Skill Vs. Edge

Edge VS skill

  • An edge can be created through great skill

    Votes: 34 51.5%

  • Edge has nothing to do with skill

    Votes: 32 48.5%
  • Total voters
    66
Many newbies also take for granted the fact that many "edges" are exploited by a professional who knows and can see them when they appear whereas newbies just trade the hell out of their account until nothing is left and then blame the market.

A professional knows if his edge/edges are working or not. If not, he usually keeps reducing size down to practically 0 in order to stay in the game and participate again with size when his edge returns and conditions change.

There's a lot more to profitable trading than chart reading/money management.
 
I have been trading about 10 years.
The first 5 years I acquired and honed my skill.
The second 5 years I created an edge.
Oddly enough, like Mav says, the skill and edge are not related.
I was half-ass successful with just skill,
but creating an edge makes one totally successful the majority of the time.

"Now Purple one," I know your going to ask me to define this edge, so I will give it a shot:
In the first 5 years of my trading, I acquired knowledge and training which honed my skill. I was semi-successful, but I still wasn't where I wanted to be (or needed to be) with my trading.
So during the second 5 years I worked with combining the methodologies of several trading trading systems and extracting only the best out of each system.
Then I created a consensus system of checks and balances,
where the very best of the best systems needed consensus among themselves (but not opposition) to decide on a trade direction for the day.
I am very pleased and content with this "edge" I created
and most importantly, it has been consistently successful.
 
Quote from risktaker:

Many newbies also take for granted the fact that many "edges" are exploited by a professional who knows and can see them when they appear whereas newbies just trade the hell out of their account until nothing is left and then blame the market.

A professional knows if his edge/edges are working or not. If not, he usually keeps reducing size down to practically 0 in order to stay in the game and participate again with size when his edge returns and conditions change.

There's a lot more to profitable trading than chart reading/money management.
More...

You just gave two very good examples of money/risk management. A newbie with poor management and a proffessional with great management. Thank you for demonstrating how different levels of skill yield different results in profitability.
 
My edge is knowing there is no more risk in trading a .22 stock from a 22.00 stock. None! Zero! All are manipulated from time to time. So what! I can provide my own leverage without having to trade on margin, or use someone else's money. Easy money in the .ob market for those that can get past their own ego.
 
Trading "skill" probably accounts for 20-30% of a trader's ability to produce profits (in my opinion) which is what Mav is probably alluding to.

But this "skill" alone will likely not be enough to make the trader profitable. (This is the mistake most newbies make).

In most cases, some type of "edge" (besides chart-reading "skill") needs to enter the equation in order to make some big/consistent profits.


Quote from Purple Barney:

I ABSOLUTELY agree. I never said there were no other edges. However, the preface of the question was, Mav believes skills CANNOT be an edge, because it can be learned. That is the purpose of this poll.
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Quote from Purple Barney:

You just gave two very good examples of money/risk management. A newbie with poor management and a proffessional with great management. Thank you for demonstrating how different levels of skill yield different results in profitability.
More...
Was any such thing "demonstrated?" Go back and read: "There's a lot more to profitable trading than chart reading/money management."
 
Quote from jeffalvinson:

I have been trading about 10 years.
The first 5 years I acquired and honed my skill.
The second 5 years I created an edge.
Oddly enough, like Mav says, the skill and edge are not related.
I was half-ass successful with just skill,
but creating an edge makes one totally successful the majority of the time.

"Now Purple one," I know your going to ask me to define this edge, so I will give it a shot:
In the first 5 years of my trading, I acquired knowledge and training which honed my skill. I was semi-successful, but I still wasn't where I wanted to be (or needed to be) with my trading.
So during the second 5 years I worked with combining the methodologies of several trading trading systems and extracting only the best out of each system.
Then I created a consensus system of checks and balances,
where the very best of the best systems needed consensus among themselves (but not opposition) to decide on a trade direction for the day.
I am very pleased and content with this "edge" I created
and most importantly, it has been consistently successful.
More...


We have different definitions of "skill". Constructing a system or methodology, and mastering it according to your own tendencies, is in itself a skill.

I believe that EVERY system or method works, but for different people with different tendencies. I don't think you actually took the "best" part of each system, you took the part of each system that fit your style the most, and construted a new system that is tailor made for your style. This is what everyone needs to do, instead of trying to immitate another successful traders, they should try to create their own best fit. Because often what works for one trader fails for another, because our minds all work differently.
 
Quote from Hydroblunt:

You simply have not experienced a true edge, while Mav has seen it first hand.

SOES bandits, Bullets, easy NY Open Book steppers, ECN arbs, regional exchnages arbs, Millenium/NYFIX are just some examples of edges that required minimal, if any, skill. Tapereading required a significant amount of skill but it was still an edge.

Mav speaks of an edge from a standpoint of a very exploitable market innefficiency, a gimmick of sorts. Skill has little to do with that.
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these are true edges....like the MM's have in the otcbb world, where they need not reflect ur true size or order in many cases....skill comes into play by maximizing these edges to their fullest potential...you can have 2 traders using the same edge and one may lose or not make as much as the other..thats where skill comes into play....then of course you have the BUY THE DIP traders that dont need an edge or skill and will make a ton of cashhhhh...yeah baby 100% room to go...


p.s. then you have the ultimate edge...inside info and even then some people can f**k that up :D
 
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