You have limited market exposure. There is a class of trading systems where discipline is the edge. Countless examples of trend following systems, some 4 lines of code, with positive expectancy that fail solely because of lack of discipline. Your naive expectancy formula does not suffice to model the edge of these systems. It takes highly non-linear math to incorporate the discipline edge and get the final expectancy. Needless to say expectancy is a buzzword for naive newcomers to trading. Positive expectancy is logically and mathematically equivalenent to net profit. It means nothing to professionals. You do not start in this business if you don't have an edge. Otherwise you are crazy. So any reference to the need of an edge is irrational. So is any reference to a roulette. It is called a false analogy.
Did Your 'Edge' Come Easy?
- Thread starter Chris_Anonymous
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You have limited market exposure. There is a class of trading systems where discipline is the edge. Countless examples of trend following systems, some 4 lines of code, with positive expectancy that fail solely because of lack of discipline. Your naive expectancy formula does not suffice to model the edge of these systems. It takes highly non-linear math to incorporate the discipline edge and get the final expectancy. Needless to say expectancy is a buzzword for naive newcomers to trading. Positive expectancy is logically and mathematically equivalenent to net profit. It means nothing to professionals. You do not start in this business if you don't have an edge. Otherwise you are crazy. So any reference to the need of an edge is irrational. So is any reference to a roulette. It is called a false analogy.
There's only one little problem. This ain't the roulette wheel; it's trading.
Try taking out your "edges" known as discipline and money management, in trading, and see where you get.
These are just two "edges".
Understanding entry is an edge.
Understanding targets is an edge.
Understanding stops is an edge.
Experience is an edge.
A mentor is an edge.
Excess capital is an edge.
Now: Combine these all together.
We can agree, however, that one must have edge, discipline, and money management to survive.
It's just that, from my point of view, all these items are "edge".
"Edge" is developed in trading.
When I started, I had no discipline or money management.
Then I later developed those "edges".
"Edge" is defined in many ways, IMO.
She didn't come easy, but she came often, and that kept me going.
Off your antipsychotic meds again, I see.
Or perhaps it's just a serious lack of brain food (like for most of your life).Expectation is not a buzzword, you can find it in most probability textbooks. If you knew half as much math as you pretend to, you'd know that.
But carry on, clueless troll, I do find your ravings mostly amusing.
My problem is the sloppy use of language. Years ago, nobody argued about the meaning of edge; this was a settled issue. We now have a whole slew of people, including traders, who presume they no longer have to adhere to language standards and can say whatever the hell they want and somehow others are magically just supposed to understand it and accept it. Something to do with lowering school standards and placing emphasis on "self-esteem" over grades, I'm assuming.
Words matter. This isn't Alice in Wonderland and you aren't the caterpillar getting to redefine accepted words to mean whatever the fuck you want them to mean. To intelligent traders, there's a difference between edge, discipline and money management. If you insist these differences don't exist, you're just telling us far more about yourself than you're telling us about the jargon.
Quote from kut2k2:
Off your antipsychotic meds again, I see.
Expectation is not a buzzword, you can find it in most probability textbooks. If you knew half as much math as you pretend to, you'd know that.
But carry on, clueless troll, I do find your ravings mostly amusing.
Look at you idiot. I just said you have limited experience with trading, which is obvious. You come back with these insults. learn the difference imbecile between an insult and an opinion about someones skills.
Expectation is indeed a buzzword you freak because the way it is sold to traders it assumes stationarity you bozo. There is no stationarity in the markets. Get a life.
That set excludes you bozo. Discipline is one of the most precious edges. You know nothing about trading to ignore that.
I will dissent with Scat, on this one. Garden variety edges exist. Most are based on stop-running, or trend-following. Some are mathematical, or statistical, but involve simple arithmetic, ime. The most reliable edges I found were sentiment or psychology-based: arbitrary measures participants use to determine end of a trend...It's all in the charts. Some edges can be found in books. Some edges can be found in failed popular patterns. Coding helps to factory-test candlestick patterns, or bar patterns. If I could do it all over again, I would have learned to code at the beginning. Discovering edges did not come easy, but they are all easy or simple. For me, the trick was to watch the charts and test *ANY* idea I had. My research progress went exponential after I did that, and it was only a couple years (haha) until I struck gold. The best patterns aren't in books, lets put it that way. So free-style on any shit you think might work, test it, put it down on paper. If it fails, on to the next one. Repeat
The last 2 paragraphs are a direct quote from Paul Tudor Jones in his Market Wizards interview...