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Having and edge over the market
- Thread starter gifropan
- Start date
use the search function. this has been discussed 412 times.Quote from gifropan:
In trading literature one often comes across the phrase "you need to have an edge over the market" Can someone elaborate on this statement. Does this mean that you have to have more winning trades than loosing trades? Or is the "edge" a deeper concept??
Bob
without an agreed upon solution btw ...
Quote from gifropan:
Or is the "edge" a deeper concept??
Bob
It doesn't mean anything. Just because you find a strategy that makes you $, doesn't mean its a edge...because chances are that there's 1,000,001 people that trade the same way as you.
In my opinion, an edge is nothing more than the right entry/exit...after all, timing is all that matters anyway.
cm
Quote from gifropan:
In trading literature one often comes across the phrase "you need to have an edge over the market" Can someone elaborate on this statement. Does this mean that you have to have more winning trades than loosing trades? Or is the "edge" a deeper concept??
Bob
A very simple explanation is like cashmoneys. Its simply a combination of things that results in a positive expectancy of making money.
It could be a pattern you recognize with an entry you've tested and either a target for the pattern or a trailing stop to exit with a profit or loss.
Quote from gifropan:
In trading literature one often comes across the phrase "you need to have an edge over the market" Can someone elaborate on this statement. Does this mean that you have to have more winning trades than loosing trades? Or is the "edge" a deeper concept??
Bob
This is another frequently asked question here at ET.
http://www.elitetrader.com/vb/search.php?s=
Good past threads on the topic:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=84402&perpage=1&pagenumber=6
http://www.elitetrader.com/vb/showthread.php?s=&threadid=52147
Therefore, it is a more deeper concept than win:loss ratios.
The most profitable trader I personally know (~700k/yearly) has only 48% winners.
He has many different edges and only one of them deals with his pattern signal.
Mark