hmm.no edges in the markets

[newwurldmn]

Quote from bighog:

That statement shows you do not know "shit-from-shinola" about Formula 1 racing. Where are the RED racers in the standings of drivers and construction? The myth is old and outdated at best.

Folks, understand this: a so called edge is nothing more than a figment of the imagination. In trading your skillset matters and indeed can be called an edge over the others which use osmosis. Edge resides in the mind and no where else. Ability must not be confused with being a myth, ability is there, edge is not.

My interest in formula1 severely diminished during scandal involving Ferrari's tires and then the death blow was the controvery around the diffusers. Formula1 isn't a sport, it's a circus. The drivers are talented as fuk and it would be amazing to watch them actually compete; but formula1 is more about the show than anything else.

If money wasn't an edge then why are there only like 2 or at best 3 drivers vying for the constructors title. No other motorsports league is so top heavy. And you see that it's not the driver - much if not most is the car.

I'm not discounting the driver's ability, but he needs more than just talent to succeed.

Trading is not the same. Talent can succeed by itself, but without a real edge, it's always tenous. This is why so many traders don't perform well in the long run.

 

[1a2b3cppp]

An "edge" is what allows you to be profitable.

The most commonly thought of "edge" is a profitable system. Contrary to the nonsense you hear all the time, this is also the least common edge.

People like to talk about how the "edge" is in your psychology, and there is some truth to this, but as stated above, all the psychology in the world won't turn a losing system into a winning system.

Most people do not have winning systems.

There are four possibilities:

1) A winning system without the psychology to properly trade it = losing trader

2) A winning system with the psychology to properly trade it = winning trader

3) A losing system without the psychology to properly trade it even if it were a winning system = losing trader

4) A losing system with the psychology to properly trade it even if it were a winning system = losing trader

1 and 2 are uncommon simply because most people do not have winning systems. 3 and 4 are more common.

The only psychological "edge" needed is the ability to follow your system. For example, if you are currently experiencing drawdown, or a losing streak, but your system hasn't told you to exit the trade yet, then you don't exit the trade. If you freak out and exit because you don't want to lose any more money, then you are not following your system and you do not have the right mindset to trade. Please note this requires having a profitable system.

Sometimes you get people who hold through drawdown because they are following the rules of their system, and these people have the right mindset to trade, but because they have a losing system they will not make money anyway.

Winning systems are extremely uncommon.

In my opinion, the reason most people lose is not because they cannot follow a system, but because they do not have a profitable system to follow in the first place.

Look at all the nonsense out there. All the indicators that don't work. All the "gurus" who won't give specific answers or objective instructions (because they are either unwilling to teach, or because they don't actually have profitable systems and are misrepresenting themselves). Look at how few people actually post real time calls consistently and profitably compared to how many people are "gurus."

It's no wonder traders don't make money.

Your psychological makeup (ie. the ability to follow your system's rules) is part of the edge if and only if you have a profitable system in the first place. If you do not have a profitable system then it doesn't even matter. It's still a useful and necessary skill, it just doesn't apply if you don't have a profitable system. It would be like being the best at playing a sport no one else plays.

 

[HurricaneUS]

Quote from 1a2b3cppp:

An "edge" is what allows you to be profitable.

The most commonly thought of "edge" is a profitable system. Contrary to the nonsense you hear all the time, this is also the least common edge.

People like to talk about how the "edge" is in your psychology, and there is some truth to this, but as stated above, all the psychology in the world won't turn a losing system into a winning system.

Most people do not have winning systems.

There are four possibilities:

1) A winning system without the psychology to properly trade it = losing trader

2) A winning system with the psychology to properly trade it = winning trader

3) A losing system without the psychology to properly trade it even if it were a winning system = losing trader

4) A losing system with the psychology to properly trade it even if it were a winning system = losing trader

1 and 2 are uncommon simply because most people do not have winning systems. 3 and 4 are more common.

The only psychological "edge" needed is the ability to follow your system. For example, if you are currently experiencing drawdown, or a losing streak, but your system hasn't told you to exit the trade yet, then you don't exit the trade. If you freak out and exit because you don't want to lose any more money, then you are not following your system and you do not have the right mindset to trade. Please note this requires having a profitable system.

Sometimes you get people who hold through drawdown because they are following the rules of their system, and these people have the right mindset to trade, but because they have a losing system they will not make money anyway.

Winning systems are extremely uncommon.

In my opinion, the reason most people lose is not because they cannot follow a system, but because they do not have a profitable system to follow in the first place.

Look at all the nonsense out there. All the indicators that don't work. All the "gurus" who won't give specific answers or objective instructions (because they are either unwilling to teach, or because they don't actually have profitable systems and are misrepresenting themselves). Look at how few people actually post real time calls consistently and profitably compared to how many people are "gurus."

It's no wonder traders don't make money.

