Conceptually define your trading edge

[BlueWaterSailor]

I thought Lazy Days was in Florida ...
https://www.lazydays.com/locations/florida/tampa-florida/rv-resort
I used to travel fulltime in a motorhome and visited Lazy Days.
Was trading while traveling right up to September 2008 and then something happened ... it wasn't good.

That's actually where I bought my MH. Didn't like any of the ones they had, but the more I kept describing what I wanted, the odder the look on the salesman's face got... he finally drove us out to his house, and his personal MH was literally exactly what we were looking for.

I'm sitting in it now, at a beautiful shaded campground on a river - half-way back from southern Colorado to Florida.

 

[maximumpossiblesuffering]

Generally familiar with the math concept but how does it apply to trading?

Take a look at a payoff diagram of a long option position. Then consider a price change in the underlying of, say 1% within 1 day in both directions. A favorable price move will return more profit than what a unfavorable price move will return in loss within a brief window of time. The negative theta of this position type will of course make it expensive to carry this trade for longer periods. Now consider volatility skew and term structure. It is possible to find option spreads that have both positive theta and convexity (Gamma). For example, a short put / long call risk reversal in ES.

 

[joker542]

My edge is cutting losses Early and let profits run until , momentum fades. Here is a insight that I rarely see someone discuss every stock in a long run has its own characteristics and it is highly correlated to the volatility of a stock . For example stocks with lower volatility will work better with mean reversals , and stocks with higher volatility will be more profitable with trending strategies.
Note ** - this is not my opinion I have backtested a lot of strategies to come to this conclusion.

 

[themickey]

My edge is cutting losses Early and let profits run until , momentum fades. Here is a insight that I rarely see someone discuss every stock in a long run has its own characteristics and it is highly correlated to the volatility of a stock . For example stocks with lower volatility will work better with mean reversals , and stocks with higher volatility will be more profitable with trending strategies.
Note ** - this is not my opinion I have backtested a lot of strategies to come to this conclusion.

Hmmmmm, I would have thought it would be the other way around, low volatility better with trending - high vol with mean reversals/reversion.

 

[tortoise]

My edge lies in my ability to define a trend and act on it.

 

[MarvelousMarvinH]

I think my edge is in understanding that things change so fast that it is hard to have a statistical edge.

Any statistical analysis to support this edge ?

 

[qlai]

I think my edge is in understanding that things change so fast that it is hard to have a statistical edge.

This is a very interesting point of view. Would like to hear more.

 

[schizo]

My edge is finding somebody who is a worse trader than me.

 

[BrooksRimes]

Surprising (to me) 123 Lazy Daze Lanes do exist in 3 states, but not in Yakima, WA.

1. Convexity.
2. The historical excess of implied volatility versus realized volatility.
3. The historical performance of calendar spreads under volatility term structure inversion.
4. Reversion to mean under strictly defined conditions.
5. Scheduled event mispricing.
6. Regulatory change arbitrage.
7. Fading MaximumPossibleSuffering.

For further details, send $5.00 or a bottle of booze to:

MaximumPossibleSuffering
C/O Groundskeeper Leroy
Easy Time Trailer Park
123 Lazy Daze Lane, Number 2
Yakima, WA 98908

 

[wrbtrader]

I think my edge is in understanding that things change so fast that it is hard to have a statistical edge.

I think you can find the statistics but due to the fact that things can change so fast...

The data from the stats needs to be updated to include info from the changed market environment to determine if there's still a statistical edge.

That would then imply the trader needs to have the ability to recognize when market conditions have change to prompt the trader to do statistical analysis again to include info from the new market environment.

wrbtrader