Real Edge is rarely shared

It's there. Right in front of our faces. All sorts of inefficiencies and tradable patterns. Execution is key though. None of these advantages manifest profits unless all the prerequisite boxes are checked.

Even though I've been at this since i caught the fever at 25, i never knew what it was like to have a fallback that is risk-free and applicable to trending and choppy markets. I can see how trading can become boring when it becomes and atm that you need to focus on every waking moment. The biggest temptation now becones finding other ways to make money while your bread and butter is churning.

Aside from sports, there's no where else merit and compensation are as highly correlated as trading. That's what makes this so pure. The HFT guys are pushing it with the front-running though. The universe is a perfect system so they will reap their rewards. Who knows perhaps human discretionary traders are SUPPOSED to become extinct. I just hope they can keep all these balls in the air another few years...
 
Last edited:
BrandNewTrader said:
It's there. Right in front of our faces. All sorts of inefficiencies and tradable patterns. Execution is key though. None of these advantages manifest profits unless all the prerequisite boxes and checked.
More...

Execution is just one aspect. You need to optimize all of these basic, yet important aspects. There is no one key.

You got a long long way to go.
 
Pension_Admin said:
Execution is just one aspect. You need to optimize all of these basic, yet important aspects. There is no one key.

You got a long long way to go.
More...
Well, that's what i meant by pre-requisite boxes being checked. As in, all your shit needs to be on point. We all know the books, what boxes need to be checked, read all the same stories.

A long way to go is right. I plan to trade another 10 years.
 
"Edge" changes year to year, in beginning you think it is a system or pattern you have discovered only to find out it is a chapter in some book, but it is new to you and you are making money. Years goes by "edge' changes every couple of years till you come to a point where it is just accepting what you can do and being honest with yourself of what you can't do. And all the price structures or patterns are just part of rules for your trading plan. After 38 years "edge" is a funny thing to reflect on and all you guys this is it something magical. Closest thing I see as important for trading is "Time" whether how long duration left in options, when to dump long option and keep short, how long to stay with day trade, all these "time" related often is parts of money management techniques.

There are segments of trading that many don't talk about where huge money is there once you learn how to trade them like Commodity spreading, huge money has always been taken and margins much lower than outright, most those who were in pits did spreading, and yet there are limited books on them. It is not simple getting in on this date and out on another date, spreaders have done much research on trading them, you can develop systems to trade them, I have and very consistent and you can hedge them.

"Bones" is probably one of the best spreaders around.

Internet makes trading far harder to figure out what you should study, information overload.
 
Handle123 said:
"Edge" changes year to year, in beginning you think it is a system or pattern you have discovered only to find out it is a chapter in some book, but it is new to you and you are making money. Years goes by "edge' changes every couple of years till you come to a point where it is just accepting what you can do and being honest with yourself of what you can't do. And all the price structures or patterns are just part of rules for your trading plan. After 38 years "edge" is a funny thing to reflect on and all you guys this is it something magical. Closest thing I see as important for trading is "Time" whether how long duration left in options, when to dump long option and keep short, how long to stay with day trade, all these "time" related often is parts of money management techniques.

There are segments of trading that many don't talk about where huge money is there once you learn how to trade them like Commodity spreading, huge money has always been taken and margins much lower than outright, most those who were in pits did spreading, and yet there are limited books on them. It is not simple getting in on this date and out on another date, spreaders have done much research on trading them, you can develop systems to trade them, I have and very consistent and you can hedge them.

"Bones" is probably one of the best spreaders around.

Internet makes trading far harder to figure out what you should study, information overload.
More...
its quite simple - you're talking about making money here .... Nobody is going to show you how to make money. Why would they? Do you really think its going to be printed in a trading book or sold as a piece of software or better yet sold as an educational program by a so called professional trader ?

I believe one can learn a lot of useful information about trading and investing from some of the sources I mentioned above however, I don't believe it will be anything of real value that you can go out and execute with and expect to make money with. It will lessen some of the green time needed to understand the basics but that's about it.

Having traded for several firms throughout the years, I can personally tell you that there is absolutely "NO" hand holding and this is not a team sport you only eat what you kill and you live and die by your P&L. It's a very tough business at these professional firms and most people don't make it.

