Prudent Risk Management Is The Only True Edge In TRADING

Is Prudent Risk Management the only true edge in trading?

  • Yes

    Votes: 53 29.9%

  • No

    Votes: 124 70.1%
  • Total voters
    177
CyJackX said:
Like I said, this all feels like semantics. What is the accepted definition of risk management?

I can call a calculated investment in materials and workers risk management. I am staking an investment with a timeframe and a profit target.

Walking down the street to the deli for a sandwich is risk management. I'm investing my time and energy for a payoff. If the deli is closed, my sandwich is out, the risk.
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The only way I would call money management an edge in my trading is if I had some creative or unique way to adjust my exits/stops in real time that increases the probability that I maximize profits and minimizes losses...but I would never say "money management is ABSOLUTELY the only true edge". Why? Because my personal skill created this edge only for me. No one else has this edge (in theory). How could I proclaim this is the only edge for everyone else too when I'm the only inventor of this creation? He did say you have to be an "expert". It doesn't make sense. He's being too vague.
 
Buy1Sell2 said:
Correct. Most traders will not become experts at PRM. It's just not sexy. It is however the mother's milk of trading. --and most will never drink.
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I JUST FIGURED OUT THE ABSOLUTE EDGE TO ALL TRADING.....BE AN EXPERT AT IT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!:rolleyes: P.S. EXPERTISE AT ANY ASPECT OF TRADING WOULD BE CONSIDERED AN EDGE...BUT ONLY AVAILABLE TO THE FEW!!!!!!!!!!!
 
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Buy1Sell2 said:
That's how you pick entries and exits. There is no edge in that. Everyone is able to do so.
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ROFLMAO ....well anybody can pick an entry and an exit but that doesn't mean it is a good entry or good exit. How about showing live how you pick entries and exits ..BETTER YET do it shall we say randomly...since the only edge per your theory is risk management..and manage the risk so we can see how you do...instead of just spouting off such nonsense. Just go in at the market with no indicators..no vol..nothing and manage say 20 trades with say 14 winners and end up with a handsome profit then and perhaps only then will your gibberish perhaps have some meaning. Or have 5 winners but have a handsome profit.. LOL....oh me! LOL LOL
 
IMO no retail trader has an actual edge over other market participants. All we really need to establish is whether an instrument is more likely to go up or down (overbought/oversold), is there a predominant uptrend or downtrend. You don't want to be trading against professional trading entities. So considering the above, if you agree that you don't actually have an edge over anyone, why bother spending years to seek one out? When you could just try and develop a feel for a market you wish to trade and employ PRM - position correctly & always have your target a multiple of your stop loss (at least three times). Some days/weeks you'll have more winners, other times you'll have way more losing trades, being in control of your own payout schedule vs the loss is key, whether you're right or wrong only this will create an edge over losing traders. I have observed tons of real time calls on ET & other portals - win rate ALWAYS fluctuates, if a target is equal to a stop loss there is no edge, a temporal edge maybe, but nothing that will survive the test of time (especially in short term trading). Peace!
 
JSSPMK said:
IMO no retail trader has an actual edge over other market participants. All we really need to establish is whether an instrument is more likely to go up or down (overbought/oversold), is there a predominant uptrend or downtrend. You don't want to be trading against professional trading entities. So considering the above, if you agree that you don't actually have an edge over anyone, why bother spending years to seek one out? When you could just try and develop a feel for a market you wish to trade and employ PRM - position correctly & always have your target a multiple of your stop loss (at least three times). Some days/weeks you'll have more winners, other times you'll have way more losing trades, being in control of your own payout schedule vs the loss is key, whether you're right or wrong only this will create an edge over losing traders. I have observed tons of real time calls on ET & other portals - win rate ALWAYS fluctuates, if a target is equal to a stop loss there is no edge, a temporal edge maybe, but nothing that will survive the test of time (especially in short term trading). Peace!
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One of the smartest posts i've read here. Just want to add, with a blind entry, it's much harder to tell if you're trading against a professional entity, so there is definitely an advantage to doing some visual and statistical analysis. Some see it as an edge (I sure do), some don't.
 
JSSPMK said:
if you agree that you don't actually have an edge over anyone, why bother spending years to seek one out? When you could just try and develop a feel for a market you wish to trade and employ PRM - position correctly & always have your target a multiple of your stop loss (at least three times). Some days/weeks you'll have more winners, other times you'll have way more losing trades, being in control of your own payout schedule vs the loss is key, whether you're right or wrong only this will create an edge over losing traders. I have observed tons of real time calls on ET & other portals - win rate ALWAYS fluctuates, if a target is equal to a stop loss there is no edge, a temporal edge maybe, but nothing that will survive the test of time (especially in short term trading). Peace!
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CORRECT
 
Buy1Sell2 said:
Edge would be what puts you ahead of other traders. Implementation of PRM is what does that
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Buy1Sell2...You mean "expert" implementation of PRM...correct? It takes more than implementation, it takes "expert" implementation...correct? These are your words!
 
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