Easy edges in the markets for retail participants?

[onelot]

...or taking cross-asset exposure that would be hard for me to take.

what cross-asset exposure would be hard for you to take, but easy for retail?

 

[dbphoenix]

I'm curious as to what actually constitutes an "edge". I have a favorite technical indicator that seemingly works across many time frames, and it is derived from very fundamental math principles. (I came up with the idea in an "aha" moment, tried it out in crude form using stockcharts.com, and gained enough confidence to start researching it. Turns out another guy had the same idea and refined it far beyond anywhere I would have gotten in a reasonable amount of time. I want to make money, not optimize indicators.)

So, let's assume this thing works. Let's assume (for me) it lets me swing trade over periods of a few days to a few weeks with a decent win rate (> 70%) and higher reward than risk. Isn't that an "edge"?

The best one I've found comes from Mark Douglas: "Your edge begins with the knowledge you gain through your research and testing that a particular . . . market behavior offers a level of predictability . . . that provides a consistently profitable outcome over time."

Or marry Lloyd Blankfein's daughter.

 

[jimmyjazz]

Gonna have to run that one by my wife.

 

[Tonkadad]

Gonna have to run that one by my wife.

Your wife knows Mark Douglas?

 

[ras72]

Trading presents apparent ease, deceptively low barriers to entry and the enticement of large rewards while being in reality so demanding to play properly, exhaustively studying, consistently uncovering, tracking and exploiting opportunities as to be beyond the reach of the individual.

The possibility of each making more money exploiting knowledge directly in the market, rather than by sharing it, ensures that the material (tools, methods, knowledge...) that gets in the public domain is generally of very low value. The exceptions being so rare and far apart as to make their search inefficient and their exploitation again the domain of the better organized and financed players who can more readily solicit, uncover, acquire, evaluate, profit from such exogenous opportunities.

In this context, for a new entrant to survive and prosper, requires timely development of sufficient skills and exploitation of a left-over positive expectancy game based on a transitory correlation, possibly assisted by a betting strategy providing a lucky distribution of outcomes.

-ras72

 

[game]

A Razor's Edge

A recent Harvard Business School graduate returns to his hometown. Here he finds that Bubba, his not-too-bright friend from high school, is an entrepreneur who now owns a mansion, a jet airplane and a yacht.“Bubba,” he asks, “how in the world did you make so much money?” “It’s easy,” Bubba replies. “I make these widgets for one cent each, sell them for four cents each, and I sell about a million of them a day. You know, it’s amazing how much money you can make on a three percent markup.”

 

[jimmyjazz]

Your wife knows Mark Douglas?

I sure hope not.

 

[NoDoji]

The possibility of each making more money exploiting knowledge directly in the market, rather than by sharing it, ensures that the material (tools, methods, knowledge...) that gets in the public domain is generally of very low value. The exceptions being so rare and far apart as to make their search inefficient and their exploitation again the domain of the better organized and financed players who can more readily solicit, uncover, acquire, evaluate, profit from such exogenous opportunities.

-ras72

http://www.chartpatterns.com/symmetricaltrianglechartsstocks.htm

This common setup found all over the net offered four profitable trading opportunities today during the crude oil pit session. I've been profiting from this setup regularly for several years now.

 

[DR.BOUYE]

Trading presents apparent ease, deceptively low barriers to entry and the enticement of large rewards while being in reality so demanding to play properly, exhaustively studying, consistently uncovering, tracking and exploiting opportunities as to be beyond the reach of the individual.

The possibility of each making more money exploiting knowledge directly in the market, rather than by sharing it, ensures that the material (tools, methods, knowledge...) that gets in the public domain is generally of very low value. The exceptions being so rare and far apart as to make their search inefficient and their exploitation again the domain of the better organized and financed players who can more readily solicit, uncover, acquire, evaluate, profit from such exogenous opportunities.

In this context, for a new entrant to survive and prosper, requires timely development of sufficient skills and exploitation of a left-over positive expectancy game based on a transitory correlation, possibly assisted by a betting strategy providing a lucky distribution of outcomes.

-ras72

In my experience, consistently profitable directional traders are a very rare and unique breed of person. Blessed with the uncanny ability to extrapolate price correctly, they truly are the elite of the trading arena.


Regards.

 

[dbphoenix]

In my experience, consistently profitable directional traders are a very rare and unique breed of person. Blessed with the uncanny ability to extrapolate price correctly, they truly are the elite of the trading arena.

Rare, maybe. Unique, hardly. Uncanny ability, depends on how one views the market. If one views trading as analogous to herding cats, then extrapolating price correctly would appear to be an uncanny ability. But if one views it as more like driving horses, extrapolating price is much more ordered, given the occasional bolt. One can even extrapolate price correctly if one views trading as more like herding sheep, if one has control of the dog.