Best Wishes 322170
 
322170 said:
its quite simple - you're talking about making money here .... Nobody is going to show you how to make money. Why would they? Do you really think its going to be printed in a trading book or sold as a piece of software or better yet sold as an educational program by a so called professional trader ?

I believe one can learn a lot of useful information about trading and investing from some of the sources I mentioned above however, I don't believe it will be anything of real value that you can go out and execute with and expect to make money with. It will lessen some of the green time needed to understand the basics but that's about it.

Having traded for several firms throughout the years, I can personally tell you that there is absolutely "NO" hand holding and this is not a team sport you only eat what you kill and you live and die by your P&L. It's a very tough business at these professional firms and most people don't make it.

Best Wishes 322170
More...

What I always found at professional firms, those who you might think are your friends want you not to succeed. LOL You still have to put your big boy pants on and take what some will show how they trade and back test till you blue in the face, you have to want it more than next guy, my knowledge simple not going to travel to who wants to learn. Just like I might see new pattern I have not noticed before, but until I have done like 3,000 sample size to see if it works-not going to happen. I have been very fortunate through the years from my trading and in few of years, I won't be day trading any more, automation where it at and I prefer long term commodities where the big money. <<Nobody is going to show you how to make money. Why would they? >> Why would they not? If you have everything you need, why would you not want to help out a few of those who are struggling? We all have different agendas.

Have a Super 2016
 
You need an edge, its a reality if you want to trade. Sharing it with others or teaching it so that money keeps coming to you in the form of tuition fee is a different option.
 
People keep throwing the word edge around. I never quite understood what it means and no one wants to give an example because they don't want to give away their edge.

How about this...can someone give an example of an edge that you made money with that is no longer a viable edge? I only ask this because I'm curious and want to learn how profitable traders define the word edge. Also, don't bother responding if you don't trade or haven't made a dime in trading. I'm sick and tired of vague riddles and definitions thrown around on ET by people who clearly just lurk and have no skin in the game.
 
Daxtrader said:
People keep throwing the word edge around. I never quite understood what it means and no one wants to give an example because they don't want to give away their edge.

How about this...can someone give an example of an edge that you made money with that is no longer a viable edge? I only ask this because I'm curious and want to learn how profitable traders define the word edge. Also, don't bother responding if you don't trade or haven't made a dime in trading. I'm sick and tired of vague riddles and definitions thrown around on ET by people who clearly just lurk and have no skin in the game.
More...
I have a generic example for you. Back in the late 90s and early 00s a few index arb desks on the street used to "front run" the stocks that were being added to the various indexes. It wasn't illegal at all. So when they got wind of stocks about to be added to the index they would load up and bid the sticks up about 5 to 10%. Then sell them to the index funds that had to buy them. This index demand averaged about 10% of float, so it was a big deal. Eventually, other desks figured out the game and edge got arbed out. Now, the sticks get bid up waaay before being added to the index and everyone is hip to the game so when a stock even SMELLS like an index entry candidate it gets priced in. Now the risk far outweighs the reward and the skim is minimal. Keep in mind index arb is generally for big balance sheets, so this particular edge was limited to big players. Yeah small guys can do it but the small guys arent the ones who are going to arb the edge out of the market. As narrated to me by a former institutional merger/index arb guy.
 
Last edited:
  • Like
Reactions: d08
I can give you another example of edge: 10 years ago I used to sit on bid or ask in about 20 to 30 series in DIA-options (using an optionsmodel I had programmed in excell with direct link to the underlying market; I had my own prices but they almost corresponded to the lead market maker's ones) and delta-hedged while trying to keep my greeks as neutral as possible. I send about 1000 quotes to the market each day, of wich 850 were changes in prices. Spreads were rather wide and cancellation costs non-existant at my broker (IB). I was profitable in about 20 out of 22 trading days making somewhere over 500 usd a day up to 1100 usd on a very good day. If I got a exceptional loss day (big moves in intraday vol for example and my position was too big) it was in the order of 50 usd. That was an edge. Doubt anything likewise could be done today with pennyspreads and/or cancellation costs.
 
You must log in or register to reply here.
Back
Top