KGTrader4 Real Money
- Thread starter KGTrader4
- Start date
trading small is my intent. That’s why I put a relatively small amount of money in a separate account.
With that said, I’m not even sure I know how to define my edge. I have never hesitated to take a loss to keep losses small, is that an edge? I don’t know. A lot of people aren’t disciplined enough to do that. My rules say sell half of a winner when up,10% move up the stop and let the rest run. Combine that with keeping losses small, maybe that’s an edge. Beyond that I don’t know what an edge is.
If an edge is to know what a stock is gonna do before it does it, then nobody has an edge.
sometimes we humans tend to make things more complicated than they need to be.
but for sure I’d love to hear from others what their “edge” is, I’d learn from it. But I don’t think traders like to share that particular information,
I gotta disagree with you on that. I'm of the mind that having an edge comes from years of studying/watching the way stocks move and react in certain situations. Basically developing a sixth sense as to when to go long and when to go short.(although sixth sense is not the best words to describe it ). Otherwise you're just gambling,might as well do a 50/50 coin flip whether to go long or short. And just because you honor stops and keep losses small....that wont save you.
Discipline itself is not an edge but a prerequisite, because discipline alone won’t give you any advantage over other disciplined traders/market participants.
Edge by definition is something unique to you that can provide a high probability of certain trading outcomes in aggregate. One example is pattern recognition mentioned in a number of trading books. If you don’t know what your edge is or whether you have an edge then you don’t have one. You’ll clearly feel it when you have one.
Although I have several accounts (Tax Free, Retirement Income, Taxable, US Dollar and Canadian Dollar) I consider them one account.Not sure I understand your question about having a certain % of equity.
But it’s never been my style to go all cash in my investment accounts. In fact this is the first time I’ve ever been as low as I’ve been. I think you need to be open to all outcomes. Being 25% equity when one’s fully invested strategy it’s 65-70%, means I think we are in a bear market that will last a while. But I can’t be certain.
I think if one goes to 100% cash, with their investment (not trading) money, they are saying, “I know for a fact that we are in a bear market and I have zero doubt that the market will not turn soon.
Only fools operate on the premise that they know for sure what happens next.
I don't differentiate between trading and investing or short and long term. The objective of the whole account is to increase my net worth.
To me an investment is money spent on a business or a rental property that will produce an income. I know it's semantics but I speculate in stocks rather than invest in them.
As far as being 100% in cash, it's not that I know for sure what will happen next, it's what is the worst case scenario. If I'm in cash I'm guaranteed not to lose any money. 2008, 2020 I was 100% cash, right now I'm getting close. I have no idea where the market is going, but until I see an uptrend, I'll stay in cash. (There are stocks that are trending)
Trading or investing; what is your objective? I'm guessing to buy then sell at a higher price. When you close the position, it's a trade.
I don’t think you’re betting on a 50/50 coin toss. I think your getting on probabilities, and when the probabilities are in your favor, you place yours bets accordingly. I’m not saying it’s just about managing risk and position size, it’s also about being able to recognize when the probabilities favor a trade, I get that.
This is probably one of the better explanations I’ve seen.
Since I showed up here I’ve always said I’m still learning, and I still am
I don’t think I’m good enough to manage money that way. But more power to ya if you can.
"Probabilities favor a trade" and correctly predicting which way a stock's price is about to move are just two ways of saying the same thing. And if you dont have experience you'll pick the right direction no more than 50/50 of the time. Thus no edge.
