How do you know you have an edge
- Thread starter traderzhangSan
- Start date
You have an edge when you can trade using Forex Bucketshop dealers and be profitable ☺
ElectricJesseLivermoreSavant
http://www.jesse-livermore.com/bucket-shops.html
At the peak of his career in 1929 Jesse Livermore was worth at least $100 million.
People sometimes ask how much that's worth in today's money. As a rule of thumb, a dollar in 1929 was worth 10 to 100 times what it's worth today - and Jesseâs fortune would have amounted to between 1.0 and 13.7 billion dollars in todayâs money - a remarkable feat for a self-made stock and commodities trader who traded with his own money, not other people's.
To assess Jesseâs fortune more scientifically, the measuringworth calculator gave the following results for today's value of $100 million in 1929:
$1.26 billion using the Consumer Price Index
$1.02 billion using the GDP deflator
$2.27 billion using the value of consumer bundle
$3.97 billion using the unskilled wage
$5.51 billion using the nominal GDP per capita
$13.7 billion using the relative share of GDP
In terms of the lifestyle Livermore's wealth bought, Patricia Livermore, Jesse Livermore's daughter-in-law gave a fascinating interview in 1990 for a documentary about the crash of 1929. Hereâs part of what she said about the Livermore lifestyle:
âThey had a beautiful place on 76th Street in Manhattan on the West Side, off Central Park. They had a floor at 813 Fifth Avenue because Dorothea did not like to go to the West Side to change her clothes. They had a house in Great Neck. They had a summer house in Lake Placid. They had a house in Palm Beach. They had a private railroad car, two yachts. The only yacht that was bigger was J. P. Morganâs. And they used one of them, the big one, very frequently when they went to Europe. They lived very comfortablyâ¦
Jesse Livermore had a ticker tape in every home that he owned, on his railway cars, on his yachts⦠They had several Rolls Royces, lots of chauffeurs. They had a staff of about 20 or 25 and in each place, in each house, see, and with the exception of Dorotheaâs personal maid, they did not take their staffs with them. They simply kept them year-round in all their establishmentsâ¦
Oh, they lived. They really lived⦠Mrs. Livermore was a spender. And, of course, she loved to buy. She spent her days buying and buying and buyingâ¦â
ElectricJesseLivermoreSavant
http://www.jesse-livermore.com/bucket-shops.html
At the peak of his career in 1929 Jesse Livermore was worth at least $100 million.
People sometimes ask how much that's worth in today's money. As a rule of thumb, a dollar in 1929 was worth 10 to 100 times what it's worth today - and Jesseâs fortune would have amounted to between 1.0 and 13.7 billion dollars in todayâs money - a remarkable feat for a self-made stock and commodities trader who traded with his own money, not other people's.
To assess Jesseâs fortune more scientifically, the measuringworth calculator gave the following results for today's value of $100 million in 1929:
$1.26 billion using the Consumer Price Index
$1.02 billion using the GDP deflator
$2.27 billion using the value of consumer bundle
$3.97 billion using the unskilled wage
$5.51 billion using the nominal GDP per capita
$13.7 billion using the relative share of GDP
In terms of the lifestyle Livermore's wealth bought, Patricia Livermore, Jesse Livermore's daughter-in-law gave a fascinating interview in 1990 for a documentary about the crash of 1929. Hereâs part of what she said about the Livermore lifestyle:
âThey had a beautiful place on 76th Street in Manhattan on the West Side, off Central Park. They had a floor at 813 Fifth Avenue because Dorothea did not like to go to the West Side to change her clothes. They had a house in Great Neck. They had a summer house in Lake Placid. They had a house in Palm Beach. They had a private railroad car, two yachts. The only yacht that was bigger was J. P. Morganâs. And they used one of them, the big one, very frequently when they went to Europe. They lived very comfortablyâ¦
Jesse Livermore had a ticker tape in every home that he owned, on his railway cars, on his yachts⦠They had several Rolls Royces, lots of chauffeurs. They had a staff of about 20 or 25 and in each place, in each house, see, and with the exception of Dorotheaâs personal maid, they did not take their staffs with them. They simply kept them year-round in all their establishmentsâ¦
Oh, they lived. They really lived⦠Mrs. Livermore was a spender. And, of course, she loved to buy. She spent her days buying and buying and buyingâ¦â
When you give it to me and I can trade it profitably ☺ 
I've read some people who suggest that it would have to be profitable over an entire bull-bear market cycle to really qualify.
Which makes sense when you think about all the traders who had huge gains during bull market run-ups or who shorted for similar gains in bear market declines, but couldn't hold on to them when the markets shifted.
Failing that, if you know when to walk away from the table because your edge has degraded and can keep the winnings from when it was working, you'll end up ahead of the game. Then, just wait until the market environment is conducive to your edge working again.
A true edge would probably have information which indicated when you should stay out of the market, too.
Which makes sense when you think about all the traders who had huge gains during bull market run-ups or who shorted for similar gains in bear market declines, but couldn't hold on to them when the markets shifted.
Failing that, if you know when to walk away from the table because your edge has degraded and can keep the winnings from when it was working, you'll end up ahead of the game. Then, just wait until the market environment is conducive to your edge working again.
A true edge would probably have information which indicated when you should stay out of the market, too.
i have a better question:
What is a clue that your strategy is really no edge at all but just vicissitudinary chance?
What is a clue that your strategy is really no edge at all but just vicissitudinary chance?
vi·cis·si·tu·di·nar·y (v-ss-tdn-r, -tyd-) also vi·cis·si·tu·di·nous (-tdn-s, -tyd-)
adj.
Characterized by, full of, or subject to vicissitudes
adj.
Characterized by, full of, or subject to vicissitudes
pure chance events like coin flipping can have long runs in one direction or another ...which might fool you into thinking you have an edge when you do not.
how quickly can you know that your trading is no better than a coin flip?
do you have more to add than a definition?
Testing for fair coin is well documented. For example
http://www.aiaccess.net/English/Glossaries/GlosMod/e_gm_test_1.htm
But how this applies to trading results? Perhaps there is no difference...