My dear brothers...OBTAINING AN EDGE

I keep a whole boatload of different data/stats regarding my setups. I am then able to go over a series of trades and plug in or omit various parameters to see how I might adjust my system as or if required.

The same idea can be used to take a raw, unpolished idea for a system, be it only marginally profitable or not at all, and adjust until you find something that is workable.

IMHO, understanding how to develop various methods of trade management is likely to have a more significant impact on a trader’s long-term success, rather than equal time spent developing methods of entry.
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Yes. Yeeesss. Well said, specially the last sentence.

If I saw a newbie taking _RANDOM_ entries, but had some plan of when to stay in a trade, when to take profits, when to "stop" out, and execute those things _COLD_MACHINE_LIKE_ IMHO, you would have a winning trader in the making. Then all he needs is the edge, but all the "mechanics" would be in place. [Slight oversimplification.]

nitro
 
OK heres a screenshot of what I did today. Its only 1min chart as that is where my software puts the arrows entry/exit.
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Good!

Now move this onto its own thread - do it everyday. See what happens. Don't give up.

nitro
 
AllenZ - Excellent Post

Originally posted by AllenZ
All this to say, my EDGE is my knowledge of the markets and of myself, my discipline and patience along with tireless development of my trading methodology. Trading systems change with each market, trading methodology is something you can develop and tweak and keep in a general form for your entire career.

AllenZ
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In my opinion, the Edge is:
- HARD WORK
- CONTINUING EDUCATION
- TRADING a system that fits your personality profile
(e.g. I could never be a scalper, don't have the reflexes).

There is no "holy grail" or magical system that will make you
rich...

- Greg
 
Originally posted by neo_hr
I for example have used ENSIGNs SimBroker feature (basically it simulates e mini movement in realtime and you can place orders and stuff...), tried a few simple concepts only to get my head handed to me...
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Placing simulated trades to get a feel for what you might actually do in RT trading is a good idea. If you are getting your head handed to you in simulated trading, what business do you have trading in RT? Shouldn't your simulated results be telling you that there is something wrong?


RESULT? -10k $ more or less... Mind you, I started with 1 contract but hrm... got a little frustrated so I shorted like 10 contracts at one time and yeah, blew it!
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You overtraded your account out of frustration. Increasing size when you aren't a fundamentally profitable trader is pure financial suicide. It looks like from the overtrading, and the trading when you weren't profitable first in simulation that you have a discipline problem. Get ahold of yourself man before you piss it all away! The key to discipline is doing the same thing day after day. Only after you start achieving consistent profits in simulated trading should to attempt to do live trading. Only after having consistent profits trading a certain size, should you even think about moving up to larger size.

If you have a method, and you "think" that the market should go down here but you know that your method shows no entry signal, and you can watch the market tank and not get upset for missing the trade, then you may have achieved discipline.
 
I think I understand neo_hr's (no relation! lol !)frustration. I can believe he read a lot and do try hard. Indeed, I also remember you trying several things. but it's OK, most succesful traders have to try several things before finding their biz.
Still getting an edge is tough. I agree it is mostly experience (after looking at charts or T&S for months you either start to get it or you never will).
And an edge with emini is even more difficult imo.

Back to how to get it..
It is so important to have a systematic approach. If you have one (I know you are trying) take note of ALL the trades and what happened. Write down entry/exit, if you followed the plan or not, why not (lol!), how you felt and why.

Your edge is hidden in all this information. There are reasons why you lost money. And it is written there.
After analyzing all this, you gain experience. there is a pattern of why you are failing.
When you recognize this pattern and analyze the psychological or technical reasons for it, you can start to ELIMINATE the wrong behaviour.

In fact, maybe the edge is more about eliminating what does not work, than asking what does work.

let me go deep : having an edge is about knowing there is no edge.
my group of traders refer to the Matrix movie very often (thus the name neo). 'there is no spoon'.
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.
To do that, we trade not what we think but what is. It is not about fighting the Matrix, it is about being the Matrix.

I may loose too many of you here. So I should stop. But not before I try to help on another front...
I learned the most when I traded low volume no hype NYSE stocks. why ?
because the specialist is either a junior or too busy elsewhere. and because things go so S L O W... you will see all what trading is about in this context. and with the slow motion you have time to think about everything you do and see.
A lesson of that too : trade one stock or a very few stocks or instruments but always the same. I don't think you can learn by jumping from stocks to stocks all the time. when you have the edge, OK. but before that it is very dangerous.

In the beginning I traded with Tony Oz's kind of scans. it worked great and gave me the wrong impression I understood trading. I still don't think it is the right way to go at understanding trading. Anyway, this is not an issue anymore, trading is much more difficult since the market collapsed. You have to understand trading to make money now. Nothing against Tony. on the contrary he does teach you a lot I think, or at least makes you realize trading is not about fundamentals and news. I mention it, because that's how I started that's all.

tntneo
 
"In fact, maybe the edge is more about eliminating what does not work, than asking what does work. "

Wish I had said that. What a great quote.
 
Hi folks,


Been trading for over 5 years now with decent success. Started out as a scalper during the bullrun and became more of a intraday swingtrader to adjust to the current market. Read tons of books and sampled a vast amount of chatrooms and seminars. I always thought must be an edge out there somewhere, where I can learn and excel as a trader.

Well, after trading with a friend of mine who runs a hedge fund, my belief in the system of charting and T/A have gone down the tubes. It was a major disappoinment for me because I always thought the big boys just had more skills or experience.

These guys are morons!!!

Here is the biggest secret or the "edge" they have over most of us...

They get calls from the borkers!!! Not your typical retail brokers.. I'm talking about accounts with min of 500k and up.

It's really hard to explain but to watch these folks make money without charting or level II just facinates me. It's a matter of a phone call or an IM and you're in like flint.

Seen some crazy money being made vegas style.. and most of the calls are 80% accurate. (order flows, upgrades, downgrades, etc,etc)

Now you may be asking, why isn't this jerk trading with them instead in whining about it...

well, let's start by saying I will need about 500k+ to open an account with GSCO or MSCO.


my 2 cents,


Murphy :eek:
 
murphy, sure. but it is like saying big money is smart. of course it is not smart, but it is big so it moves things.

the edge you mention with the 'morons' lol, is the same kind of edge you can get when you understand what a specialist is doing. I mean, I may see your moron start buying that way.
is that an edge ? well, I would not know. an edge to me is when you start to understand what works for you. and yes, as I pointed out earlier, knowing that there is no 'secret edge' of the market.

tntneo
 
I totally agree with your comments.

To me, an "edge" is

1) order flow, I don't care if your chart says the stocks is overbought or oversold, if someone is buy or selling a ton and you know, that's an EDGE

2) Knowing a stock will be upgrade the next day by your broker, ever seen those late day runs with no news and the next day, you see it gap up a point from some stupid upgrade?? Then you tell yourself, time and time again.. hum.. someone must of known something

3) If your broker tells you at 2:00pm, I got a large buyer on SEBL.. and you just front run them and smack it for a few thousands shares for a 20-40 cent scalp, to me, that's an edge


My interpertation of an edge is something that gives you an advantage..

To me, information is an advantage, a big one.

So, to me, it's a big Edge.

Hey, just my take, not saying I'm right. Ignore me... just telling it from the insitiutional side.

But I do not disagree with any posting made above... I love this board.. except for the self promotiing snake oil chatrooms..

LMAO


First it's cook... Velaz.. you're next...


:D
 
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