An edge is using a pattern/statistic advantage to your winning favor, but it can be fleeting in the world of trading unlike in a casino game where it is fixed.
Define “Edge”
- Thread starter KGTrader4
- Start date
Your edge is your entry and exit rules that should be good enough to net you profit (when executed over the long run).
Edges can only be proven in hindsight (either backtest or past real profits made).
Unlike say black jack card counting, there is no way to prove a trading edge will remain valid. We can only hope it continues to be profitable for us. This opens up all sorts of other questions, like knowing if an edge is still valid, and when to stop trading a previously profitable edge that seems to have stopped working.
Edges can only be proven in hindsight (either backtest or past real profits made).
Unlike say black jack card counting, there is no way to prove a trading edge will remain valid. We can only hope it continues to be profitable for us. This opens up all sorts of other questions, like knowing if an edge is still valid, and when to stop trading a previously profitable edge that seems to have stopped working.
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Edge is an advantage that is present over a time frame long enough so as to rule out positive variance.
The most primitive edge is to cut your losses and let winners run. You can come out ahead throwing a dart at the stock list on the wall if you just do this.
The most accurate and best edge by far is to be a member of congress, so you can buy pharma stocks before mandating an experimental (no liability) injection on the population at large.
The most accurate and best edge by far is to be a member of congress, so you can buy pharma stocks before mandating an experimental (no liability) injection on the population at large.
I dont know why....
Indian teenager Praggnanandhaa beats world chess champion Carlsen
Rameshbabu Praggnanandhaa, who in 2016 became the youngest international master in history at 10, beats Carlsen in online championship.
Indian chess prodigy Rameshbabu Praggnanandhaa poses for a photograph on his arrival at an airport in Chennai after becoming the world's second youngest chess grandmaster ever [File: Arun Sankar/AFP]
Published Feb 2022
India’s teenage chess grandmaster Rameshbabu Praggnanandhaa has won praise for a stunning victory over world number one Magnus Carlsen in an online championship.
Praggnanandhaa, 16, who in 2016 became the youngest international master in history at age 10, beat Carlsen late on Monday at the Airthings Masters rapid chess tournament.
“It’s about time to go to bed as I don’t think I will have dinner at 2.30 in the morning,” a visibly calm Praggnanandhaa said after the 39-move victory playing black.
A trading edge can be anything that gives you cash advantage over other traders in the market. For instance, you may notice that by using an indicator in a particular manner you are able to predict the price movement accurately, or that a certain pattern tends to occur every time before big price moves, so by taking advantage of it you can earn profits. So edge is basically something that makes your approach unique while at the same time helps you win maximum trades.
Your trading edge is a strategy or an approach to trading instruments I the financial markets that allows you over time to be profitable?
Edge can be summed up in a formula that applies to any instrument. Like risk management, everyone like to talk about it, but few people actually can distinguish between sustainable, stylistic, and systemic edge. There are several types of edges. For example, cyclical edge. Some people know how to trade GARP (growth at reasonable price). Some know how to trade value. Others know how to ride Beta.
Their edge last as long as markets reward their style. Unfortunately, investors find it difficult to distinguish between skill and style. In other words, are managers good (or bad) because of what the markets reward (or punishes), or are they good because they adapted to what the markets reward.
There has been a lot research on the topic. Quants sometimes refer to this as luck versus skill.
Their edge last as long as markets reward their style. Unfortunately, investors find it difficult to distinguish between skill and style. In other words, are managers good (or bad) because of what the markets reward (or punishes), or are they good because they adapted to what the markets reward.
There has been a lot research on the topic. Quants sometimes refer to this as luck versus skill.