Question for those who believe everything is 50/50 always...

[trdes]

No. So here's the truth and I've seen this time and time again. Trader 3 IS ET. These guys can do very well and ironically can go long stretches where they do very well. I liken them to option premium sellers since in many cases they are one and the same. The guys that avg down can actually make very nice size until 2008 or 2011 rolls along. But good lord man, if you had to fade them you could go years losing money waiting for a 2008. Averaging down and refusing to take losses DOES work most of the time. It's not an edge or negative edge, it's just has a definite path to ruin that only time can deliver. Same as with blindly selling options. For sure that will work for long periods of time, in some cases years. But when it doesn't, it's all over.

Yes, especially with a more means reversing market they can do well, until a big move takes them out, via time like you said. That's very logical and makes sense. I've traded with someone who did this and was extremely profitable and managed to stop doing it before being wiped out.

Anyways I truly appreciate your replies and time, that wasn't the exact type of trader I was trying to portray for my #3 example, some people literally get out at break even after taking on massive risk, while at the same time will often times exit at a huge drawdown for fear of going bust, so they don't even get the advantages of the profits like the trader you were describing.


At any rate I'll give it a rest because you've been more than patient and I can see we're not going to find any middle ground here, and don't want to waste your time. but again thanks for the conversation.

 

[Telepuzik]

"Negative edge" reminds me of a modern cosmology concept of "dark energy". It has to have properties of antigravity but we still do not know what is exactly gravity in the first place. But ask any cosmology expert and he would gladly talk about dark energy this and dark energy that.

 

[trdes]

"Negative edge" reminds me of a modern cosmology concept of "dark energy". It has to have properties of antigravity but we still do not know what is exactly gravity in the first place. But ask any cosmology expert and he would gladly talk about dark energy this and dark energy that.

lol, well I think we're getting stuck on the term. But we know clearly know some people have an edge and according to a lot of people on here if no edge than it's a 50/50, but how is it possible or even probable that there aren't people out there that have such a bad mental state, bad habit or other factor that is limiting their ability compared to even an average trader.

I just don't get how that's even debatable. Call it whatever name you want, but to assume you only have two options either A) an edge or B) 50/50, I must be really stupid but I still don't get it lol.


Whatever going to bed

 

[Telepuzik]

The only edge there is are exceptional risk management, as low comissions as possible, midspread entries and exits. That is it whether you believe it or not.

Some people assert that the direction is always a 50/50 chance, completely random.
Some assert that it's pretty close to 50/50, but the "edge" is what lets you get a positive expectancy.

Under that assumption, if a trader has a system that commits many trades (so as to rule variance out), shouldn't he not be able to lose money faster than the bleedout of commissions? If people can lose money faster than loss from commissions, and its not due to variance, it should hold that the person can at least go the other way as well.

 

[trdes]

The only edge there is are exceptional risk management, as low comissions as possible, midspread entries and exits. That is it whether you believe it or not.

What? You're saying the only edge is risk management? and the other things you listed? There's no edge to be gained by using indicators? or understanding what pattern the markets are currently in via price action?

 

[lawrence-lugar]

The only edge there is are exceptional risk management, as low comissions as possible, midspread entries and exits.
That is it whether you believe it or not.

Good risk management: check,
Low commissions: check,
Spread on entries and exits: check,

Those are all good trading characteristics to potentially steer you to success.-- But those are not necessarily considered 'Edges'
An edge is something that a trader see's as a potential hole or opportunity, and can execute it very well...compared to the next guy who is rather just somewhat gambling by comparison. or doesn't see what's in front of him.

What you mentioned are simply things to keep your head afloat -- but an edge, or true edge, can really propel you to another level.
But 'edges' are not mass produced things, it's kind of like the Excalibur sword...it takes the right person to wield it.

 

[Telepuzik]

Well, considered or not - these are enough to be consistently profitable. Moreover, I haven't heard profitable traders use word "edge" but it is often I mentioned by beginners or those without consistency. I do not believe in a concept of "edge" in trading. Beautiful word concept created to explain why most aren't good enough and are losing money. Just my opinion. Trading is very straightforward. It does not need any vague concepts to explain itself. The key to success has always been exceptional risk management. But it is boring for most. Most prefer to search for the edge/holy grail/the Indicator. It is just so much more imaginative. Everyone goes through this. Few overcome this. It is like a thick fog you drive through for ages. Most get lost, run out of gas, crash, turn back etc. This is how I see it.

 

[pinabetal]

Of course there are edges. Casinos wouldn't be in business if there weren't. When it comes to edges in trading the biggest edge one can develop is the ability to recognize what the institutions (smart money...deep pockets...banks...ad naseum) are doing and determine who is winning..bulls or bears...and place orders accordingly.

 

[Telepuzik]

I will stop myself here. This already feels like a recursion. If you absolutely need an edge in order to be profitable - well, continue your quest for it. Hope you will find it whatever that is. As for me - I have to look into my trading horoscope for December 2016 now and just after that I'm off to my personal palm reader lady for a weekly trading consultation.

 

[pinabetal]

I will stop myself here. This already feels like a recursion. If you absolutely need an edge in order to be profitable - well, continue your quest for it. Hope you will find it whatever that is. As for me - I have to look into my trading horoscope for December 2016 now and just after that I'm off to my personal palm reader lady for a weekly trading consultation.

LOL Almost everything you mentioned as necessary ARE in themselves edges. Having an edge simply means to have an advantage. Two traders. One who can effectively implement risk management. One who can't. The former has a skill the latter doesn't. That skill gives him an edge...an advantage...over the latter.

A trader who can read what the institutions are doing as they leave their footprints in the market has an edge over the trader who can't. Even over other institutions that can't. Hft are a dime a dozen. They run with their edge until it no longer works and they will create a new algo that does work for a while. Some fail and go out of business. Edges can be fleeting and sporadic. But to say there are no edges..well that is plain wrong. The ability to read PA is an enduring edge (at least for the present but technology could change that) Likewise risk management...trade management....etc. These skills will give advantages (aka as edges) for years to come. The horoscope and palmreading is nonsense.