If edge is hard to get, why traders keep trading?

Quote from ElCubano:

answering the OP question; traders keep trading because an EDGE is not needed to make money in the market. A funded account is the only thing needed. I know this for a fact, from experience.

:D

a positive expectancy on a moving target does not gaurantee anything. If the edge doesn't last you will never have a big enough sample size.
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1. Perhaps you have an edge that youself don't realise.

2. What's your expected or average returns, when trading without an edge?

3. Do you have any mechanical rules (for long/short/ etc.) to follow for your trading?

4. Why a funded account is enough? And nothing else?

5. How do you know you can keep wining for any longer, if your own sample size so far has been still limited?
 
Quote from TraDaToR:

When trading, you have the right to be the casino, that's the difference. I am sure casino owner really see their job as a career, right?

What is the job you ended up doing when you pulled the trigger on this trading/casino thing? Serious question.
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Casinos have an edge; most ETers don't. That, my friend, is the real difference.
 
I agree. But they all still have the right to run one and put the odds in their favor.

With the number of errors/inattentions I do daily, I am sure I am really playing a positive expectancy game, even with fees and commishs.
 
Quote from OddTrader:

1. Perhaps you have an edge that youself don't realise.

2. What's your expected or average returns, when trading without an edge?

3. Do you have any mechanical rules (for long/short/ etc.) to follow for your trading?

4. Why a funded account is enough?

5. How do you know you can win for any longer, if your own sample size so far has been still limited?
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I answered your question as to why people keep going without an edge. The chance of making money.

I personally know of a handful of millionaires who didnt have an edge and made large sums of money daytrading. Gambling, luck, ignorant bliss...perhaps,but the market offered them the opportunity to make large sums of money. Without a funded account this would not have happened.

I can ask you the same..How do you know you have an edge, if your sample size so far has been limited? it might be luck...:D
 
dozu is right on point... It all comes down to statistical probability. For some reason, an "edge" is viewed by many traders as some mysterious and cryptic code. It's all about statistical probabilities coupled with money mgmt. When your edge (i.e. statistically high probability event) is going well, then increase the size of your trades, and visa versa. Whether it's Paul Tudor Jones, Richard Dennis or Paul Rotter, it's clear that they manage the size of their "bets" in accordance with their edge (statistical probability).

The issue of an edge is... how high, relative to its frequency, must my statistical probability be before entering a trade???

For example, my "edge" may be to wait for the s&P to trend 100 points without retracing more than 5 points in the 100 point run. When this happens, then I will enter an opposite position for 10 points with a 1:1 risk:reward. If my entry fails, then I'll wait for the next set-up. Hypothetically, this may have a high probability of success, if after studying the market for the last century, it was determined that it has an 80% positive expectancy. However, the problem is that it occurred only 5 times in the last 100 years.

Walt
 
Quote from OddTrader:

'You can't win without an edge, even with the world's greatest discipline and money management skills. ... If you don't have an edge, all that money management and discipline will do for you is guarantee that you will gradually bleed to death. Incidently, if you don't know what your edge is, you don't have one." --- (New Market Wizards, page 463)

"Good money management alone is not going to increaese your edge at all." --- (NMW, Page 175)
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Very true.

Part of the debate about "edge" stems from the fact that many people don't really understand what the term "edge" means. And that's OK, in a sense -- one can have an edge and trade profitably without knowing the true definition of "edge".

But the traders who get tripped up are those who think they have edge when really they don't. It's similar to the classic experiments in which people are shown random walks, on which they insist they know the next price. (They don't.)
 
Quote from ElCubano:

I answered your question as to why people keep going without an edge. The chance of making money.

I personally know of a handful of millionaires who didnt have an edge and made large sums of money daytrading. Gambling, luck, ignorant bliss...perhaps,but the market offered them the opportunity to make large sums of money. Without a funded account this would not have happened.

I can ask you the same..How do you know you have an edge, if your sample size so far has been limited? it might be luck...:D
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1. I think, most likely they have a kind of insight or feeling (i.e. edge) about market semtiment.

2. Trade with the flow (aka: market actions) - then sample size would be relatively a minor issue. Only a funded account is certainly not enough.
 
i am want to win lottery and go to the hawaii. i am not want to glue to the screen

media invent 'edge' to fool the peoples. it is moving targets, and the illusion.

edge is insider information and connection in the washington.

if this was about the statistic all mathematician would be the rich people. read a mathematician plays the market, most foolish book i read ever, how he spend all the money on the trading and no win

if you focused you make good money, and have edge
 
Quote from marketsurfer:

Interesting. I hear this all the time from traders. My contention is even though good money management isnt an edge, it will keep you in the game long enough to take advantage of LUCK. Those huge winning days that are guaranteed to happen if you are in the game long enough.

it isnt edge, but LUCK will arrive if you can stay in the game via money management.

just a thought, surf
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Interesting comments.

I've been playing the state lotto for 14 years and haven't won once! The odds against that are even more than winning yet it happened. So under your "school of thought" one should hang out till you win big. Now that is simply silly.

My father played professional baseball and then coached in the semi-pros and local leagues for years after and always had winning teams. His offensive philosophy was that all batters simply concentrated on "getting on base and advancing" and the rest would take care of itself. Defensively he taught his players to be simply focused and tight. Be as mistake free as possible. In all of his years of coaching he never had a loosing season and won division and state championships with his teams regularly.

The common factor here to trading is to concentrate on consistently pulling profits from the markets and the home runs will happen occasionally. They are the cake and should never be the main course. Stop trying to "put it out of the park" on each swing. When you "try too hard, you WILL fail".

Luck should never be a staple to your trading.
 
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