My dear brothers...OBTAINING AN EDGE

it means trading is not about the surface of things. it is about the underlying forces. Successful traders I know, don't trade the surface or indicators (because they lag). They trade the real way the market works (for instance playing on the same side than the specialist) or use wave and trend theory (you can't cheat trend theory) or short term imbalances.
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THIS IS AWESOME! Matrix is one of my favourite movies!!! Thats why I got my nick...

First of all Id like to thank you Neo, for such an insightful and time/effort consuming reply. I understand what you are saying but ... theres always a but, eh?!

How do I get to know about market? Market dynamics? The way markets work? OK, theres TA but the way I belive it to be TA is PROBABILITY! Thats all there is to it right? I mean as I said on an earlier thread, it may be a pullback OR it can be a reversal... noone REALLY knows.

At some point in time I have actually had the same thoughts like brother Murphy - MMs (or big guys) know what the order flow is from smaller crowd so they can go along. OR they know what the big accounts are doing... Now, I dont know a lot about the regulkations etc but I belive there is a way for them to take advantage f the info they have. I mean If I worked at an office like that and knew theres like a 500k shares order in some semi liquid stock, U bet Id call my grandma on her cell and tell her, better make that yell, 10 for quarter, 10 for quarter or something like that :) :) :)

OK, Im asking you traders with years of experience, IS THIS TRUE? That big money is to be made simply by having the right information/connections call it whatever name you will? Why bother with TA if this were true?

Also, Tnt, if its not too much to ask, what issues did you have in mind? Like up to 500k shares/listed/under 40$ ?And another thing...you really got me thinking about this "spoon" thing. After seeing the movie again, I cant stop thinking about it but I still dont get it. What is meant by how the markets function? Please PM me if its not for the public.

Thank you all once more and I hope we keep this going, one of the best threads lately!

Alex

P.S. I just reread your post Tnt, and... any websites where I could learn about the way markets work? Like participants, that type of stuff? Also, are you saying that real trading should be tape reading some semi liquid? Volume/price/news?
 
Edge: Finding out how the game is played, who the players are, staying on the same side as the winners.

Pretty basic tape reading, following the Specialist, using all the tools available to you ...and not following the masses who are not making money..

Another 1.5 cents..
 
my first short post to murphy. I may reply to alex later.

I totally agree with you murphy. that's an edge too when you know something others don't know yet. for others, no, the institutions don't always know, because noone does. but they may have better information and deeper pockets. that's for sure. But remember that many big institutions lost a lot too in the market debacle. so it is not foolproof. nothing is. because there is ALWAYS what you DON'T KNOW! and that will kill you eventually.

Also, 2 traders in opposite directions (one selling, one buying) may both be right ! never forget that. we all have different time frames and goals and 'edge' :)
(edge in the sense you know how to make money over the long run, whatever way you use to do it. that's my definition).

tntneo

ps : murphy what did you mean by cook, velaz, you're next ?
 
Originally posted by AllenZ
Give me just a little break.

I do not post, hype, or describe in the slightest my chatroom. I use this board to offer some help and guidance to those interested in learning to trade and this is the reason I did not post where I was from. Yes I am Allen Zuckerman. (big deal) I am a trader like anyone else. Indeed my trading in the latter 1/2 of 2001 left something to be desired as the market changed and I was attempting to make a change to trading a different instrument as the market itself changed, and in my opinion, offered better opportunities in places other than where my trading was concentrated at that time. Throughout rough periods and easy periods alike I always posted my results, good, bad, or mediocre what ever they were at the time I was trading.

By the way Trader88 this is a quote from my previous post.

"I run a small chatroom ( not hyping and wont mention....don't ask ) because I did develop my edge from being in many different chatrooms myself."

My returns over the past 5 years averaged what I said they did and yes 2001 was sub par for me thus the term "average", as my results exceeded that in years prior as they should in those types of markets. Any trader that has ever made a penny in the market knows some years are good and you take advantage of that and some years are tougher and in those you maintain capital so you are around for the more predictable and more lucrative markets. In my reply on this post all I was doing was trying to help without touting my own services to do so. Those that ask questions I always answer honestly and in a straightforward manner without trying to "sell" anything. To Trader88 I am not sure what your post was meant for. Please let me know.

Allen Zuckerman
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I have been a position trader for 7 1/2 years on a part time basis. During this time my average return has been 48% (my worst return was 13% in 2000), but this has occured with a fair amount of volatility. Since I began trading I have maintained my professional practice on a part time basis and have found this to be a significant edge for me. I can have loosing days, weeks and months (the dry spells as Allen put it) with out the same level of concern as most. I would go so far as to say that if I did not keep my practice open, I would no longer be trading. To AllenZ: To what degree do you think your "small chatroom" provides you with this type of edge? Without it, would you have gotten through the hard times (for example last year) with out the chatrooom subscriptions?

Regards
 
Good question, as I was speaking to another chatroom op recently about this same thing. I have been running a chatroom since Dec 2000 and a couple of thoughts come to mind. First, my trading has suffered slightly since I have started running a chatroom, this could be attributed to the more difficult market since late 2000, and the chatroom income has not made up for the difference. I do however prefer to have a slightly lower, but more consistent income and I enjoy very much running the room regardless of the income. ( which is small, compared to trading )

I believe it is a bit easier to trade when you have an alternate income other than just trading. I think no matter how much I was making from trading I would look for other income to supplement as I know the market can turn fickle at anytime and my general persona is one that is always looking for more money from whatever source is available.

I dont believe my edge comes from having the second income as I traded a bit better prior to running a room, but I believe that for a newer trader it is far better to have a second income so you do not attempt to force trades on a daily basis. ( a savings that you draw from for 6-9 months may qualify as a second income )

Many may not enjoy the daily rigors of running a chatroom, but I find it very fulfilling and would not give it up unless it severely effected my trading, which it has not.

My edge has come only from the ability to know my own trading abilities, understand how to apply them to the current market, and always be realistic. Many traders enter this game with unrealistic goals and in turn force themselves to take unnecessary risks. Not being aware of realistic trading goals is a NON-EDGE or something that will absolutely help you fail.

Hope I answered the question.

AllenZ
 
Your edge is that ONE THING that makes you better than the average trader -- and that's FOR YOU TO FIGURE OUT. Go to the seminars, read the books, but I believe in order to have an edge you have to have a system and style that is all your own. Sure, you may have borrowed some ideas from others, but it's how you put it all together and actually trade the system which is your edge. Only through an extended period of self-discovery, analysis, and testing can you achieve this edge. No one can give you this edge. You have to find it for yourself.
 
from my view there has been a lot of good advice on this board. And if you are attempting to be a self made trader, trading can be a very arduous self introspective process. However, lets say you played and individual sport and all ready went through a lot of self examination, will that help you make money, no, not until you know how to make money. My advice is simple to all those looking for an edge. Put in some time studying. Put on a few very small trades yourself and see what happens.

Then choose to spend a long time reinventing the wheel or go to some traders who make a living trading. You may find out they are doing nothing that you do not know --just doing it more confidently and more often. Or perhaps they have more discipline or who knows? I suggest this means clerking on a trading floor in Chicago, where you could scout out traders who have a style you think you could follow. Or get a job trading for a firm, or go to a trading office and ask the traders to show you how they make money. Perhaps they do perhaps they do not. If they do and it is a style you can follow great. If you really want to make a living doing this you will find a way. Perhaps you will have to move. Perhaps you can find a trader nearby.

By the way I have taken my own advice about this now twice. I can choose to lose or I can choose to make money. The more I learn the more I belive Ed Seykota was right. "You get what you want out the markets".
 
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