defining "edge" with discretionary trading

MKTrader said:
I think it's just a matter of semantics. An edge can be very slight edge...like beating the S&P 500's annual returns by 0.5% yearly with a little less volatility.

As for the original question, I'm not sure if you can define it. The only possible way is to actually trade until you have a sample with statistical significance that has included many types of market conditions (bull, bear, low vol, high vol, flat, etc.).
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"Edge" is kind of a "sure thing".... like when an insider gets to buy stock before its IPO @ $.01/share. That's edge! Or when a desired person is recruited to a company and given stock options @ $.50/share while the stock is currently at $20. Retail traders get no such "edges".
 
MKTrader said:
I think it's just a matter of semantics. An edge can be very slight edge
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That's like I said... "the best we can do as traders is like counting cards in Black Jack." You should know when the deck favors a bigger bet and when you should back off. Successful trading is the same
 
KMeriwetherD said:
I want to know how I have placed the odds in my favor and why I should believe my actions will equate to profits over time.
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That is EXACTLY the correct question! Proper understanding and execution of Technical Analysis will be your personal Yellow Brick Road.
 
Scataphagos said:
How you "behave" doesn't meet the criterion of "edge".
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Like most of the time on ET discussions result in discussions about semantics. If it goes that way the discussion becomes irrelevant.

I know that if somebody can make in the long run consistent profits, he has an edge, or call it whatever you like. The evolution of his account proofs what he has: an edge, continuous luck, probabilities, special behaviour... but he surely will have $$$$$$$$$$$$$.
He does not care if he meets the criterion of "edge".
 
Mtrader said:
Like most of the time on ET discussions result in discussions about semantics. If it goes that way the discussion becomes irrelevant.

I know that if somebody can make in the long run consistent profits, he has an edge, or call it whatever you like. The evolution of his account proofs what he has: an edge, continuous luck, probabilities, special behaviour... but he surely will have $$$$$$$$$$$$$.
He does not care if he meets the criterion of "edge".
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So then... what is the purpose of this thread about "edge"?
 
KMeriwetherD said:
how do you define what your edge is? You can't back test discretionary trading.
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You can forward-test, though (initially on a demo account, if necessary/advisable), and then apply all the exact same mathematical/statistical parameters to your results as a back-tester would. I don't know whether it's helpful, and I'm not even certain it answers your question, but that's what I've always done, anyway.
 
Scataphagos said:
So then... what is the purpose of this thread about "edge"?
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The OP asked clearly "what is your edge?"

If you believe that edges don't exist you cannot answer his question. If he asks about "your edge" it means he believes in edges.
If he would ask: "do edges exist?", then your answer would be relevant.

So the purpose if this thread is to find somebody who is stupid enough to give away his edge.
 
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