how do you get to that point? The point where it's pretty difficult to lose money. I take it you've seen lots of traders screw up. I'll rephrase my question. If there are many ways to screw up, what would you consider the top 5 and how would you guard against them?

I don't really pay any attention to the losses I planned for. The ones I remember are the ones that I should have taken earlier. I look at the account balance at the end of the week and review trades to make sure I followed my plan.

Scatty: The majority of traders fail. What in your opinion are the top 5 reasons that traders are not successful?

OK thanks. It's just that there are several "gnomes" out there. An investment gnome, one who posts on tradingview, and there was one who wrote articles years ago.

Please enlighten us.

I trade what I call momentum stocks. Stocks that are going up. Is there an indicator you would use to rank momentum stocks?

I'm in the game to make money so I'd go with the option that made me the most money.

I question whether a 40% win rate and a 40% edge are the same thing. I tend to make more money with my winning trades than I lose when I get stopped out. I'm not sure if you can define that as an edge.

Quite simple really. What are you expecting to happen? If that doesn't happen what are you going to do?

What technical stuff?

Who else would it be? If I can be right 50% of the time I'll do really well. I make money with 40%

I agree that what I'm seeing is lagging. But then isn't all the information you gather. I suppose if you do enough research to know what other traders don't, (I assume that's what the institutions spend their money on) you could have a leading indicator. As an institution, how are you going to...

No I'm not amazed at all. The financial industry has done a great job of convincing us we are too dumb to look after our own money. Even friends (millionaires) who own their own businesses are investing with advisors who sell them mutual funds. Taking losses is the toughest hurdle to overcome...

One of the reasons I don't spend a lot of time on economics and fundamentals is because I can't possibly compete with the institutions who hire the best people and have untold dollars to spend on research. Once the institutions decide to act on their research then maybe I can follow along and...