How long did it take you to find your edge?
- Thread starter MaritimeCanuck
- Start date
It's just foundational knowledge to know where you operate within the whole. If "edge" is defined as the factor that allows a person to take better actions than the counterparties on the other side, then it is quite reasonable for people to want to know whether or not the place they operate from provides an edge and, if it does, where it may lie vis-a-vis other classes of participants.
In relation to the large capital pools, the private trader operates in a parasitic role. I used a reference to the go-go tech days when scalping on Level II involved watching the larger players and knowing whether they were a buyer or a seller. Of course they were always on both sides and they could also hide behind INCA, but on many days their operations were obvious, and when the largest players were on the same side you took a trade in anticipation of being pushed by them. In other words, you took some of the liquidity they were going to need. That was the edge.
Now, if you're some kind of yo-yo, you see the words "scalp" and "Level II" and automatically assume that I'm saying that the edge is to go for eighths and sixteenths. Anyone who thinks that going for eighths and sixteenths was an edge that ever worked was a SOES bandit. Not everyone who traded on Level II was lucky enough to be trading at that time and I don't think that era lasted that long. The focus when I traded was on staying in the trade and pulling out sticks and not jumping off just because it's a tick in my favor. The important point is, the goal was front running the larger players. For trading index futures, it takes a bit more sophistication to do this but I see my place within the whole as pretty much the same.
Regarding your list, I think it covers all the bases. I can't cheat even if I wanted to and being too smart doesn't pay. I would just change the last item to, "Be ahead of others." Being first feels good, but trying to nail that extreme tick on a turn can get costly.
By "externals" I mean all the things outside the trader that are required to exploit the edge - a quiet place, furniture, equipment, software, trading account, etc. These are necessary but easy to gather.
Thanks for asking.
First time poster at ET
What I would like to know, is how long it took other traders (especially the pros) to find their edge in trading.
Also, I'd like to know what resources you have learned the most from whether it be certain books, courses, or other ET posters, etc.
I don't know that I'd call it an edge because I don't get a discount. But the wins outweigh the losses at the end of most days. The fewer mistakes you make, the better off you are potentially. I'd like to say it took me only a year or two. But it didn't. It took me more like 4 years of intense, almost addictive market studying. Ok, I admit, I still once in a while sleep watching the ticker. But no where like I used to haha. For me it was more like 2 years of what seemed like constant losing. I almost swore the broker was out to get me lol. Then I pretty much went scratch for about a year. The next gear, for me, was building confidence to trade. This came through vigorous testing of about 10 yrs of data and different instruments. In the beginning I used to manually test after trading hours. Wow that was gruesome come to think of it. But, it did help me to build patience in waiting for trades. After all the testing, I decided I needed to automate because I was missing London trading. In my opinion that trading is a lot easier than the trading wildness from the big firms of wall street. I still profitably trade some discretionary. It seems I don't perform as well in the long-run as the system though. For example, I still cut wins short. Something about me doesn't like a loss. The system also takes smaller losses that I do. So, I keep my discretionary positions small and more medium to long term. But, the system still doesn't know what it means that Bernanke/Yellen is going to release FOMC
. So, all and all, it's exciting. I find it the most stimulating "game" in the world. As for resources: read everything and anything. What's most important is that you learn to decipher the value from all the garbage. And as for ET posters, there are many good ones. Perhaps the most important thing is to try to find the nuggets that each has to offer. They drop out once in a while here and there.
Have lots of fun. And, don't neglect your health, which without you will not be able to trade another day.
Best to you!
Very motivational! I'm right in that grind with what seems like constant losing, I actually made money when I knew NOTHING (just like every other beginner in 2013 I know lol).
I love hearing about other people's struggles in trading before they made it, it's reassuring to know I'm going in the right path, that I'm not wandering around like a chicken with my head cutoff but that it's normal to be wrong constantly in the beginning. I'll be alright as long as keep my head down and keep working.
Thank you nth!
i got my edge three decades ago when i was born
-> a natural tendency to do the opposite of what most people are doing.
of course this does not exclude me from doing most of the mistakes noobies (like me) do. so, i'm still learning.
Ok, now the stuff you probably don't want to hear
. The I guess I feel obliged to tell you type of stuff. There's no guarantee that if you work your butt off that you will ever have a positive year. Know when to walk away if needed (even if just for a week). Losing can be hard on the psych. So, if you need to walk away for a little while, do it. It's ok to have a back up plan (call it a catastrophic stop loss or whatever). For me it was computer science. There have been times when I thought I'd be sitting at a desk working for someone (the thought disturbs me deeply). Lately I've been thinking a lot more about moving more cash over to other stuff (rentals and maybe a side real estate business). Just never know for sure how long trading will go well. Sucks to say, but truly never know. The cold hard fact is nothing is guaranteed. And, of course you know that. But sadly we don't like to face that reality. Maybe we should at least know how to monetize it, if it did happen to roll out that way.Always have to look after the bills first unfortunately!
Sorry, I'm sure I'm misinterpreting #3, but if price falls through support making that level the new resistance, did price really turn? Same question for price climbing above resistance so that it becomes support.