Your psychological makeup (ie. the ability to follow your system's rules) is part of the edge if and only if you have a profitable system in the first place. If you do not have a profitable system then it doesn't even matter. It's still a useful and necessary skill, it just doesn't apply if you don't have a profitable system. It would be like being the best at playing a sport no one else plays.

Sir, I give thee the coveted +1,000,000

This single post should be a sticky

 

[1a2b3cppp]

Quote from wrbtrader:

P.S. I do strongly agree with you that all the psyche in the world can't make a losing system profitable.

Agreed!

 

[wrbtrader]

Quote from satchel:

Now the edge resides in the mind.
Now edge is psychological.
Clearly not a system traders?
This thread should be closed with edge resides in mind, a fitting end to thread title...

One of the edges resides in the mind for traders not using automation...traders that manually either enter, trade manage or exit trades without automation. Simply, there are other edges besides just the method and one such an edge involves the mind.

Thus, these types of retail traders must have a complete trading plan and not just a trade method. Trade method alone without the other critical pieces to the puzzle will not make someone consistently profitable. Its a common problem for traders because most put all their emphasis on their trade method and so little effort on anything else that would complete their trading plan. These types of traders don't last too long.

Sports Analogy, if you have the best quarterback in the league but your offensive line and defensive team sucks...you ain't gonna win too many football games and you're quarterback will eventually suffer injuries or worst.

Quote from newwurldmn:

My interest in formula1 severely diminished during scandal involving Ferrari's tires and then the death blow was the controvery around the diffusers. Formula1 isn't a sport, it's a circus. The drivers are talented as fuk and it would be amazing to watch them actually compete; but formula1 is more about the show than anything else.

If money wasn't an edge then why are there only like 2 or at best 3 drivers vying for the constructors title. No other motorsports league is so top heavy. And you see that it's not the driver - much if not most is the car.

I'm not discounting the driver's ability, but he needs more than just talent to succeed.

Trading is not the same. Talent can succeed by itself, but without a real edge, it's always tenous. This is why so many traders don't perform well in the long run.

Yeah, formula1 has changed a lot in the past few years as commanded by the big money sponsors wanting bring more entertainment into the sport and the tire fiasco became (still is) a big circus issue...gotta make those sponsors happy :eek:

 

[1a2b3cppp]

This explains edge:

 

[NoDoji]

Quote from 1a2b3cppp:

Sometimes you get people who hold through drawdown because they are following the rules of their system, and these people have the right mindset to trade, but because they have a losing system they will not make money anyway.

Winning systems are extremely uncommon.

In my opinion, the reason most people lose is not because they cannot follow a system, but because they do not have a profitable system to follow in the first place.

Why would somebody even trade a losing system? To me a "system" means something that's organized. Why trade an organized method of losing money?

Winning systems are not uncommon; I've spoken with many traders who have a plan that, if applied, results in net profitability. I've had traders send me their trade logs and have seen beautiful sensible entries that would've reached nice profit targets, totally ruined by micromanagement of the trades.

That said, I agree that most people do not even have a system.

But the ones who do have a winning system -- and I've seen quite a few -- rarely have the mindset to trade it.

 

[wrbtrader]

Quote from NoDoji:

Why would somebody even trade a losing system? To me a "system" means something that's organized. Why trade an organized method of losing money?...

The trader is not intentionally trading a losing system. The trader is trading a system that he/she "thought" was a profitable system but in reality was a losing system.

The reason for such could be any reason. For example, there was a journal here at ET where the guy had backtested his trade method that showed a positive expectancy. He then traded the method with real money and started consistently losing money. Someone reviewed the backtesting procedure and then pointed out his errors. Simply, he had been trading a losing system that he had in error thought it was a profitable system. In another journal the method had a positive expectancy on the Hang Seng futures. Someone else that's not too bright decided to apply the method to U.S. stocks and proceeded to lose a lot of money and then oddly couldn't figure out why the method didn't work on U.S. stocks.

A common reason, method really is about breakeven but the trader has exceptional trading skills...resulting in consistent profits. Another trader uses the same method and thinks he/she can achieve similar like results. Instead, that trader loses a lot of money primarily because of poor trading skills. Therefore, in this particular example, the trader is the key...not the method. The profitable trader underestimated his/her exceptional trading skills and the losing trader realized such too late by thinking the method could overcome or fix his/her poor trading skills.

I can go on and probably list dozen more reasons but I think you now understand.

 

[HurricaneUS]

Quote from NoDoji:

Why would somebody even trade a losing system?

that's a pretty naive comment dont'cha think...

Wrbtrader's post answers your question....

I concur with 123.....consistently winning systems that are robust are very rare....maybe 1-2 out of 100 attempts may yield a winning system (assuming that you are a very experienced and already profitable trader of course)...the chances are even more slim for total newbs

 

[austinp]

Quote from bighog:

Finally, gay marriage is allowed in certain states.

austinp, what state do you live in? I have had my eye on you....

I'm a legs man myself... what do you look like in shortie shorts? I need to see recent pictures before we go any further